The Importance Of Establishing Systems And Processes In Real Estate With Casey Smith

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Systems and processes are essential because they are the veins that allow the flow of work to be efficient. Just like in any other business, real estate investors need to establish systems and processes, too. In this episode, Dallas real estate investor and the Owner/Operator at Atlas Transaction Coordinator Services, Casey Smith explains how systems and processes are essential to any business and how they have been very important to hers. She explains why you need to treat your investments like a business. She also shares why delegating tasks, doing a SWOT analysis, and learning continuously are vital to your survival as a business owner. Tune in and gain insights that will help you take your business to the next level!

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The Importance Of Establishing Systems And Processes In Real Estate With Casey Smith

In this episode, I’m joined by a local legend here in Dallas, Casey Smith. Casey, how are you?

I’m wonderful. Thank you.

Why don’t you tell the audience a little bit about yourself?

I’ve been in Dallas and in Texas for many years. I have only been in real estate for a few years. However, I have an interesting background as a media analyst for a company out of Zurich. That’s a whole other life, but I do feel like I was groomed to be in real estate by my background. After getting a Master’s in Politics and Media Studies, I went into media analyst, eventually to sales, and tumbled into real estate.

I’m a licensed realtor here in Dallas. I only work with investors and only people doing fix and flip or wholetails. I don’t deal with a lot of buyers. I’ve got that on the side. I own a company that does transaction coordinator services for investment companies nationwide. Most of the people reading this, basically handle the paperwork, the timelines, and communication. We do that and that covers my bases. I also do invest in properties myself.

Casey, I start every week off with what we call the Bottom Line Up Front, the BLUF. When I was in the Marine Corps, they always said, “Never bury the lead.” When you go in to brief the general, make sure that he knows the most important thing up front in case he has to get up and leave, you take mortar fire or something like that. Bottom Line Up Front is the most important thing you see happening in the market now, things that you think investors should be doing, and things you think they shouldn’t be doing. On the BLUF, go.

The bottom line is that a lot of things depend on a lot of things. I ascribed to Ray Dalio’s philosophy that if you’re worried, you have nothing to worry about. If you aren’t worried, you probably have something to worry about. You should be focusing on reality and what is happening in real-time because, at the end of the day, you can’t predict a lot. It’s important that you focus and treat investment decisions like you would a business. Even the stocks, you’re just purchasing tiny pieces of businesses. If you don’t have the mindset to understand the systems, the processes, and the supply and demand for whatever that business is, then probably you shouldn’t be investing in that.

Most of the people that are probably reading this are either starting their own business, running their own business, or looking to invest. Those can be combined things. You can only really deal with identifying what’s important to your business and what you can know. If you’re making predictions, investments, or decisions based on fear or a prediction of what’s going to happen, you might find yourself in a little bit of trouble. I would highly recommend that you do that SWOT analysis that you would do on your own operation in any investment decision that you make.

Lastly, I would say to focus on understanding that this is a long play. Investing in and of itself, money isn’t typically made on day one. You’re not looking for your cash returns up to 5, 10, or 15 years over that. If you start looking at your numbers that way, you’re not going to be as panicked about what’s happening in the first five.

In keeping that overall perspective and looking at the microeconomics and things that are happening within your sphere, you will be able to identify certain patterns, pivot, move, and be agile. Bottom line is that you need to position yourself to be agile to be able to pivot when things shift and change and not be fearful. You got to buy right, pay attention, work in reality, and treat your investments like a business.

Let me unpack that. Treat your business like a business. Are you telling me there are people out there that don’t treat their business like a business?

It depends on what stage of business you’re in. I’ve got mentors that have helped me identify what stage I’m in and how to exit and enter the new one. Everyone has to understand where they are. Most of my clients with my transaction coordinating company are closing 5 to 10 deals, but we’ve got those guys doing the 1 to 4 that are in a different stage of business. They’re in the startup or perseverance phase where they’re surviving.

They’re moving, transacting, and getting the money because they don’t know what’s going to shift. The companies that are in their viability stage are slowing down slightly. Maybe they’ve got some freedom where they’re not sitting in every seat and they can observe and watch what’s happening. Not everyone understands how to run their business or knows what to look at. Most of the mentorship that they’re getting in our sphere is from people in real estate, not necessarily people that have grown and successfully built or exited companies.

Much of our businesses or businesses model after our own personalities. An ADD investor like myself is going to be able to build an ADD business and have ADD processes. Whereas the investor that may be super detail-oriented may have a little more trouble pulling the trigger on things. I wanted to go all the way back to your intro, “Tumbled into real estate.”

I almost feel like I was groomed into it unknowingly, but I tumbled into it without a question. I was always jealous of people that knew what they wanted to be when they grew up. I realized now that I’m super grateful I never had that vision. I always approached everything I did with an open mind and opportunity. If it was a field or something I loved, I would understand the dynamics of it and be interested in it. I went to school to get my Master’s after a long stint of backpacking and living my best life in my twenties during 2008 and 2009.

I was making six figures living in the Cayman Islands tax-free. I was in a different world at the time. I had never experienced that. I ended up falling into a media analyst position out of grad school. I got recruited out of a class for something and ended up working for this company, traveling all over the world and working with some high-profile people, The World Economic Forum, and all these crazy things in my twenties.

I got burned out pretty quickly with the idea of that corporate job because I was exhausted. I was losing hair. I ended up getting married, which didn’t work out so much, but that was what brought me to Texas. I slowed down because I wasn’t able to travel the way that I did. I tried my hand at nonprofits, but the way they operate is not my cup of tea. I was told I made too much money raising money and to calm down. That was an odd experience. I knew it wasn’t for me.

My partner at the time had gotten me into sales. We finally looked at the house and were like, “Why don’t we sell the whole house?” We were doing windows and siding. I ended up being good at it and I didn’t expect to be. I got my license and the rest is history. I got interested in investing and the creative side of it. I had already been in people’s homes all day, every day for a few years so it was a natural transition. That would have been around 2017 and 2018.

I’ve been licensed since then. I tried my hand in some wholesaling, fix and flips, and things like that. I used to door-knock foreclosures prior to 2020. That was a fun start. I feel like I’ve earned my stripes a little bit. After that, 2020 hit. I went through some personal changes and found a little niche of a need for transaction coordinating, which I felt was the lifeblood of the operation. I built an army of them because I couldn’t find a good one.

Some of the best businesses are born out of our own internal needs. I want to talk about niche businesses, transaction coordinating, being a realtor, in sales, investing, rentals, and being burnt out. What is a SWOT analysis? I love that you said the startup/perseverance mode. I want to start with the SWOT analysis because you said something interesting. Walk us through the importance of even a real estate company doing a SWOT analysis and maybe even growing on the whole “treat your business like a business” aspect.

A SWOT analysis simply is to identify Strengths, Weaknesses, Opportunities, and Threats in your business and operation. That can be internal or external factors. At the end of the day, you should have a pulse on both of these things. A lot of times, our heads are down, we’re wearing all the hats, and we’re in the weeds. We’re not able to get on that hill like the general who’s on that hill.

They’re the ones that are truly watching and seeing everything in play. They know what squads are behind. They know who’s lacking resources. They know who’s getting attacked. They know where people are moving because they’ve got that 10,000-foot view. I always treat a SWOT analysis like that. It’s something that I don’t think people do regularly enough. They typically will do it once a quarter. That’s good. Some will do it once a year. I do it weekly with my team.

We’ve structured our meetings in a way where we’re always identifying how many steps we take towards our goals. What was our strength this week? What are some issues that we’re having, things we’re hearing that need to be addressed, and feedback? What opportunities have come our way? Have we noticed a bottleneck and a process that we can improve upon that can actually help our efficiency and keep our costs down? It’s things like that.

Threats can be a variety of things. It could be someone on your team. Are you keeping them on because you need someone to fill that seat even though they aren’t doing great? Is inflation hitting? Is your cost to buy materials rising? These are all threats to your bottom line and your cashflow. If you can identify the core things that are important to your operation and even if you don’t know, track them.

Throw a bunch of stats down, track them, and see where the correlations and the patterns are if you don’t know. That’s generally what I like to do because my business is dependent on everyone else’s businesses doing well. I’m a service company. Although it’s not my main source of income, it is cashflow to me. That’s how I look at that business. It’s purely cashflow that I can make other investments with other money.

I tell people all the time to not look at business as a job or what it does. Realize what it is. It’s a business. It’s an income stream. I always say, “The business is not the dream. It’s the vehicle.” It’s what gets you. No real estate investor ever was eighteen years old and said, “Mom, I just want to sit in a dirty house with some guy blowing smoke in my face. That’s what I want for the rest of my life.”

“Mom, I want to take phone calls from mean people on Saturday night at 8:00 when they check their mail.” Nobody ever said that. There’s a challenge that even though we are in a service business, which was another business you were in, that is specialized. You can still run it like it’s a normal business. I’ve proven that they can be saleable. I sold the REI Expo back in 2014 and it was the only expo in the business.

There was nothing before, but there was value there. It had recurring revenue. It had a large email list. It had a social following. There were valuation metrics around it. When we sold REI Choice Insurance, it was purely off the recurring revenue. The cashflow is like your transaction business and what made that one more valuable was the fact that it did not require my involvement. It wasn’t my job. It was something I own. Talk about structured meetings.

They are just that. They are structured. It’s accountability. Sometimes it’s hard when you’re the CEO or the owner, but you’re also operating. Most of these guys are the ones closing their own deals as the owners. You got to hustle. There’s a period of time for that, but it should be with the goal of exiting. You didn’t start that to be hustling like that every day. The number of phone calls I get from my clients every day, they asked me, “How are you not in operations anymore? How did you do it?” We did it in two years.

What we do is with the guidance of mentorship. I’ve got mentors that have built and sold multimillion-dollar companies. They taught me on day one to put structured meetings in place. There are a bunch of different types you can do. We call these our L10 after traction where you’re identifying, “How close are we to our goals for the quarter? What are we hearing? What are the issues? What are our stats every single Friday?”

There are a lot of days we don’t want to do it, but going over those numbers, you’re going to see if anything is shifting or turning red or not a pattern that you’re used to seeing. It allows you to pivot very quickly. We do things like that. We also use structured meetings for processes because that the worst job ever is putting processes in place, but they’re needed. Everything that’s successful is because it’s been systemized or processed.

You can do that with anything. You just have to identify what the core predictable things are and what are the anomalies. Having one day a week to be, “What’s the process that feels the most chaotic? Let’s map it out.” What are we doing and how should it be? Little things like that are going to get you to your goal way faster than just grinding, hustling, and trying to outwork everybody because it’s not sustainable.

I like to be the dumbest person in my company when someone asks me for help on something. If you want help on a loan at RCN Capital, you don’t want to talk to me. Because I’m just going to be like, “I don’t know. I’ve got to go call somebody and figure that out.” It’s because that’s not what I do. If I didn’t know when my file with your transaction closing company is going to close, I probably don’t call you.

You can, because we’ve got systems and processes to look that up immediately.

It’s the moment it’s not the most efficient, right?

Yes, and it takes a lot of discipline for an owner to pass that. another side to the coin is empowering your team to do the job. When people ask me, even if I know the answer, I still say, “The best person to reach out to would be Anysa.” I train my team and clients to do that. I redirect them to the place and that’s your first thing to do. Everyone feels like they want to jump in and they think they’re helping, but you are causing chaos. My biggest lesson in April 2021 was how much chaos I caused when I genuinely thought it was the right thing to do to jump in, take over, and handle it. It was not the best thing to do.

We’re at a trade show and the loan officer’s like, “I got to go handle this. They need the insurance binder and the close date.” I said, “Wait a second. You’re the originator. Shouldn’t the processor have put it in our proprietary loan origination system?” “Yes.” “Who’s asking for it?” “The closer.” “Tell them to ask the processor.” He’s like, “It needs to get done.” I was like, “You’re creating a system where there’s no accountability. There’s no reason for someone to do their job even if you’re going to do it for them.”

What’s that famous murder that happened on this street? It’s this famous thing that happened in the 1950s where this woman was getting attacked in the neighborhood and everyone was just watching. No one stepped in. It’s human nature to do that. When you see a bunch of people asking and there’s a lot of hands in something, everyone’s always going to assume someone else has the answer or someone’s going to hop in who is probably a go-getter who’s like, “Don’t think, do”

They’re going to be like, “I don’t care. I’m going to figure it out.” They’re the ones waving the paper in the air disrupting everybody. It’s unnecessary. It breaks the process and systems. As an owner, I would look at that person and be like, “Where was the breakdown here? Does everyone not know their roles? Do they not know their lanes clearly? Let’s document it and make sure it’s known.”

An Airbnb tenant of ours contacted my wife and could not get in the front door. This is after the electronic lock malfunctioned. They were using a little manual key. My wife says, “What do we do?” You said, “Don’t think, do.” I’m the “don’t think, do” guy. I’m like, “I don’t want to deal with this at 8:30.” I pick up the phone and google emergency locksmith in San Antonio. I dial us in. Here’s the address. Go. I hang up. She’s like, “How much is that going to cost us?” “I don’t know.”

I would have done the same.

Here’s the great thing. Ten minutes later, I go back to my phone. The guy writes back, “Thanks. We already got in.” Now, I’m calling the locksmith. They’re going to charge me a trip fee. I’m going to have him go ahead and go fix the other lock. That way, I don’t have to deal with this. I’m all in a hurry. I’m in the “don’t think, do” stage and I talk to text in the Airbnb app. “I’m going to go ahead and let the locksmith come on and look at it because he’s already going to charge me a trip fee.” Somehow it got transcribed as a trip fee because of you.

That’s a great example though. It’s chaos. David Richter of Simple CFO, a friend of mine posted something from a mastermind. He came out with Profit First for Real Estate Investing. It’s a great book. It was a quote that said, “If you’re constantly putting out fires, you’re the arsonist.” It’s my favorite quote because it’s profound. I sat on that quote for a while and told it to my team. “If you’re on fire and you feel chaotic, it’s probably you causing the chaos. Let’s take a minute. Let’s step back and let’s figure out how to get you in a system and a process where you don’t feel that way.”

It seems like systems and processes are your things. We’re going to do the Money Minute and then Rapid-fire. Casey, my favorite part of every episode has ended up being the Money Minute. Imagine there’s a young Casey out there, maybe burned out on the job and living on the islands, or a young entrepreneur, a business owner that’s struggling. They’re only going to get 60 seconds of advice for the next 30 days. That’s this 60 seconds. After they listen, it’s shut off. There’s no more advice. Think of ways you could help someone and the wisdom you could impart. Let’s go.

My advice would be to invest in yourself for an hour every single day. Mindset might be part of it, but it’s also to educate yourself. Make yourself valuable in this industry. Most of us haven’t lived through an extensive crisis. We think back to 2008, but there’s a lot more that happened beyond that. At the end of the day, it’s important that you take an hour to learn, educate, and figure out where you’re going to put your own cash and work with what you have. Don’t listen to people that are on a different level than you. Focus on the here. Stay grounded in reality and at the end of the day, it’s your future. No one’s going to care about it as much as you.

You said one of those things that I love the most that my wife says to me all the time. It’s, “You can’t get there from here.” Often, you see people make their decisions based on what the billionaire is doing. If you don’t have $1 billion, you probably shouldn’t do everything the billionaire does. Let him or her catch the falling knife and then once you see it’s not falling anymore, maybe then you grab the handle. It’s simple, but I’m going to go through some Rapid-fire. What are the common bottlenecks in the real estate investing ecosystem?

They’re everyone else you can’t control. If they don’t have systems and processes, you can’t control that and you’re playing a waiting game. Understanding other people, how they operate, and what’s important to them will get past that bottleneck.

On your team, I’ve seen you hiring more. I’ve seen you replacing. What are some of your personal processes and things you look for in filling out your team?

Just because someone has experience in something doesn’t mean they’re going to be good. It doesn’t mean that it’s the right role for them. What I look at is understanding what they love and hate. I ask that question all the time. I also asked them what would make them quit within six months to make sure that I have a good managing style for them and a culture. I say those two things to make sure they fit your culture and that they are in the right seat. I test everyone in Predictive Index as well.

I have an ideal profile based on experience. I’ve got 5 or 6 full-time TCs and virtual assistants. The successful ones all have a similar pattern. I built out a target and test them against that. I’m more able to groom and guide them into the skillset that is their core excellence. They might not always know that. That’s how I try to operate. It’s not necessarily the experience, but the personality and what they want.

Virtual assistants seemed to get a lot of buzz and noise these days. How do you find it is to manage VAs and how are they different than in-person employees?

VAs need structure. People forget that. If you want to hire a VA in your growing business and you haven’t put systems and processes in place, they are going to have a hard time. It’s depending on what stage you’re in. I’m big on that. Are you hiring the person that has the initiative to document for you as they’re learning, growing, and talking to you? Are you hiring someone that needs them already established? That again comes from how they operate best and where you are.

Understanding that aspect of it is going to make you the most successful in dealing with them. I also find that a lot of them are coming from agencies that are trained to do things in a very specific way. A lot of them have cold-calling experience or customer service experience. I’ve got some smart VAs. They probably know more about real estate than most of my clients because they read contracts all day every day. They watched the flow, the operation, and the timelines of things. You would be surprised at what they can do. You got to make sure you’ve got the structure in place or hire someone that can put it in place for you.

Talk about the startup and perseverance stage. It might not be something you have documented, but what are the different stages that you see investors in?

This is off of Eddie Wilson and Gary Harper’s Empire Operating System. They break it down into these core places. A lot of people are stuck in the perseverance or viability stage. In perseverance, everyone’s like, “Hustle and hustle hard.” There’s a time for that but hustle not in vain to get to viability where you’ve got your systems and processes documented. You’ve got reserves to pay your team for a few months. Again, what got you there is not going to get you to growth.

A lot of people skip viability. They go from perseverance hustle mode because they got a couple of great deals. They go to growth and immediately start expanding but haven’t found the efficiencies in their processes. They’re throwing money at things and then when there’s a shift and bad habits are formed in good times, all of a sudden, they aren’t getting that cashflow coming out. It’s important to understand how to get there.

A lot of people stay in viability. Now, you’ve got the freedom that everyone talks about. They’re like, “I can go on vacation. I’ve got people operating my team. I’m in a viability stage.” People that go to the growth typically have to have a bigger purpose. You’re reinvesting your profitability back into your company to grow on a much grander scale and that’s typically tied to a bigger vision or purpose. It’s because you’re probably back in the seat again re-navigating, changing your direction, or growing it to a scale that it might partner with other businesses.

Next is succession. How are you exiting? Are you selling it? There are other stages that no one talks about. They teach you how to get there and start with no money, but they’re not teaching you how to grow and stay in the inevitable highs and lows. If you’re a business owner and you don’t expect good times and bad times, you should get out because that’s the essence of it. You’ve got to figure out how to see them, how to ride them, and how to pivot in them. There’s more to it than just throwing your cash at something and getting money back.

Bad habits are formed in good times. What are some bad habits you see in the real estate investor, the small to the mid-sized business realm?

Truthfully, it’s not asking the right questions to their sellers and whatnot. It’s contracting bag deals and hanging onto them too long, not cutting the rope, walking away, and going after the deals that make more sense because they’re desperate. It’s all they have on their plate. That’s probably a big one if they’re not asking the right questions. They might not know what questions to ask. That’s a huge thing in our company. Have you asked the magic question to figure out what we need to get done?

What’s the magic question?

It depends on the situation.

That’s not magic.

That is the answer to everything in real estate, “It all depends.” If you’re trying to get insurance, the underwriters of an insurance company, or even a lender to take a risk on the deal and you’re challenging something that they want to be done or clear, you got to ask the right question. You got to ask them, “What are you willing to accept that you wouldn’t issue a title policy on this situation?” You got to ask the right question.

What makes someone a good customer of yours?

It’s somebody who’s open-minded to changing their process. We come in and most people that come to me don’t have one established or they do. They just haven’t done it right because they’re not the right brain to be putting that process in place. It’s anyone who allows us to give our expertise of working and servicing over 70 companies. We see the good habits and the bad habits. It’s how quickly they adjust, listen, implement, enforce, and lead their team. The number one thing I see is these leaders that are so anxious to go on vacation and not be in the day-to-day that they forget to lead their team to enforce the process.

It’s a delegation by abdication. I’ve been so guilty of it so many times. What are the three bad habits of investors?

They do not ask enough questions to sellers. They are eager to get it done and don’t want to burden sellers with all the questions. You’re not burdening a seller. You are helping them get through one of the biggest decisions of their lives. Ask all the questions. That’s a bad habit we see. The biggest one I would say is the lack of leadership. They’re like, “I’m so busy. I’m at a mastermind.” Get out of your mastermind and pick up the phone because if I’m calling you, there’s a problem. It’s your deal. It’s your money. You should care about what happens to that transaction.

The third would be thinking that their money is made the day they contract it. Money is not made that day. It is made the day it closes. Your cash conversion cycle is going to shift. From the day you sign it to the day you get your money, a lot of people don’t know what that number is. They don’t know what their cash conversion is. They get upset and anxious. They call, “Why isn’t this closing?” “Sir, it’s because the owner died last night and this is an inevitable part of the situation.” They don’t account for those pitfalls because they don’t understand where those are in the process.

That’s common in all areas of real estate. People cash that check the minute they see the gross number.

I’m guilty of it.

We all have been at one point in time.

I lost $70,000 in one week and I cried myself to sleep that day.

You didn’t lose it because you never had it.

I lost it in my brain. That was my number one a-ha moment where I shifted and pivoted strategies. I started building Atlas after that.

Casey, we’re out of time. Do you have any parting thoughts or shots?

I feel like I have said a lot. I’m going to part with this. I’m young. I haven’t lived through a big recession doing this. For anyone out there who is around my age and experience, pay attention, do the research, and learn beyond your lifetime. Go look back to the ‘30s. We’re in a cycle more like the mid-‘70s to ‘80s, how it happened, and inflation inverted. It’s not 2008, 2009. It’s everyone’s doomsday.

Also, if you hear anybody talking, “I’m predicting it. I’m calling it,” unfollow them because an economist can’t even predict this. The Ray Dalios, the Charlie Mungers, and the Warren Buffetts of the world can’t predict it and they know it. All they’re doing is putting certain things in place to watch the patterns. That would be my advice to you if you’re getting into it, and be conservative.

You are a realtor and you are in Texas.

I am a realtor in Texas, mostly Dallas and I have access to Houston and Austin.

Where are you a transaction coordinator?

We do nationwide. Our company handles any contract or clients nationwide in all 50 states.

If somebody is interested in learning more about your transaction services, how would they get ahold of you?

The best way would be to go through AtlasTCServices.com. There’s a little link to submit an application and that will trigger my team to reach out and schedule a call. That’s the best way. You can friend me on Facebook as well. It’s Casey Atlas. That would be the best way as well.

Thank you for being here. It’s been a joy. Thank you for coming back this week. We’ll be back next week with another new show. Remember, your network is your net worth and you’ve been growing both.

Important Links

• AtlasTCServices.com
• RCN Capital
• Profit First for Real Estate Investing
• Empire Operating System
• Casey Atlas – Facebook

About Casey Smith

Real estate professional specializing in creative strategies. My team and I have closed over 1,500 real estate transactions nationwide since 2017 through my company and my activity as a licensed Realtor in Texas. My mission is to be the leading expert in transactional efficiency and title resolution for real estate investors. I also buy rentals in DFW area!

The following podcast program is furnished by RCN Capital LLC.  The information provided is for general educational purposes only and does not constitute any legal, tax, financial, investment or other professional advice. The views, thoughts, and opinions expressed of any speaker are the speaker’s own opinion and do not represent the views, thoughts, and opinions of RCN Capital LLC.   No information contained in this episode should be construed as financial, investment or legal advice from RCN or any individual, author, host or guest. You should always consult a financial advisor before investing.

• Delegating Tasks
• Income Stream
• Perseverance
• Real Estate Business
• SWOT Analysis
• Transaction Coordination