The #1 Key to Real Estate Business Growth with Douglas Skipworth

Taylor   0:02  

This is the passive wealth strategies for busy professionals podcast. Thank you for tuning in. Today, our guest is Douglas Skipworth. Douglas is a super successful real estate investor. He tells us more about his experience. But let's be, I'll give you a little hint. He rounds the number of units that he owns, between him and his one business partner to the nearest hundred. He rounds his units to the nearest hundred, because he owns so many and manages many others.  he also has a virtual assistant Company and today we're talking about the value of people in your business, how to find the right people, how to vet them, how to get them up to speed and get them involved in your real estate portfolio to grow your portfolio faster, without without using more of your time. This is a very, very important podcast and critical lessons that we all need to know. 

The most successful investors that I know Follow all of These lessons no matter how active or passive they are in their real estate business, they focus on the people and getting the right people in place.  having those people work in the business while they themselves work on the business. Thank you for tuning in. Once again, I'm your host Taylor. I'm a real estate investor real estate syndicator, meaning I buy real estate with passive investors and split the return. Happy to be bringing this topic to you today. Here we go with Douglas Skipworth. Douglas, thank you for joining us today.

Douglas Skipworth  1:32  

Man. I'm glad to be here. Taylor. Thanks for having me.

Taylor   1:34  

Happy to be talking with you on a Saturday. I don't know if you'd call it evening. But burning the weekend oil. definitely appreciate that about you. Before we get into the topic, can you tell our listeners a bit about you and your background and your investments?

Douglas Skipworth  1:50  

Yeah, sure. I'm here in Memphis, Tennessee. I've got a business partner. Well, I say that we really started individually as investors And then kind of came together with that one plus one equals three, we're really big on relationships but we were both single family rental house investors while we had w two jobs, looking to use real estate assets, rental properties primarily to kind of build a business and so that was what we thought would be kind of what that investment would lead to. 

he had a manufacturing background I had a investing finance background and we thought we'd buy a manufacturing company or distribution center or something someday and ended up helping people do real estate, buy houses, manage houses maintain houses so So fast forward from a get a couple guys who were buying rental houses to kind of create financial freedom or wealth for themselves to now that is our, our job we my partner, not own several hundred houses in multifamily. probably Eight 900 units, ourselves and then we manage another 2000 for probably 750 or thousand investors all across the world who invest in the greater West Tennessee area, kind of primarily Memphis in the surrounding area, and then have the maintenance company in the brokerage to kind of help do that. So, we're full fledged investors by day but started as really passive kinds of on the nights and weekends kind of investing.  That's who we cater to now. Our client is mom and pops individual investors, folks who are looking for financial freedom, folks who are building wealth, things who are looking for passive income, so a little bit about us.

Taylor   3:42  

I love that I love that you. You have so many units of your own, that we won't even bother. we're rounding with the exact number we're going around the nearest hundred. I love that. Yeah, that's a unit. I'm sure it's constantly in flux. Yeah,

Douglas Skipworth  4:00  

that's right. We bought some cells. it did changes and just depends but

Taylor   4:06  

nice. That's fun. Love it. you have this business partner relationship and it's gotten you to where you are today. How important would you say relationships have been in your real estate investments?

Douglas Skipworth  4:20  

Oh, man, that's a great question. Because when I first started, I was kind of on my own.  Actually my business partner and I met through jogging exercise, then moved in the same neighborhood, got introduced to one another, and kind of built up a relationship through jogging, and part of what was great about that was accountability. We jog early in the morning, and so it's I know somebody is going to be out there waiting for me. when the alarm goes off, I gotta get up and put my shoes on. 

So for real estate investing, it's kind of similar To have the a the accountability of, Hey, I'm going to do a deal.  We come across a lot of people who learn and educate themselves and never do a deal. They read all the books, they take all the classes, they watch all the podcasts, listen to other podcasts, they're part of all the real estate meetups, the local RIAs conferences, whatever, but they never end up pulling the trigger into part of it for us. One of the big things for me is having that accountability of someone in the relationship so that's probably first and foremost, the accountability partner aspect of it.  then two is just the synergies from relationships, again, that one plus one equals three.

Whether it's having a business partner, whether it's leveraging yourself through employees or through vendors, suppliers, contractors, virtualizing, assistants, you just any type of relationship, I think brings Brings leverage. for us, that's, that's great.

Douglas Skipworth  6:06  

As well as as well as opportunity. I think that that becomes the short answer.

Taylor   6:12  

I love that and You're so right. I mean, I don't love the reality that there are a lot of people who spend time at the meetups and invest in programs and everything.  some of these programs are 10s of thousands of dollars and then they never take action and you bring up a great point that having another party there for accountability can help drive us further. In addition to actually knowing your business partner and people that you're partners with, about relationships with employees and service providers and people that you're paying. It's not quite the same as a business partner relationship. How do those factors affect your business?

Douglas Skipworth  6:57  

Yeah, I mean, I think that's key and just everybody If I mentioned leverage, we're I don't know if you've ever been exposed to a guy named Dan Sullivan with the Strategic Coach. It's a program it's awesome you check it out Dan Sullivan Strategic Coach, he puts out all kinds of podcasts, materials, books. 

he's got a concept and there's a great little book it's free download on his website, Strategic Coach comm I don't know what the what the link is to the book, but it's called who not how in and it's the whole concept of so many of us and so much of our life, we're trying to figure out how to do something.  That's okay if you're playing in your strength area, but like most of us are good at a few things.  we're bad at a lot of things. But we've been taught or trained or think we need to figure out how to be good at those things we're bad at and so the concept of the book is just who not how so don't don't spend your time figuring out How to do it, figure out who can do it. 

that's what that's where employees and vendors and contractors and suppliers and partners, advisors come in strategic partners where they're that they're the who you know. don't figure out what you want, you got to set your goal, you got to have a vision. But instead of spending all your time figuring out how you're going to do it, figure out who can help you do it, who can do it for you, if it's not against your strength area. For us, that's what we've tried to leverage employees and vendors figuring out what we're good at.  then what, what, where they're better at than we are.

Taylor   8:40  

You know, that that's such a great point.  I love that way of putting that I don't know if I've ever heard that before, but who knows how that's brilliant, and I'm gonna write that one down. think about that.

Douglas Skipworth  8:54  

Read, read the book. The great part about the book is it's 50 he writes a book a quarter in there. 50 there 48 pages. they're super quick reads. But they're in there because it's just one concept. It's just who not how it is, I think I'll send you a PDF and you can put it in show notes or something, or link to it. Awesome. I'll do that. I'll put that together.

Taylor   9:15  

Fantastic.

Douglas Skipworth  9:16  

Good stuff. It's super great, it's a good resource. Quickly, less than an hour. Yeah, awesome. Yes, it's me. But that's that. I mean, that's the whole that's the whole concept of relationships. It's the who not how and so, otherwise, you're just a one man, man, man show I am. I'm gonna butcher this, but I think it was Adam Smith, Adam Smith in the Wealth of Nations. I mean, I think this is what Stephen King would say. But he published that like 1776, I think that was almost 250 years ago. 

I think he really was one of the first ones to talk about, he was talking more about specialization and exchange and economics of like if you're one person and you're trying to do everything about yourself you might produce one but if you have I think this was like a factory making something then it's like they split up all the jobs and one person would did this in one person did that.  Then one person did the third thing and they output the three of them.

Individually, they would have produced three, but together working as a team with individual jobs, specialized jobs, they produce, like 10 X so I think that's the, that's the concept of, hey, figure out who does what well and let them do that.  then you go play in your strength area.  just keep those relationships going and kind of meet the mutually beneficial relationship. So

Taylor   10:38  

nice. I like that.  I have a question that maybe breaks the rule of this. Who not how, but let's turn who not how on its head. How do you find who ? Haha, what are the strategies that you use to find the right person?

Douglas Skipworth  10:55  

man that's so funny because one of the concepts in that little book is there. Are people who are who finders is a term he uses of just, uh, you know that whether it's recruiters or whether it's just people who are well connected, or you, you just, oh, you need to meet so and so or this person you're looking for that let's connect. But I think we have found Yes, there there are different ways whether it's kind of hitting your network for you get an idea, there are certain things that you have to do, right, you have to as far as how, like, you have to have the vision, you have to set the goal, you you kind of have to be the CEO of your life that people aren't aren't going to kind of really tell you what to do. Or at least we've got that luxury in our day and age to be the CEOs of our life to kind of chart our own paths. you got to figure that out and then they're little things along the way, you got to figure out like what kind of person am I looking for Who am I looking for you In. 

Then there are different ways to do that whether you use recruiters, whether you use your network, whether you use a lot of, we clearly define what we want, then we do like a personality work style, we use the thing called culture index. It's like Colby or Myers Briggs or disc or any of those little inia grams any kind of personality assessment of how people's what's their motivation? What's their work style, to kind of figure out if the person meets the role kind of here, define what we're looking for in a role, then we go out and assess if that person has those capabilities.  then we kind of follow that Warren Buffett's got a great integrity, intelligence and energy. we kind of look for those three things with people.

do they have the integrity to match up with our core values? And then do they have the intellect to kind of have the smarts to do the job and then Last Do they? Are they motivated? Do they have the energy? Do they have the drive? Do they have kind of the fire in the belly? Someone you kind of put those together with the personality assessment and kind of division, you figure out how to find those, those folks referrals, referrals from you know, you network.

Taylor   13:21  

So it sounds to me that if you're using that integrity, intellect values rubric, the first one integrity that's probably the hardest one to really assess. I mean, the intellect you can there test for that right and values, maybe a little easier to assess the integrity at least up front. Is that is that a core value that you use when finding who and how do you evaluate that and you mentioned these various tests. Do they do a good job of that? What's your strategy?

Douglas Skipworth  13:56  

Yeah, it means that you hit the nail on the head. Now.  none of this stuff is foolproof. It is it that the hardest has been to test sometimes for character and the kind of the fire in the belly. That's my passion.  Obviously, for us, it's always best when we can promote from within or give somebody more work. We do a lot of what, especially with outside partners, we do a lot of what we call small experiments. do one deal with somebody give them one opportunity and if they prove themselves, give them another kind of up it. 

same with internal if you if somebody you know proves themselves strong in one, one job or task then give them more so that's that's probably the best way to actually have that personal first hand experience on a small scale and then multiply it out. Is it you know that that is in our question? That's the best way to do it. For sure. We've definitely made a lot of mistakes in the past in everything we've done so So, but definitely on people and people decisions personnel and hiring, and even promoting and put putting, putting the wrong people in spots but one of the things that we've done wrong and learned from is when we start have started new things and putting an unproven person in a new thing.

That that has been maybe a reckless decision for us, whereas it kind of in the future and it's kind of a redone it in putting since our past experiences we've gone back to New putting new putting proven people and new things and new people and proven things, if that makes sense. it's just it's just a slightly nuanced you put new people improving things and you put proven people in new things.

Taylor   16:05  

100% Yeah, that that makes sense. Yeah, perfect sense. I totally, I think I understand what you're driving at.  one of the biggest things that I wanted to touch on with you today is that virtual assistants are what everybody's talking about, really, when you're talking about scaling a real estate business, and especially assessing things like integrity, intellect and values. I mean, it's basically, I haven't found any way to do that.  to really assess them up front. What do you do to try to make sure they're a fit? I mean, are you using virtual assistants in your business? And how are you controlling for that? I mean, at the end of the day, truth will out like you're going to figure these things out, but you don't want to waste all of this time. You mentioned these small tasks with outside partners. Does that mean virtual assistants? I mean, what's your process for for getting one on bored and yeah, speed,

Douglas Skipworth  17:02  

man, awesome question and I hadn't talked totally about this and I absolutely don't want this to be a commercial. So, we started using virtual assistants probably six or seven, six or seven years ago, just for an in it was a what they call business process outsourcing BPO.  so we had some accounting function in our property management company for invoicing and we would send invoices overnight to a team in India and they would process the invoices and while we were while we were sleeping, we come in they were processed, and they would do that for about half the price we would pay somebody in the states and about twice as good. you know, half the price is twice as nice that half the price kind of so that was great for us.  but it was really nameless, faceless. We did. We had one contact, but they just kind of sent it. They were a salesperson, and administrator.  that worked really well for us.

But we got to the point where we were like, man, we wish we could customize this a little bit more. We wish we had a little more control over the virtual assistants. We wish they weren't nameless and faceless, faceless.  so we went to through a middleman we found a virtual assistant placement company, and they helped us find some virtual assistants where we could kind of in quotes employee, they're their contractors, they're like 1099 independent contractors, but they're in remote country either in the States or out of out of the country.  they're working remotely. which as you know, in this day and age is great. they helped us develop.

Now we had a real person, and we had Google Chat or Microsoft Teams and different things where we could connect with these people by Skype or zoom in and work with them day in, day out face to face.  that went through a middleman company.  that's been great.  we boarded those people like we would, they just became, instead of VA as virtual assistants, we started calling them remote team members, because that's all they were, they were just like a team member, but they were remote.  now they're no different than our team members who are local who are remote. We just had local and remote team members. Now everybody has remote team members, even if they're local, over time, this is what we get funny over time. As we've had we've tended to do in the past. We ended up as our businesses continued to grow.

We just said man, we need to go direct to the, the virtual assistants themselves and so for ourselves, so long story short, we ended up creating our own virtual assistant company to help place our own virtual assistants just because we had so many that were helping us in our real estate brokerage, our property management company or maintenance company.  as this exact same thing that happened when my partner and I were buying our rental houses, somebody said, Hey, can you help us buy a rental house? Hey, can you help us manage a rental house? Hey, can you help us maintain this property? And we did.  so we got a lot of interest from our entrepreneurial friends, our peers who were doing real estate in other cities, our peers and in Memphis and asked us, Hey, could y'all help us recruit a virtual assistant? Could you help us place a virtual assistant? Could you help us train a virtual assistant? So long story short, we ended up creating a virtual assistant company that we got a guy on staff who runs in places virtual assistance for people and that has been great.

We are our biggest client So we drink Kool Aid, but we also help others. that's, that's we believe in it.  and I think we're recording this episode in the year 2028 during this COVID-19 crisis, and as you know, remote work has become very valuable. I think it's just helped all of us. It's helped our business a lot by having already been in a remote workforce or having a significant portion who are already remote.  then that's become obviously more widespread than we accepted. So

Taylor   21:33  

absolutely, I think, as far as you know, corporate america and everything goes, having this experience of your employees being remote. I mean, it's gonna be a skill and a business process.  I prefer to think about it as a skill but there are many kinds of older companies that haven't adapted and now they're going to be underperforming any of their competitors who weren't ready and there are many companies That we're ready and have been implementing these things over time.  really Now is the time for them to shine.

But regarding starting a VA company, I mean, I think that that shows that you're clearly doing this VA thing at a higher level than most people and with more skill.  if you're bringing in vas, I mean, you're and placing them in other jobs with other people. You're having the even harder vetting problem than I think your VA, your third party VA end users are. you know, tell me a couple things that you're doing to like, vet all those v A's and

Douglas Skipworth  22:43  

yeah, let them play man.  I remember how I was like, Oh, I don't I kind of maybe even missed part of your original question. I think it's fine. I asked like six questions in a row.

Douglas Skipworth  22:53  

Yeah, part of the original question, what you know, what's kind of like, how do you find and train and train these folks and so on. What I was going to say, for the end users out there who are looking for virtual assistants, that's what we did.  the kind of service we provide to our clients now is we help them do that. We had somebody who helped us. Originally, they were the recruiter, they were the placement agency, and they had trained virtual assistants.  so we've kind of learned we learned from that experience. 

grew out of that when they had a business split and kind of put us in a lurch.  so we can, that's kind of how we decided to do it on our own.  then it grew from there. we do, yes, the two things we do, I guess what I would say is we recruit through all the same means that we talked about with defining roles, doing work style assessments, and looking for those people, but then what we do, rather than just deploys some Today we put them in the organization. Again, we take them, we take somebody new and put them in a proven system.  then when a new role comes open, that's when we take a proven person to the new role. As opposed to putting a new person in a row, we call it a bench. We've got a bench of virtual assistants who are doing either backup work or frontline work.  then they roll into the new open positions. 

then new virtual assistants come in his bench or filler to learn and then they roll out so that nobody gets, you know we try to avoid I don't want to say nobody but we try and avoid a new person, a new virtual assistant getting in a new role. We want to put a proven person in a new role.

Taylor   24:49  

Nice. I love that.  For the folks out there, one of my favorite kinds of sayings that I've picked up and I didn't come up with in any sense being in this world is that Think it's a Tony Robbins thing that success leaves clues. Right? Yeah, we need to talk to the experts about what they do.  Clearly that's you're the expert. that's what you do. That's what we should try to implement. I love it. Right now. We're gonna take a quick break for our sponsor. All right, Douglas. I've got three questions. I asked every guest on the show, as you know, since you've listened to this show, are you ready?

Douglas Skipworth  25:27  

I am ready. Thank you.

Taylor   25:29  

Love it. First question, what is the best investment you've ever made? Other than in your education?

Douglas Skipworth  25:35  

Yeah, it's education first, for sure. Thanks for rolling that out. But I would definitely say that I am. I am a I am a you know, anyway, a big proponent of education formally and lifelong learning. best investment. You know, I'm gonna be very simple and we didn't even really talk about this, but I'm sure I think I've heard you talk about it before the burn method. In my very first real estate investment was a bur method textbook. I bought a rental house on a home equity line of credit that I had. I rehabbed it with it being vacant, I rehabbed it with the line of credit. I was all in with my line of credit on my personal residence. I was more of a do it yourselfer. Because it was here MFS, though, I had contractors and partners help me and then after I got that rented, we got it fixed up, I got it rented, I took it to the bank and got a loan to pay the whole amount and know it was appraised.

You know, at 1.2 x, and so I got a loan for x paid off my line of credit back to zero so I was in my first rental house for zero dollars out of pocket on a 20 year mortgage with the tenant pay in the morning.  that that propelled me to fuse now that you know, that was one small It was a $50,000 house and a $50,000 loan I ended up with $45,000 house 55,000 and rehab. $50,000 house so it's so it's not the most lucrative investment but it started the ball rolling on what became you know where we are today and so I'm so thankful, but, but it was infinite return because I really was with zero out of pocket.  It's been a great performer ever since.

Taylor   27:37  

That's awesome. I love it. That's

Douglas Skipworth  27:39  

so big. Yeah, big proponent of the bur method for people who are doing residential real estate investing.

Taylor   27:46  

Nice. On the other side of that, as you know, we had no best investment. On the other side of that, what is the worst investment you've ever made yet?

Douglas Skipworth  27:55  

What kind of education and when are definitely my kind of I'm gonna roll out as people with Definitely made some really terrible people decisions, who have really hurt us in running businesses, again putting unproven people into unproven you know, new roles. It's just been disastrous for us and we have lost a whole lot of money. This wasn't because we lost money on this deal, but it was probably the first time we really lost money. We bought a house, again, keeping with the rental house name.

We bought a house from a friend who was a wholesaler.  it was a house that had been in a fire.  We bought it for dirt cheap.  Then we had some issues, again, about relationships. We were partnered with the wrong contractors, and they did all the work on the house. But they didn't get all the right permits for the firehouse as we called it, just a rental house that had a fire.  so the code inspectors came in and you know, made us redo Absolutely. Everything with a new contractor who was their buddy, so to speak.  so it was twice as much. we were in, in the house for well over four times what we thought we were supposed to be in the house or so. 

That was one of our first one deals together that my partner and I did and it was it was tough when again, in the grand scheme of things I would gladly lose that money versus the money I've lost and other things. But it was a valuable lesson that we're still learning. We're still learning today of picking the right partners and betting on vetting your investments properly on the front end, with all the risk. We didn't have that risk mitigation on that that we thought we did.

Taylor   29:48  

Well, fortunately, we are here learning this lesson so that we don't have to learn it the hard way like you did, man. Speaking of lessons, my favorite question at the end of the show is what is The most important lesson that you've learned in business and investing.

Douglas Skipworth  30:04  

Yeah, when I think of passive real estate investing one of the things that I think is the best piece of advice is the quick answer is Warren Buffett Hey, rule number one don't lose money you know two rules of investing. Rule number one, don't lose money. Rule number two, never forget rule number one. Now I love buffets.

I Love Buffet and I love that I love that but, but really, when I think about it, one thing that I that I have learned that I did not understand is that pat and I think I learned this from Gary Keller as far as formulate in a book somewhere, Keller Williams, but passive and passive investing is not what passive what we think of is just is sit back and do nothing investment investing, is he he has a concept where you know, we hear from other people worked in the business or on the business, be active or passive.

In a think so the concept here as if you're talking about working in the business that means I work in the business capital I and I and I work in the business where passive and that's being very active and passive means you're working on the business and others oh you know oh and on others are working on the business for you but it means you you again can like we talked earlier you got to be the vision you got to be the accountability you have to know where you want to go with the goals and partner with the right people but there's a there's an active nature to that passive investment. But if the activity that I'm doing looks different, the other people are doing the work but I'm doing the accountability and vision function.

That was a good lesson. It's not a set and forget it kind of investment. I love you whether it's marketable securities or real estate, I mean, you got to manage. As the manager or you know, keep some kind of dibs on the manager. So

Taylor   32:04  

yeah, passive investing is not doing nothing , I think. There you go. I love that you said that I'm gonna remember that one as well. Douglas, thank you for joining us today sharing all these lessons about getting the right people in our business and super valuable information for anybody out there who wants to grow a real estate portfolio of any type. It's all about the people that folks want to learn more about. You get in touch and your VA business and all that. Where can they find you?

Douglas Skipworth  32:34  

Yeah, come see me on LinkedIn that I mean, just me directly. That'd be easy.  then I can connect wherever. Yeah, where I'm at on bigger pockets to the real estate social network. But just Douglas Kip worth, she can you know, catch me there? shoot me an email private message me and

Douglas Skipworth  32:52  

I'll say we'll go wherever we can help. However we connect, connect. Let's do it.

Taylor   32:56  

Awesome. Awesome. Well, thank you for joining us today. Once again. I really enjoyed You taking some time here on a Saturday to record this interview with me definitely much. Appreciate it to everybody out there. Thank you for tuning in. If you're enjoying the show, please leave us a rating and review on Apple podcasts. It helps other people learn about the show, you know anyone who could use a little bit more passive wealth in their lives, please share the show with them and bring them into the tribe. Thanks for tuning in. Once again, I hope you have a great rest of your day and a great week and we'll talk to you on the next episode. Bye bye