Pat Flynn: What’s up, everybody? It is Pints with Pat. We are Friday, May 14th. And what we’re doing today is something we have not done in a really long time. Had someone else on, so it’s not just my ramblings today. We got the awesome Sarah Rocco with us today of The Rocco Group and welcome, Sarah.
Sarah Rocco: Thank you. Nice to be here.
Pat Flynn: Yeah, thanks for making the trip out here. So we were just talking before we started recording that Sarah was on the show in January of 2019. She was my first podcast guest ever, which is crazy. So we had both listened to the… Sarah did, also, I figured she you would, but the old podcast before starting this one, and some of her goals and her numbers; will be fun to look over today.
Sarah Rocco: Yeah, that’s right.
Pat Flynn: Really interesting, so…
Sarah Rocco: Not like the first one back again.
[chuckle]
Pat Flynn: One thing I wanted before we get into it is in 2019, we were on that show, you were getting into the social media video pieces of it, too. There’s that… What’s that Asian you like and follow in New York City, Manhattan?
Sarah Rocco: Oh, Ryan Serhant?
Pat Flynn: Ryan Serhant, yeah, and you were showing… You showed me the video of him, like the day-to-day life of him, and which is really cool, people like watching that stuff. From YellowBird perspective, we got into that stuff hard in 2019. And I talk about this a lot, it just wasn’t… It wasn’t me. I could do it, but I didn’t enjoy it. I almost saw people like Ryan and people like Gary Vaynerchuk and tried to intimidate, or not intimidate, but…
Sarah Rocco: Emulate, yeah.
Pat Flynn: Emulate them and just do what they did, and it just, it was not genuine…
Sarah Rocco: It was draining.
Pat Flynn: And fucking draining, draining. ‘Cause I’m a quieter person, I don’t really like doing that stuff. And it was a good failure ’cause it made me realize who I was and now, I’m in my zone of like…
Sarah Rocco: You’re in your lane, yeah.
Pat Flynn: Going live for six to seven minutes every Friday and drinking a couple beers and talking about my woes at YellowBird. It’s just way better.
Sarah Rocco: Right. Love it.
Pat Flynn: So I’m curious, your journey with… I don’t know if it’s going… I don’t see as much from you.
Sarah Rocco: Right.
Pat Flynn: But how did it go? Did you have a similar…
Sarah Rocco: It’s exhausting to always be on and have your life in front of everyone. And I, for a while there, I just wanted to completely remove myself from social media, but I’m not really able to. And I could, in some capacity, if I had the right people. I don’t enjoy it that much.
Pat Flynn: Yeah.
Sarah Rocco: But I love the idea of it. But it’s an all-day, every day, always-on type of thing, and it’s just not what I’m focused on.
Pat Flynn: Right, that’s exactly what I thought.
Sarah Rocco: It can be all-consuming, and it wasn’t… I need someone to either run that part of it. I know I can’t have the ideas. It’s exhausting.
Pat Flynn: Yep. Absolutely exhausting is a good way to put it.
Sarah Rocco: Yeah, yeah.
Pat Flynn: It’s like every time they wanted me to do a podcast or a video, I’d have 30 phone calls to make, and it’d just be like, “Oh, and also, get on camera and talk about this,” or, “Do you have any ideas of what to do today for this segment?”
Sarah Rocco: See, I just want someone somebody to tell me, “Be here, do this, wear this, and show up,” and I’ll be there and I’ll do all that, and then I’m fine with it. But if I have to be the creative and the visionary on that, I just can’t, it’s exhausting.
Pat Flynn: It’s too much. Yup, I found the same thing.
Sarah Rocco: Eventually, though, I think we’ll end up becoming that again.
Pat Flynn: You were mentioning, and I guess we’ll get to this in a little bit. Can you give… We have a few people watching, we have 10 people watching, just an idea of what’s going on with The Rocco Group now at a high level, volume-wise, people-wise.
Sarah Rocco: Yeah so, yeah, we chatted about this a little bit earlier. We, in 2019, we were all over the place. We were expanding, thinking we were bigger than we were. [chuckle] And then scaled back and really focused on our one thing, and that’s Jacksonville, being one of the top teams here. So we’re growing pretty rapidly. We have a team of 17. We have three virtual assistants in the Philippines.
Pat Flynn: It’s huge.
Sarah Rocco: We have eight full-time administrative staff, eight agents with myself, and a full-time videographer. So it’s going pretty well.
Pat Flynn: What’s it gonna look like this year as far as volume, units, all that?
Sarah Rocco: So we wanna help 260 families, 250, 260, right around there. Volume, right around 80 million.
Pat Flynn: Absolutely huge. So in your goal back in 2019, was you’re going to be the top team in North East Florida. How, is that still the goal?
Sarah Rocco: Well, we’re still gonna be number one at some point, but I see ourselves all over Florida.
Pat Flynn: Okay.
Sarah Rocco: You know?
Pat Flynn: So what is it now? I mean have you… I love talking about pivots because one of the things I had told you I wanted to talk about, and then the one thing I’m struggling with now, is having this very defined business plan, which I’ve seen your personality profile, and I know you’re… I know how defined and granular you get with your plan. You told me the exact number you’re off right now.
Sarah Rocco: Right, right. [chuckle]
Pat Flynn: So what is the balance of that and being opportunistic at the same time?
Sarah Rocco: Well, so while I am somewhat that way, I’m still very much the visionary, and then I have Samantha, who’s my right-hand. She’s the integrator, so she makes me a little bit more organized and know my numbers. And my business coach is always forcing me to know my numbers ’cause I’m more big picture. What’s that gonna look like? And I think that’s important for a leader and a visionary to make sure they’re consistently putting that vision out there. So it seems like I’m that way. I’m very specific about making sure we get there, but I don’t always go granular on how to get there. It’s just, “I know we’re gonna get here. And here’s… And then you go figure out. Samantha, you go figure out how we’re gonna get there.” And so one time last year, she’s… I said, “You know, I just… ” I had to take some personal time off. I went through a lot of personal things last year. And she said, “I’m pushing you and pushing you,” and I was like, “I just need a break.” And she said, “You told me that we had to get to this number, and I’m just doing it.” And I was like, “You’re awesome,” because I wanted to back off because I had personal things, and she wouldn’t let the team back off, and we hit our number.
Pat Flynn: Awesome! I mean that reminds… That story reminds me of… Have you read the book Vivid Vision?
Sarah Rocco: I have not.
Pat Flynn: By Cameron, Cameron something? I mean there’s a trillion books on writing a vision and doing that, but that what he talks about in that is painting the picture for your team and having awesome people that can execute it for you, which it sounds like you have.
Sarah Rocco: Right.
Pat Flynn: So how do you… And empowering them to be able to make decisions and do that. So what are some ways that you deliver that vision to your team to where Samantha can make decisions without you because she knows, ultimately, where you’re going in the end, so she doesn’t have to come to you for everything? How do you deliver that vision to them clearly?
Sarah Rocco: Well, read Rocket Fuel or Traction and understand your role, and then everyone else’s role on your team. So I’m the visionary, she’s the integrator. I stay in my lane, she stays in her lane, but it’s taken three years for me to stay in my lane.
Pat Flynn: Yeah.
Sarah Rocco: ‘Cause I like to veer into her lane. And so telling them where you wanna go and know what you’re owning, each owning, and then set them up on understanding their path to their next role. So they all want… Everyone wants opportunity, everyone wants growth, and I found if I can show them a path of how they’re gonna get there, “Now, you have to hit this, this, this, and this to reach your next level,” that’s the key. It doesn’t have to be super granular yet. It can be blurry, and blurry’s okay, but you have to show them that that’s where you see them in three years. They’re still gonna be on the bus, they’re gonna be at a different seat. And you might pivot, you might change, like you mentioned, but they still have a place in your organization.
Pat Flynn: How do you show them what their place is in three to five years if you’re not 100% sure yourself? Or do you have an org chart of what it’s gonna look like?
Sarah Rocco: Yeah, we have a very detailed organizational chart.
Pat Flynn: Of what it’s gonna look like in three to five years?
Sarah Rocco: Yeah, so up to 2025, a very clear of what it’ll look like now. It doesn’t say who will be on those seats on the bus, or even the clear paths for them to get there, but there’s their upward mobility, according to their personality types and then their passions and where their skill set is. So the positions are there of who we’re gonna need and what that’ll look like. The job description of that position isn’t there yet, the granular job description of it. Does that make sense?
Pat Flynn: It makes a ton of sense. And the reason you saw me make that face is ’cause I don’t have… That’s something we don’t have here just because… We have a clear… We follow Traction, too, we use EOS, we use that, all that, and we have our accountability and organizational chart, but I don’t have a good grasp on what that looks like in three to five years from now. So I’d be curious, what did you do? Did you sit down by yourself and vision? Are you using someone else’s blueprint? Or what is it?
Sarah Rocco: Yeah, so there’s several large teams, and there’s one team that I love, The Sarah Reynolds Team, and I love her vision and what she’s doing, and she’s a massive organization. And so I’ve studied different positions and what that would look like. And at the core of who we are, we wanna be a customer service, like an anticipatory customer service company. So we’re reaching out to people before they need us and helping them. And so if we’re building our organization with that being the core of who we wanna be, then we fill in these different seats.
Pat Flynn: Got it.
Sarah Rocco: I think the hardest part, though, is everyone wants the seat quicker than they’ve done their due diligence or spent the time to learn the industry. Someone in six months are like, “I want a raise and I want a different position.” It’s all titles and titles, and I hate titles, but you have to have titles in an organizational chart in some capacity.
Pat Flynn: You need them.
Sarah Rocco: Yeah.
Pat Flynn: And people need to know who’s in charge ’cause it creates confusion.
Sarah Rocco: Yeah, but I wanna walk into a room and I want them to not know whether it’s Samantha or I that’s the leader. I like that. I want everyone I’m around with to be such a strong leader and have such a strong presence that they might not even know who the owner is.
Pat Flynn: At some point, they need to know who to ask the question to, though, right?
Sarah Rocco: If it’s not me, I’d rather it be my Director of Ops, my CO, CEO, COO.
Pat Flynn: What if… So yeah, that’s… I can see that if you have… But would she be the main person, or would… Is Samantha your COO, what you could see?
Sarah Rocco: No.
Pat Flynn: Okay.
Sarah Rocco: Not at this time. We’re not at that point yet, but as we grow, there’s definitely opportunity for that.
Pat Flynn: Got it. So something you mentioned last time that I think you embody really well is… I’m quoting you, I wrote this down, that’s why. I think you quoted somebody else, but I’m quoting you.
Sarah Rocco: Oh, boy! [chuckle]
Pat Flynn: Have you been in real estate five years, or have you been in your first year of real estate for five years?
Sarah Rocco: For your fifth time?
Pat Flynn: For your fifth time.
Sarah Rocco: So I’ve been in real estate for six years. And am I in my sixth year of real estate and growing at a sixth year agent level, or am I in my sixth year or first year for the sixth time?
Pat Flynn: Right. And there’s a lot of people that go the latter way, right? There’s a lot of people that get in production, they’re making great money, and they just stay on that rabbit wheel or the hamster wheel. Why do you think that is? What is the difference between someone like you that’s gonna take that step forward? What made you not just… I’m sure you’re making… I remember you did 27 transactions year one, and you’re hustling in Starbucks and banging on doors. What was it in you that made you wanna build a team and not just do that same thing? You make great money doing that.
Sarah Rocco: Yeah, I mean, you just… As you evolve as a human being, you start seeing where your passion lies. So for you, being in front of the camera and the video side of it wasn’t your passion. I thought my passion would be selling homes and being the only face of our organization. And as I grew, I wanna change the lives of others. And that might sound a little bit cliché, but it’s just, it’s where my passion lies, is: How do I coach and mentor others to be successful, and then we’re there together? Could I do it on my own? Of course. Is it fun? Is it lonely? Is there lack of collaboration? What does that look like? That’s just not something I want on my own, and I just… My goal is to be in a whole different role one year from now, two years, three years, five years from now; not to continue doing the same thing year after year and not have any growth.
Pat Flynn: Alright. We have a… I feel a similar way about that. I mean just, I was just… We have alignment meetings, so where I meet with everyone once a month, and I had mine with Sean today, who’s one of our newer sales agents. And I was telling him, I was like, “You know, we do these alignment meetings and everything, and at this point, for me, it’s really not about the money at all. It excites me way more watching you step up and get deals done.” I was, “Whether the deal you do is… Makes 70 grand or it makes five grand, I am equally as happy both ways because I really enjoy watching people grow. I enjoy… I’m super proud of everybody in this office and having a great team. I think everyone here is really impressive, and I love when people walk through the office and are impressed at the people we have ’cause everyone’s phenomenal. That’s what makes me happy.”
Sarah Rocco: And then has it given you freedom in your life?
Pat Flynn: No.
Sarah Rocco: It hasn’t?
Pat Flynn: For me, not yet. What do you mean freedom? I have time?
Sarah Rocco: Freedom like… Yeah, freedom of time.
Pat Flynn: I’m not there yet. [chuckle]
Sarah Rocco: Okay.
Pat Flynn: But yes, that’s the way we’re going down.
Sarah Rocco: Okay.
Pat Flynn: What it has done, though, is we’re buying… We’ll probably buy 15-20 houses a month, whether I’m here or not.
Sarah Rocco: Right.
Pat Flynn: That’s what we’re heading towards. I’m still very much, I guess you would say, in production, too. And that’s a large part of our volume, but we aren’t going down that way.
Sarah Rocco: So if I’m gonna ask you: Will you ever be out of production? You asked me that, so…
Pat Flynn: 100% I will be out of production. I think it’s gonna be sooner or later. Out of production of single family, yes. I think there’ll always be the one-off houses that come through, but there’s a lot of guys and girls in this organization right now that are continuing to step up in a big way to where I’m not doing them a service, standing in their way, saying yes or no to every house that comes through. They’re just as good as me. What the hell am I doing? I am gonna serve them better, stepping up and doing the mentoring thing I do, and also looking for bigger deals that can create more, even more revenue for the company so everyone can expand.
Pat Flynn: And the way I look at scaling is if I’m gonna stay in production as someone that’s buying single-family homes forever, I’m not giving people like Sarah, people like Monica, like Mercedes, the opportunity to step up into bigger roles ’cause I’m always gonna be their…
Sarah Rocco: The ceiling.
Pat Flynn: I’m gonna be their ceiling. And I’m not growing the company beyond single-family homes, so they don’t have opportunity to step up into more operational roles. So right now, we’re doing stuff like reaching out and buying Airbnbs. We’re looking at commercial and industrial projects, which gives everyone in the office opportunity to not do the same thing for the rest of their life and step up. And I think I owe them that, and that’s the main reason we are scaling. It’s not for more money; it’s to create an awesome organization and give everyone that’s here the opportunity to be what they want to be and make the money they wanna make.
Sarah Rocco: Yeah. It’s a sharing culture. It’s a culture that’s bigger than yourself.
Pat Flynn: Yup. So I love that, I’m passionate about it. So tell me about the EOS implementation in a real estate group ’cause I don’t know… I know the guys well at the DLP. I don’t know if you’ve heard of DLP before. Their brokerage is in Pennsylvania, but they’re down here in St. Augustine also. But they’re the only real estate group I know that’s implementing EOS. So how has… When did you implement that? I want that.
Sarah Rocco: Well, we’re not deep in EOS. We’re really deep in the VI role. So having the level 10 meetings, having the same page meetings, having… It teaches you how to have a schedule in lanes with your right-hand person. So we started that in January, and…
Pat Flynn: Of this year?
Sarah Rocco: Of this year.
Pat Flynn: Okay.
Sarah Rocco: I was changed…
Pat Flynn: What do you mean you’re not deep into it? You’re having L10 meetings and stuff, and you’re doing Vision Traction on that. What part aren’t you deep into?
Sarah Rocco: Yeah. I don’t know.
Pat Flynn: Seems like you’re pretty deep into it.
Sarah Rocco: Maybe I am deep into it. I just feel like there’s more. There’s different levels because the companies that I’ve heard are doing it at greater level.
Pat Flynn: Okay.
Sarah Rocco: So I’m pivoting ’cause I’m mixing a few different models together. So we’re doing… We’re really big on the financial side of the profit-first model.
Pat Flynn: Yup.
Sarah Rocco: And that’s changed our business.
Pat Flynn: Has it?
Sarah Rocco: Dramatically. ‘Cause you’re taught wrong your entire life that revenue minus expenses equals profit, but it should be revenue minus profit equals expenses.
Pat Flynn: Yeah.
Sarah Rocco: Right? It’s not a genius thing, but now our profit margins are about 40%. So we’re a profitable team, which allows us to then go reinvest in other avenues and into the business.
Pat Flynn: Yeah, that’s… I didn’t make it through that whole book, but it’s… That is… It’s just a different perspective and different way of looking at things. But you’re having L10s. Are you doing Rocks too? Does everybody have Rock? All 17 people have Rocks?
Sarah Rocco: Yeah. Yeah. We have, and then we have our three Rocks and our strategies priorities of how to get there.
Pat Flynn: Awesome. Are you using the software?
Sarah Rocco: But we call it like a 411. It’s a different name ’cause we’ve combined KW models with the EOS.
Pat Flynn: That sounds awesome. It sounds like… What I really wanted to dig out is, did you get more organized and more stuff done once you implemented that? Because with us, before we implemented Traction, it was… We’d have meetings and we’d go over stuff, and there was never a strong accountability culture. We’d talk about stuff and then it’d just never get done. So until we got the meetings organized with an issues list, which made to-dos and quarterly rocks. That was an absolute game changer for us.
Sarah Rocco: And I used to always throw stuff at the operations team, randomly. And now I save it for L10 meetings, or our same page meetings instead of them getting bombarded with all my ideas or all my changes and stressing them out. Now there’s a time and a place that I’m gonna be able to unload all of that, ’cause I have to.
Pat Flynn: Yup. No, and that was another thing with us. Nothing gets done. If you have a great idea and you run to Samantha and you say, “Hey, blah, blah, blah, blah, blah, blah, blah. And do this and this and this. I wanna make a video of my day, and this and this.” And then you walk away, forget about it. She’s like, “Well, is this a priority or?” That was a hardship.
Sarah Rocco: And how is it driving the business forward, and if it’s not, then it goes on the back burner.
Pat Flynn: Awesome. So let’s shift a little bit. I’m curious your opinion… Well first off, you guys are still in the South Side. Are you in the South Side office, your whole team?
Sarah Rocco: Yeah. We’re in South Side. Hopefully we’re going to have our own independent office this year. Yeah. This year, or early next.
Pat Flynn: Okay. And, what are your feelings about what’s going on in the market right now? What are you guys… Obviously, this is one of the best markets Jacksonville has ever seen, as far as home prices. But what are you seeing from a consumer and business owner standpoint? How is it affecting you?
Sarah Rocco: Well, I haven’t ever… I’m fairly new in relations with some other agents. So I haven’t seen a market that is majorly shifting or changing until now. So I’m enjoying it.
[chuckle]
Sarah Rocco: It’s fascinating to watch customers if I happen to lose an opportunity to sell someone’s home because they’ve decided to go with an eye buyer, I stay in touch with them and I watch the process through the end. Because they’re sharing with me and I’m educating myself, instead of being offended and that they’re sharing with me exactly what’s happening. So I’m learning. So then I go into my next appointment and I can say exactly this is what’s going to happen either way, and it comes from a point of educating the buyer or the seller.
Sarah Rocco: So I think it’s been really fun. But there’s a lot of people that are exhausted from it, more so consumers. Very exhausted from it. We’re doing a lot of coming soons for our sellers to drive anticipation and they’re getting people hassling them and knocking on their doors and really being super aggressive.
Sarah Rocco: And so that’s an invasion of privacy. So that’s hard and at the same time, people are desperate. So it’s hard to see the home buyers that their dream is to buy a home and they keep losing every home because maybe they don’t have the financial ability to pay over appraisal or the financial ability to pay all their closing costs, whereas you used to have a seller pay part of their closing cost. So that’s heartbreaking. And that’s hard to deal with when you care about your customers. So we’re navigating all of it and trying to help our customers come up with different ideas of how they can be more attractive in this market, and it’s challenging.
Pat Flynn: When you say you’re 26 or 27 families behind where you wanted to be, is most of that because of the fact that they keep losing out on houses? Or is it listing volume that you’re missing out on?
Sarah Rocco: No, so I take about 14 listings a month. That’s my goal. I’ve hit it every month this year, until May. May I’m a little bit behind, but I’ll get there.
Pat Flynn: So listing flow is…
Sarah Rocco: Listing flow is where people are saying, “There’s no inventory. There’s no… ” Well, did you quit lead generating? Let’s be honest, did that get in your head to where you quit the activities? So it’s not that. What happened was is end of last year I took off about two months. And when we should have been onboarding the help we needed to be fully functioning in January, we onboarded in January. Now they’re almost up and going and they’re functioning. So we’re a quarter behind. So I know what we did wrong.
Pat Flynn: Okay, so it’s not a market thing. It’s that you have full control over it. Okay.
Sarah Rocco: Mm-hmm. So we’re planning for 2021 and for the growth in 2021 or 2022, what we need to do this year. So we’re already like beefing up our bench for people that we’re gonna hire.
Pat Flynn: Got it. As far as the listings go with the appointments or anything, are you seeing a lot of pushback because of eye buyers or anything like that?
Pat Flynn: Everyone is curious. Everyone is in the educational side of it and discovery of what’s gonna be my best option, what’s the least hassle. I used to go in there and I would just give my presentation, and I came in with everything I thought I brought to the table. And now I go into any appointment as what’s most important to you. And if that’s an easy transaction, if it’s not going on the market, if it’s timeframe, whatever it is, I’m catering my entire presentation if you will, to what they’re looking for. And so if I need to pull out a list of investors that I know that would make an offer on their home then I’m being the eye buyer for them.
Sarah Rocco: But everyone has different margins and that’s what I’m finding, is there’s some well known eye buyer programs that are coming in far over value. I’m like, “How, where? Is there any meat on the bone left?” But I literally have congratulated my seller, because I said I would do the same thing. ‘Cause you just physically could not get that if you went on the market. And I think it’s a battle of territory.
Pat Flynn: It is. They want market share. They need revenues to be going up every single month. It doesn’t really matter if they lose money or not so.
Sarah Rocco: Exactly. It blows my mind.
Pat Flynn: It makes it really hard for someone like us to compete and then actually have to make money to compete against them. But we’re just super honest with people, and we say, Hey, they’re… We’re not even in the same ballpark. We’re not even playing the same game. So we talked to the Offerpad people recently, just to see what they had going on, what we had going on, and I was like, “Man we aren’t competition for you guys. We aren’t playing in the same arena.”
Sarah Rocco: Whole different business strategy.
[laughter]
Pat Flynn: If someone’s saying and you’re making them…
Sarah Rocco: You can’t pretend that you are.
Pat Flynn: No, no, we don’t. You mentioned that… I love the idea of the fact that if you never stop lead generating, it doesn’t really matter. I’m putting words in your mouth a little bit. But it doesn’t matter what goes on with the market if you’re consistent and have a plan. That being said, are the leads you’re generating getting more expensive? I say that because on the direct to seller, I work with a lot of wholesalers and guys that send out post cards for kind of we buy houses sort of marketing. And the HomeVestors guys, and last I talked to a lot of those guys, they’re paying about $10,000 in marketing for one contract. So it costs them about $10,000 in marketing between postcards, whatever it is, cold calling, Google Ads for a contract. We’re a little lower than that. I wanna say we’re around $5000 for a contract. I think that’s a tribute to how good our team is and how good our people are. But that’s in $2000… Last time we talked, it was more like $2000. So are you seeing that at all? And do you track as a KPI, like cost per listing? I’d be interested to know.
Sarah Rocco: We do. And then we hold our listings accountable to bringing in a buyer or it’s two per listing. So our marketing has to be the coming soon and the drive by text and the…
[overlapping conversation]
Pat Flynn: Two buyers per listing is your benchmark.
Sarah Rocco: Mm-hmm. Mm-hmm. But we’re very organic. So we do a lot of… My one job is database, past clients, asking for business. So I’m not actually on the phone calling expired FSBOs, circle prospecting, anything like that. My primary role is database and sphere of influence and past clients. So yeah, we do have people that are doing the expires and the FSBOs and the circle prospecting and all of that, but we do not… You would be shocked how little we spend for leads.
Pat Flynn: Really?
Sarah Rocco: Shocked.
Pat Flynn: And are you spending money on Zillow or you’re just cold calling expireds and FSBOs.
Sarah Rocco: Uh-huh. Yeah, I would say our budget, and I don’t have the exacts in front of me, but we’re probably spending on seller leads about $1000 a month.
Pat Flynn: That is incredible that you’re gonna be doing 80 million dollars spending a $1000 a month on marketing. What you attribute that to? Just being really having a ton of referrals, ’cause of your customer service level?
Sarah Rocco: We have some leads that are a cost of sale. So you have to give a referral. So we’ll have agent referrals coming in from other states. And so that’s a cost of sale. But from an expense standpoint, our expense for a paid lead is very low.
Pat Flynn: Wow! So why not, if you are behind 27… Let me ask a dumb question here. If you’re behind 27, why not triple, quadruple what you’re spending?
Sarah Rocco: We just had that talk two days ago.
[laughter]
Sarah Rocco: Just on our Wednesday L10 we had the talk, yeah.
Pat Flynn: If your leads are so cheap though, from our perspective, we have an average that we’re making per house. We track very closely money in, money out for marketing. So every dollar we spend on marketing makes whatever. And we’re waiting… We keep spending more every single month until we find that point of diminishing returns. Are you guys doing that?
Sarah Rocco: Well, you have to have the manpower to follow up with it. So we looked at it and you only have so much time. So you can get all the data you want and all the leads you want, but if you don’t have a system in place to follow up with it, then just it is what it is. It just sits there.
Pat Flynn: Are you still using Follow Up Boss?
Sarah Rocco: Mm-hmm. We went to Command and now we’re back to Follow Up Boss.
Pat Flynn: Okay. So you like that.
Sarah Rocco: Mm-hmm.
Pat Flynn: So why can’t you use the systems within Follow Up Boss to follow up with those people? Is it more of what is your process… You don’t have the personnel to… You have the agents.
Sarah Rocco: Yeah. So our goal is to get 50 leads a week. And right now we’re getting anywhere from 100 to 150 leads a week. Buyers and seller leads. And I would say about 75% of them are scrubbed and ready to go. And so with the manpower we have, ’cause there has to be an element of personal touch. You can put them on a drip, but at some point they have to be touched when they respond with one of our agents or whatnot.
Pat Flynn: You need more agents.
Sarah Rocco: We need more agents.
Pat Flynn: Got it.
Sarah Rocco: We’re looking to hire.
Pat Flynn: Well, anybody listening, could you sell me real quick on being an agent for you? I know you’ve done this probably a bunch, and do you mind doing that?
Sarah Rocco: I don’t mind at all, yeah.
Pat Flynn: If I’m gonna join… ‘Cause we’re live right now, I got a few people watching. If I’m gonna join the Rocco group as a real stage agent, why would I do that?
Sarah Rocco: I usually ask them what they love to do.
Pat Flynn: So what I love to do is I like getting deals done. I like getting papers signed.
Sarah Rocco: Okay. So you like to go out there and show the homes, find the home they like and then get the paperwork signed, contract, all of that.
Pat Flynn: Well, I’d rather do the listing but yeah.
Sarah Rocco: You’d rather do the listing.
[laughter]
Sarah Rocco: Higher dollar return. Okay, so that’s your goal. So do you like the paperwork?
Pat Flynn: No.
Sarah Rocco: Okay, so you ideally wouldn’t like to do the paperwork. Do you have a lot of money to put into marketing yourself? How do your financials look?
Pat Flynn: Not a ton. That’s why I would wanna join a group, I think.
Sarah Rocco: Okay, yeah. So what I would say our benefit to you is that you could… Could you be successful on your own? ‘Cause we only hire people that could be successful on their own. But can you get there 10 times faster with a team? With coaching and mentoring and someone taking off what I call the 80%, which is all the paperwork, helping keep you accountable, keep you organized. Could you maybe get there in five years? The market could be wildly different. Will you survive? Maybe. If you have a lot of grit. But do we guarantee that you’ll be successful when we break down our numbers? We have a success rate of people making six figures in their first year.
Sarah Rocco: One of our girls made $120,000 in her first year. Another guy made $95,000 in his first year. Can you find me another job where you have no overhead, you have no risk.
Pat Flynn: No risk.
Sarah Rocco: And you’re young. Some of them haven’t even gone to college and you’re making six figures. Just find me another job.
Pat Flynn: Huge.
Sarah Rocco: Another guy on our team, he just brought in a really nice contract. We figured out his dollar per hour. He’s making $560 per hour on that transaction. Another one was $325 per hour. I said, “Go find me another job where you can… ” Do you work a lot? Sure. But do you have the leverage with the team? Can you go out of town and know that your people are taken care of? Yeah. So, it’s a game changer.
Pat Flynn: Oh yeah.
Sarah Rocco: Just through our marketing and a lot of agents, they want to be branded. And so we still want you to be branded as yourself under the umbrella of The Rocco Group and we provide the branding for you, the ability for you to be really present in the community.
Pat Flynn: Awesome. No, that makes a lot of sense.
Sarah Rocco: We don’t really recruit that much. We have a lot of agents that come to us.
Pat Flynn: Do you?
Sarah Rocco: Yeah. And they wanna be a part of it.
Pat Flynn: South Side is a great office.
Sarah Rocco: Yeah. But I’m very much in the trenches. I’m coaching and mentoring and we’re very present. And I think a lot of leaders try to get out of it too quickly and the culture doesn’t remain the same.
Pat Flynn: Sure, of course not.
Sarah Rocco: So don’t get out of it too early.
Pat Flynn: No, I’m not, believe me.
Sarah Rocco: So did I sell you?
Pat Flynn: Yeah, you did.
Sarah Rocco: You’re gonna sign up?
Pat Flynn: Sold.
[laughter]
Pat Flynn: I wanted to dig into your hiring process just a little more, ’cause I actually interviewed a while ago a girl that went through your hiring process but she got red lighted at some point.
Sarah Rocco: Oh no.
Pat Flynn: So I’m curious, you don’t… You say that, right? Where else can you not go to college and make six figures your first year? But you don’t just hire anybody, number one, and it’s just not easy. You need to be that right specific person that fits to your culture, that fits every piece of it. So, can you talk about just your process with hiring and how that goes and your struggles with it?
Sarah Rocco: So yeah, I’ll usually sit you down and say, “What’s your… How long do you have before you wanna make a decision of what your next move is?” And if they say a week, I’m like, “Okay. Well, I just want you to know our process is about five weeks and it’s five interviews. And we’d love to go down this journey with you, and at any time it’s a red light, green light for both parties, both you and us. And if it’s not the right fit it’s not the right fit. But I can guarantee you that when you go through this process, you will come out knowing yourself more to know what your next move is if it’s not here.” So there I want them to…
Pat Flynn: What is the process called?
Sarah Rocco: KPA. It’s a Keller Personality Assessment.
Pat Flynn: Okay, KPA. Yeah.
Sarah Rocco: It’s a full-blown personality behavioral assessment, unlike the DISC, unlike any of the other that you would recognize. And so it’s that and then we do a verification of it. “So the assessment brought up this, is this the truth? Is this really… On a scale of 1 to 10, would you rate this as accurate or inaccurate? And why is it accurate? And why is it inaccurate?” So it’s gonna give us all into their personality, all into their behavior. And then we go into their thought process. How do they think through things? And so then we’re really getting into their head and then we get into their life story. “Tell me about your life story. If we’re gonna go down this journey together and I’m gonna help you change your life and you’re gonna change our lives, I wanna know you on a really deep level. I want you to be vulnerable and transparent.” So we go really deep on their life. Because then when they’re struggling, you take them back to their why and they come out of it.
Sarah Rocco: So then we do a defense of why… If this person left in one year, what would make them leave? If this person didn’t succeed, what would make them not succeed? And we go through that. So we already know the blind spots or the things that we’re gonna be looking for. And then a group interview. And I wouldn’t be present if I was the one that took them through the interview or if Samantha took them through the interview, we wouldn’t be present and they would just be on the firing squad with the team. And we go through just our culture at the group interview, to see if they’re our culture fit. We can teach skill. We cannot change their culture. And then we do… That’s it. So then they go through a 30, 60, 90 day process, and they really don’t have the job until they’re through the 90 days.
Pat Flynn: That’s pretty intense.
Sarah Rocco: And we try to red line them in the first 30. It’s like the Navy Seals.
Pat Flynn: Right. [laughter]
Sarah Rocco: Hello week. Hell week.
Pat Flynn: Why wouldn’t you grow faster if you were just in… What if you just recruited full-time?
Sarah Rocco: I’m not really looking for bodies.
Pat Flynn: Recruited good people full-time. Are you trying to grow? Are you growing at a certain rate? I’m just trying to pick some holes into…
Sarah Rocco: Yeah. We’re growing according to our standards. So if our standard for someone on the team is to help 24 families a year, we’re hiring to that goal. So as we grow… So come October, we’re hiring according to our breakdown of families helped for 2022. And that’s how we know where it’s time to hire more. So could we go and just hire a bunch of bodies, like a couple other teams locally? Maybe. But I think it waters down the culture.
Pat Flynn: No, I would agree with that. And I think just from my perspective, I did a little research too into you guys again, today, compared to where you were a couple of years ago. And it seems like you just kept it so tight with all of your branding in your video and everyone’s on point. All your agents are on point and everything is very good. So congratulations with that.
Sarah Rocco: We have high expectations, but I tell them I hold myself to a really high accountability level. And I’ll hold you there too. But you won’t find an owner or a leader that will take care of you if something happens like I would. So when 2020 hit, I had made sure I always… My reserves are there to where I could fund every person for a year.
Pat Flynn: Wow.
Sarah Rocco: If I needed to.
Pat Flynn: Now, that’s… I’m sold, Sarah. I’m gonna be one of your agents.
[laughter]
Sarah Rocco: Alright. Where is the paperwork?
Pat Flynn: I wanna finish up with your thoughts on what is going on. What is your prediction for the future, and what is happening right now in this market. Are you gonna be able to stay consistent with your goals in this market with this obvious inventory, kind of a crisis, right? It’s a housing crisis. You have great people that can’t find houses and the rental market is the same way. Families can’t find houses to fricking rent. Be it in the worst part of town or some of the best parts of town like the beach. Try finding a rental at the beach right now.
Sarah Rocco: I know.
Pat Flynn: Where does this go over the next year? Do prices stay stable or does it continue to go up?
Sarah Rocco: I think we’re gonna see a plateau. I don’t think it will crash by any means, but I think at some point it has to just level out.
Pat Flynn: Has to, right? [chuckle]
Sarah Rocco: Yeah, it absolutely has to. So I’m already seeing it in some of our properties where a seller wants to test the market, and they’re not getting the numbers they want. So it tells me that buyers are… And we have buyers that are doing their own CMAs and bringing it to us and saying, “This is what I wanna offer on a home.” So buyers are being cautious about what they’re buying. I do think that we’re gonna see a pretty strong market for the next rest of the year. But then I think it’ll plateau out.
Pat Flynn: We feel the same. It’s just supply and demand.
Sarah Rocco: But I’m also ready for anything. You can expect one thing. I don’t have a crystal ball.
Pat Flynn: Sure.
Sarah Rocco: You don’t either. And we’re just… It’s just fascinating to see what’s going on.
Pat Flynn: Yeah, it really is.
Sarah Rocco: Every day is something new.
Pat Flynn: Let me finish with this. What is the biggest challenge you’re facing right now as not a person in production, but owner of The Rocco Group? What is your biggest issue impeding… It doesn’t even have to be growth. Impeding something you’re trying to work on that’s really bugging you. A challenge that you’re trying to break through as a business owner.
Sarah Rocco: Wow, that’s a good question.
Pat Flynn: I can tell you what mine was the other day. We already talked about it, and I’m battling through it right now. As we talked about earlier, you have your accountability chart, what it’s gonna look like five years from now. I want that clarity here, too, because I got, like I said, the people in my fucking office now, I have phenomenal, phenomenal people, everybody. And I wanna be able to… And I challenge them in weekly one on one meeting or monthly one on ones. It’s like, “You’re really talented. Think about setting goals. Where do you wanna be?” And I got some pushback of, “Well, I don’t really know. I wanna be here. I wanna be with you for a long time, but I don’t really know what my options are.” And I was like, [chuckle] “You’re right. I haven’t laid it out.”
Pat Flynn: But at the same time, buying houses the way we do is way more cyclical than what you’re doing on the retail side. We are much more affected by the market, I think, than you are. Just things like it’s not… Sometimes it’s good to hold rental, sometimes it’s not.
Pat Flynn: Sometimes you have a buyer that comes into town that we sell everything to. Sometimes you have to do construction on everything. It’s just we have to pivot a lot. So it’s very hard for me to look out three, five years and see exactly what it looks like in here, you know what I mean? Rather than just… I compare it to Don Werner, a friend of mine who’s DLP. He is a fund, almost. So he raises money year after year, and he’s getting better and better at raising money. He raises more each time. But it’s very easy for him to look out three, five years and be like, “We should be raising this much money at this point if we’re raising this now.” And that’s my challenge now, is painting a good three and five year picture for people that deserve to have a three to five year picture and see what their opportunities are, where YellowBird’s gonna be.
Pat Flynn: I’m blindly leading now. But they deserve more vision of what the future is gonna be. And my challenge is a defined business plan versus in our industry being opportunistic with investment opportunities. That’s what I’m fighting through right now.
Sarah Rocco: I could see that, yeah. No, I love that. So I’m probably fighting with being a little too cautious. So I know the forward-thinking of our industry or for us is to start ancillary companies. So like kind companies that you’re already doing business with and creating this entire organization where The Rocco Group is just the vehicle for title, for insurance, for property management. So all these ancillary companies…
Pat Flynn: Mortgage.
Sarah Rocco: To where then the company… The people that have been with me for a long time, they might not ever get equity in the hub, but they could get an opportunity to be a part of an ancillary company. But I’m very cautious. I see all these teams that are going this route, and I’m struggling with my cautious disposition where I don’t want to take this leap and fail. So I need to talk to myself about like even if you failed, what would you learn from it?
Sarah Rocco: And I’ve preached it all the time. But actually doing it, I’m just very, very cautious. So it’s like a constant struggle in my mind. But knowing I have really big talent on my team, they’re gonna need something. And to me, it goes there. It goes outside of real estate. That’s where my head’s at.
Pat Flynn: Is that the blueprint you are following? Is it Sarah Reynolds or what’s her name?
Sarah Rocco: Sarah Reynolds.
Pat Flynn: Does she have title mortgage?
Sarah Rocco: Yeah, she does. Absolutely, yeah. And she has a whole home improvement company. Because ideally, you have to become the one-stop shop for someone to really see a lot of benefit to where you could… We’re a concierge team. So if someone wanted us to flip their home before putting it on the market and fund the whole thing, we could do that. It’s just there’s so many different avenues. But for me, it’s really taking the leap into something bigger.
Pat Flynn: What is the first one that she did?
Sarah Rocco: What was it? I believe it’s insurance.
Pat Flynn: She did insurance before title and mortgage?
Sarah Rocco: But I think she did three at the same time.
Pat Flynn: Got it. That’s a huge jump.
Sarah Rocco: It’s about the right person, though.
Pat Flynn: Yeah. If you have a phenomenal operator and you’ve got great people and someone’s ready to step up then that’s when it’s time and do it. Does it feel right to do it right now or do you think…
Sarah Rocco: That’s why we’re really focusing on building out a really strong operations team, a really strong sales team before I’ll go get excited about a shiny object. Whereas there’s some people that are just like, “Let’s go. Let’s try it. Let’s do it.” My business coach is like, “Come on.”
Pat Flynn: Who do you use for that?
Sarah Rocco: So I’m with Craig Zuber. He’s the CEO of MAPS Coaching.
Pat Flynn: Okay. So is it MAPS? Okay. Awesome. MAPS is great.
Sarah Rocco: Yeah. He’s great there. He’s a head coach. I don’t know what exactly his role… But he pushes me to think outside of real estate, which is really good.
Pat Flynn: Good. Hey, the…
Sarah Rocco: Makes me uncomfortable. [laughter]
Pat Flynn: The best in the world have coaches.
Sarah Rocco: I know. Yeah and then I have a great mentor as well. So surround yourself around the right people. That would be the thing I would recommend to you is start taking some of your key people and connect them with the right coach or the right mentor to help them grow in their role. It doesn’t have to be you.
Pat Flynn: Yeah, it probably shouldn’t be me in a lot of cases. Do you do that? You actively find…
Sarah Rocco: Mm-hmm.
Pat Flynn: Oh, that’s interesting. Cool. Well that’s all I got, Sarah. That was a great conversation. I enjoy talking about this stuff and it seems like I enjoy how some of the issues and stuff we’re having are kind of the same and the way we hire… I didn’t really talk about our process but it’s pretty intense, too.
Sarah Rocco: Is it? Okay.
Pat Flynn: It’s not five interviews but it’s… We use a software called Spark Hire and we use [chuckle] Culture Index which is a watered-down version of the KPIs, which I’m familiar with the KPIs ’cause of Jane. She used to be in that. So Matt is telling me to plug Connect so…
[laughter]
Pat Flynn: Connect is June 3rd. We’re finally back. We would love…
Sarah Rocco: Yay, that’s awesome.
Pat Flynn: I know. We’re really excited about it. We’re putting a lot of effort and energy into making it cool ’cause networking events especially… We buy houses. Investor networking events can be fucking lame and boring. Ours are not. I love having agents at our…
Sarah Rocco: I love your events.
Pat Flynn: Yeah. CC is a big part of it. And we have top agents and we’d love you to be there and representing also because it’s not just about investing. It’s about business growth and stuff, too. I’ll be doing the keynote at this one and…
Sarah Rocco: Nice. Okay.
Pat Flynn: Talking about just the past five years for me and what I’ve learned about scaling, what I’ve learned about happiness and mindset, and what really true fulfillment is in life. So it’s not even really a whole lot [laughter] of real estate investing, a little bit.
Sarah Rocco: Yeah, it shouldn’t be. It’s why do you do what you do? At some point, you have to have another reason than money.
Pat Flynn: It’s gotta be a purpose behind it. And I feel so good about the fact that… It was 100% about money when I got into it.
Sarah Rocco: Oh sure.
Pat Flynn: Scaling is a lot of work. And at this point, money is not a great motivator for me anymore, it’s really not. But being there for the people here motivates me really more.
Sarah Rocco: It’s so good. I would say we’ve both changed a lot the past few years.
[laughter]
Pat Flynn: I think so, too. Yeah.
Sarah Rocco: It’s so good.
Pat Flynn: Yeah. I really enjoyed listening… A couple of days ago, I listened to our podcast before and I’m really…
Sarah Rocco: It was blown away. [laughter]
Pat Flynn: Oh my God. I could tell I was struggling to keep the… I wasn’t even listening to what you were saying because I was thinking about the next thing I was gonna ask you. But now it’s like since it’s not even really an interview format, it was just laid back on a Friday, we got way more out of it. So thanks again for coming.
Sarah Rocco: Thanks for having me.
Pat Flynn: We’d love to…
Sarah Rocco: And you’re coming out to our team soon and you’re gonna chat with our team individually and about what you guys are doing. And give them an investor perspective which we’re really excited about, so thank you.
Pat Flynn: Yeah. And I have a really good presentation for that, too ’cause I can show them exactly how I run numbers on houses. And I bet in 45 minutes, I can turn them all into people that can run numbers the same way I do. And they can either send us deals or do in your flipping fund that you’re doing for your team. They can feel better about the numbers because they’re running it the same way I do.
Sarah Rocco: Just you, the way you’re giving back to the community, I just wanna say kudos to you.
Pat Flynn: Thank you.
Sarah Rocco: It’s amazing.
Pat Flynn: Thank you.
Sarah Rocco: And just the transparency. I heard someone the other day, they were like, “Do you know the YellowBird guys?” I was like, “Yeah, Pat’s actually a really good friend of mine.” And they were like, “They’re so transparent in how they’re doing it.” And they were shocked.
Pat Flynn: It’s ’cause it’s really… We were just talking about it today. There’s no secrets to the way we find deals. We’re consistent.
Sarah Rocco: And it’s not scarcity mindset of like, “You’re gonna take my business,” ’cause there’s enough to go around which is a mind shift.
Pat Flynn: The purpose of our whole company here, our purpose statement is abundance through growth and execution.
Pat Flynn: I love it.
Pat Flynn: So abundance is something we talk about all the time, and I am a hammer on people for personal growth, we have… One of my favorite things about what we do here is our book club, we call it Sequoia Club, and we read a book every six weeks or so, and someone else leads the book club, the meetings are every two weeks early in the morning on Thursdays, and people just get so much out of it, ’cause you’re not gonna necessarily go home and read personal growth books on your own, not everyone does that for fun like I do, [chuckle] so it pushes people and I can… The appreciation of the fact that everyone is a different person than they were six months ago, and we continue to grow and we execute, we don’t just talk about shit is… That’s what makes the world go round.
Sarah Rocco: What are you reading right now?
Pat Flynn: We’re reading The Surrender Experiment by Michael Singer. It’s outside of the box. Matt hates this one. [laughter] It’s very much… You know who Michael Singer is?
Sarah Rocco: No. Well maybe.
Pat Flynn: He was the CEO, I guess, of Medical Manager and WebMD, and he’s just a big meditation yoga guy.
Sarah Rocco: Okay.
Pat Flynn: And it’s about surrendering, kinda what I was talking about, the balance of making this defined business plan, but also surrendering to life and saying yes as opportunities come. So he’s lived his whole life, just the work… The job that the universe puts in front of him, and I think this guy is a little far out there, but he’s been very successful and whatever job gets put in front of him, he puts his own personal wants and needs aside and gives everything he has to the job that’s in front of him, and it’s interesting to watch his life weave where it’s gone because of it. And I think we can all relate to the situations in the past where you met the perfect person at the perfect time, or you read that perfect book at the time that you needed to read that book, right?
Sarah Rocco: Right.
Pat Flynn: And just saying yes and being more open to things as they click, that’s what the book’s about. And keeping it the mindset that, this is kind of what my talks about too, the fact that we’re on this planet that is a rock that’s floating through out of space and the universe is absolutely huge, so your time here is short, so enjoy it. And that’s what it’s about.
Sarah Rocco: Oh, and listen to yourself so, if you’re not clicking with the book, it’s not the right time for that book. So then go find a book that it is the right time for it, ’cause a lot of people read just to read, but you have to… It has to hit you at the right time.
Pat Flynn: Absolutely. To have the right impact.
Sarah Rocco: Yeah.
Pat Flynn: Yup. It’s books, that’s the same with quotes too. Or even a talk, like a keynote talk that something I heard six years ago is not gonna resonate the same way. A perfect example of that is I used to listen to a ton of podcasts when I was getting into this seven or eight years ago, and it’d always be like people, people, people, grow your team. It’s not about… Your upside is limited, if you’re doing this on your own. It’s all about having a good team, and I didn’t value that for fucking years.
Sarah Rocco: I think about the people that came and went through time.
Pat Flynn: Yeah, and now we’re in a spot where we have awesome people, and I’m like, my time should be spent finding more people that are awesome, not doing deals.
Sarah Rocco: Or finding ways to better their lives, which is a by-product of success you’ll have. Yup. Good stuff.
Pat Flynn: Yeah. Awesome.
Sarah Rocco: Yeah.
Pat Flynn: Thanks again, Sarah.
Sarah Rocco: Yeah, you’re welcome. Thank you.
Pat Flynn: Thanks, everybody for listening. Connect is June third, Thursday, 3 o’clock at Jack’s Golf and Country Club. It’s gonna be awesome, we’re putting a ton of effort in it, and it’s gonna be a lot of fun, so we hope to see you there.
