How to Use Science to Find the Right People for Your Real Estate Business

Estimated read time 181 min read

Real estate is a people business. You could buy several rental properties, but without the right people in the right roles, you’re going to be swimming upstream. Today’s guest has dedicated many years of study to this problem and is here to help you make better people decisions!

Welcome back to the Real Estate Rookie podcast! The success of your real estate business largely depends on the people around you, from partners to property managers. Ahead of the release of his new book, Good Judgment, industrial-organizational psychologist Richard Davis, Ph.D joins the show to share his perspective on the crucial decisions that could make or break your real estate journey. Whether you’re looking to form investing partnerships, find good contractors, or hire property managers, this is an episode you won’t want to miss!

Tune in as Richard talks about the five main personality traits and how they predict behavior. Along the way, he busts some of the myths surrounding emotional intelligence (EQ) and shares the most important questions you should ask someone to determine if they are the right fit for your team. You’ll even learn about the power of perceptivity and why it’s SO important for you to keep this “cognitive muscle” strong!

Ashley:
This is real estate rookie, episode number 4 1 9. People are in danger of losing the ability to judge people. Since we are socially outsourcing online, we all need people to help in our daily lives or businesses. So how can we determine who is a good fit or even our own deficiencies, to then better understand what we need to make better business decisions? My name is Ashley Care and I’m here with Tony j Robinson.

Tony :
And welcome to the Real Estate Rookie Podcast where every week, three times a week, we’re bringing you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. And today we have expert Dr. Richard Davis, who’s an organizational psychologist, CEO and author who’s worked with investors, CEOs, and so much more helping them make better people decisions in the highest level positions by understanding the science of human behavior. So today we’ll get to tap into his behavioral toolkit as we’ll start to understand the science behind personality, how to use it to make better business decisions, and just imagine the impact it can have to partnerships, working with contractors, growing your team, and even your personal relationships. So Richard, welcome to the show. We’re super excited to have you on the episode today.

Richard :
Thank you so much. It’s great to be here.

Ashley:
Can you kind of share on a high level what exactly is a behavior psychologist and how does it benefit business in learning about it?

Richard :
Well, I am a psychologist like most people would know, psychologists. My background, I have a PhD in psychology and I sort of focused on anxiety disorders back when I was doing my research and so forth. But basically there is a sub-discipline within psychology that the official term is industrial organizational psychology, which is a mouthful for basically psychology of the workplace is a way to think about it. So it’s taking all of the science of psychology that if you took Psych 1 0 1 or something like that, it’s taking all of that research and our understanding about human behavior, both on an individual level and on a social level and applying that instead of to mental health and improving one’s mental health and so forth, to applying it to the workplace. Every workplace, every environment has its own unique psychology to it, and that’s basically what the discipline is.

Richard :
On a practical level, most of what I’ve been doing this for about 20 years and most of what I do can kind of be lumped into two categories. One is helping companies or helping someone make a decision about someone else. So using my insight into other people, my insight into psychology to someone has to make an important decision about someone else and they sort of outsource some of that judgment, the insight building, to me, that’s one thing that I do. The other thing I do is work as an advisor or coach for usually senior leaders in helping them navigate the complexities of leading an organization or dealing with all the crazy stuff that happens when you’re managing people.

Ashley:
Now, going along those lines, what are the five traits that actually make up someone’s personality that we should be understanding?

Richard :
Alright, so there’s over a hundred years of research into personality psychology. Basically at its core what personality is, what makes you and me different, different from anyone else in the world? What makes us an individual beyond the physical characteristics is everything outside of that. And there’s been all kinds of research over, like I said, a hundred years or so. And over that time, psychologists came to understand that it kind of all boils down to five main aspects of character or traits that we call ’em. Psychologists have now agree in that number five, and we actually call them the big five. And there’s general agreement, unlike most other things in psychology, there’s general agreement that there are five core fundamental traits. The core traits, the big five really they are as follows, the acronym for the big five is ocean. So openness to others, conscientiousness, extroversion, agreeableness, and the biggest psychology term of them all neuroticism.

Richard :
Now in my view, those are somewhat inaccessible words and while they are helpful and they do distinguish between you and me, there’s a much better way of understanding others and kind of distinguishing their personality. So what I’ve done is I’ve taken the science of psychology and I’ve incorporated a way to categorize behavior. Basically if you are sitting in front of me and trying to get a sense of who I am, I’ve kind of combined these two into what I call the personality blueprint. It’s based on the science and also based on this notion of categorizing behavior. And essentially you can kind of think about it like this. Imagine if you are meeting someone for the first time or at least you want to get to know them a little bit better. Imagine that you figuratively have in front of you five boxes and the boxes are as follows.

Richard :
The first one is intellect. And in that box you’re going to put information about how the person thinks, not just how smart they are, but are they analytical, are they creative, all sorts of aspects of how they think. The second box in front of you is labeled sociability, and that’s basically how that person engages with other people. What’s your social experience of the person? The third box is emotionality and that’s basically about how they express emotions. The fourth box is about drive and drive is not really covered in the big five. It’s sort of slightly extraneous to that, and that’s about why does someone do what they do. It’s sort of the motivational factors. And then the last box in front of you is diligence, and that’s about how they get things done. What’s their work style? How do they approach work? Armed with those five figurative boxes in your head, when you meet someone, you’re inundated with all kinds of information about them. They’re telling you about their stories and so forth. The whole idea about this is to be on the lookout for insights that will fit into one of those five boxes and just sort of place it in that box in your head. And once you have that information sort of categorized, it’s much easier to use that information to interpret and predict their behavior going forward.

Tony :
So Richard, you kind of alluded to it, but I love hearing the kind of framework around the personality blueprint and what we should be looking out for as we place people within our business. But I guess what’s maybe at stake of either not having that information or maybe getting that information wrong?

Richard :
Well, unfortunately we are susceptible to all kinds of mistakes when reading other people. I actually think, actually, if I can step back a little bit further, I think good judgment, think about good judgment. Good judgment in my view is about good judgment about people. So all the decisions that you make in your life were actually, in my view, the kind of sum total of those decisions were a function of all the decisions that we made in our lives and other things as well, but luck and other circumstances. But the things that we can control are the decisions that we make in our life and the successful people that I’ve worked with over 20 years in doing this kind of work. And otherwise, the successful people are those that make really good decisions. And if you could peel back the nature of those decisions, they somehow made good decisions about people, they picked the right friends, they picked the right dating partners or who they’re going to marry or even where to go to school or where to live, who to hire and so forth. Make the right decisions about people and it will lead to success in general.

Ashley:
So we have a good baseline here and we want to talk more about the risk of good judgment and we’ll get into how you can evaluate someone within 30 seconds right after this break. Okay, everyone, welcome back. We are going to get into evaluating people, but before we do, what are the risks? And we want to hear why EQ isn’t in the equation of evaluating personality. So why emotional intelligence basically bs? How does science apply to that theory?

Richard :
Well, okay, a couple of things here. One, from my perspective, emotional intelligence is it’s so overblown. So I argue that insight into personality is way more important, way more valuable than eq. And from my perspective, most of what you probably know about EQ is actually probably wrong. So let me explain. When talking about having insight into other people, everyone sort of points to emotional diligence. I hear it all over the place. I see it in every job description I see now out there has, oh, we want this person to have emotional intelligence. You have online articles everywhere about every great leader in human history has emotional intelligence. I’ve seen articles on Abraham linking Abraham Lincoln having emotional intelligence and everyone that you can imagine. So we’ve just kind of accepted the notion that to understand people you need to have eq, but fact of the matter is the research doesn’t support it.

Richard :
It’s sort of way overblown without getting into too much of the science behind it. Basically the original concept of EQ was developed in the late eighties and early nineties, and that was sort of real. There was a psychologist, Peter Salve and John Mayer who not the John Mayer that most of us know, but he both of them introduced this core concept of emotional intelligence, which they considered to be an ability. Mostly that ability was that being able to recognize and understand emotions in others and frankly in the amongst psychologists didn’t really raise too many eyebrows. But soon after Daniel Goman wrote a book on emotional intelligence and that’s really when things took off. Basically it was everywhere. It was on the cover of Time magazine as the best most important thing since sliced bread. But the problem was is that he kind of turned it from an ability into a disposition.

Richard :
That’s a really subtle but important distinction. So what that disposition had was things like empathy and social capability, being a good people person and look, those are great, those are important. Empathy, I’m all for empathy, but it’s not EQ and shouldn’t be confused with it. So what ended up happening was EQ kind of sounded great. It felt like it should be something, but it just wasn’t a distinct aspect of character, distinct capability in the way that most of us know. Beyond that, I think emotions are no doubt helpful to understand in people, but the problem is is that they are fleeting. Personality on the other hand is enduring and traits are much more predictive of behavior than states are. So basically, while it’s helpful for me to understand that you are angry, it’s much more helpful and powerful for me to understand that you’re an angry person. So my advice is don’t worry so much about understanding people’s emotions at the time. Instead kind of focus your energy on understanding their core personality.

Ashley:
So what you’re saying is if somebody is trying to judge if they’re angry in the moment because something upset them or if they’re relatively angry all the time and it could be something that isn’t even that big of a deal that they’re getting angry over.

Richard :
Yeah, exactly right. So again, it is helpful if I’m in an interaction with you and you’re getting angry at something, it is helpful for me to recognize and try to maybe calm down the situation, but it’s really helpful if I understand that either you are dispositionally an angry person, you are always angry. So this circumstance isn’t all that different than other times or if it’s also helpful for me to understand the opposite. If you are generally a very happy person, and this is outside of the domain of your core personality,

Ashley:
How important is this to understand about yourself as to knowing am I always angry or am I just, there’s so many triggering bad things that are happening that are making me angry, and how does that actually affect you doing business when you can understand the difference between this as to is this just an emotion I’m feeling or is this my whole personality? Yeah,

Richard :
It is super important to understand your own disposition, your own personality, your own traits. So I always advocate to start with yourself. It’s great to start to sort of judge other people and figure out their personalities, but it starts with yourself. So those boxes that I described earlier, really sort of fitting your own tendencies into those five personality traits or those boxes is a super helpful and important thing. It also helps us to understand our own personal biases. We all have biases in trying to read other people and there have been lots of books and lots of researchers that have focused on these cognitive biases. One of them is the confirmation bias, for example, that we have a perspective on someone, an early read on them and then we look for information that will suit that initial impression that we have them. We look for information that will confirm our belief about other people. The more aware that we are susceptible to biases like that and our own dispositional tendencies, the better we’re able to understand other people.

Tony :
Richard, you hit on something important that I want to dive just a little bit deeper into. But you said the information we receive plays a role in that bias that we have of other people. And I guess the double-edged sword of living today in 2024 is that there’s an endless amount of information that we have access to some of high quality, some of low quality, some fair, some unfair, some true, some not true. So I guess how does the information and the technology maybe of 2024 I guess, play into our ability to accurately judge someone using this framework?

Richard :
Well, the interesting thing about insight into other people, I actually call this ability to have insight into other people. I call it perceptivity, kind of a weird word. The whole idea is like a cognitive muscle, which some people have more developed perceptivity than others. And this is what I’m suggesting too, that we all, it’s important for us to build. I think that the issue that the cognitive muscle of perceptivity is actually at risk of atrophy based on what’s going on in the world. Essentially. We are at risk of losing it over time, and most of the reason for that is our heads are in our phone all the time. It’s very hard to really read people and have insight into people. If we’re looking down or even we are meeting people on Zoom all the time, or we’re dating people based on their profile on an app or something like that, or we’re choosing our real estate agent based on a picture on a screen, something like that.

Richard :
The less that we are actually engaging people on an individual basis live and in person, the more that we are at risk of losing this. By the way, a similar thing happened to other similar kinds of cognitive muscles. So there’s a cognitive exercise called wayfinding, which is basically we used to have this ability to intuitively understand how to get from point A to point B. Well, what happened in the introduction of G Ps is we sort of outsource that cognitive exercise, so we don’t even have to think about it. We delegate that to ways over time what happens, you lose that ability, and I’m seeing it everywhere. I was at the Toronto airport coming out the other day and I happened to notice on the way out they have now on the exits this sort of light shining down on the floor, that sort of directional signs on which way to go, this projector coming from the ceiling onto the floor and it says exit this way and so on.

Richard :
I’m convinced that the reason that it’s now shining on the floor rather than being on a normal spot on the wall is that everyone, they leave the airport and they have their heads on their phone, they’re looking down. So I actually think it’s a societal risk. It’s certainly evident in a next generation of kids that feel less and less comfortable talking to people and they’re texting rather than talking. They’re using chat GBT as a means to figure out how they’re going to communicate. Then to put all that aside and collectively look up and really sort of pay attention to others and exercise that perceptivity muscle in order to understand people and then make better decisions in our lives.

Ashley:
And there’s also the fact that most of the time when you’re communicating a camera is stuck in your face and there’s just that little bit where you do act a little bit different on camera. I’m sure there’s a bunch of times you’ll notice that if anyone’s watching on YouTube, Tony and I may look at ourselves on here and actually just straighten up, sit up straight or something like that. But it’s a different interaction too, whether it’s somebody filming a YouTube to communicate what they’re trying to teach people. It’s somebody filming a TikTok to entertain someone or us connecting on zoom right now the camera is stuck in our face. So I think that probably plays a large part too, into how to socially interact with someone face to face just because you’re really not used to it.

Richard :
When I was young, my grandfather used to always say, if you’re talking, you’re not listening. And from my point of view, if you’re looking down, you’re not looking up.

Tony :
I’ve definitely heard that if you’re not talking or if you’re not listening, you’re talking from my mom and my grandparents quite a bit. Richard, one thing I’m curious about is how does this bias actually play out? How have you seen it play out in an actual business where maybe it’s worked against someone who allowed this bias to allow them to make a wrong people decision?

Richard :
Well, I see poor people decisions all over the place. Sometimes it’s in a corporate setting where you have to make a hire and people base it on, for example, what school the candidate went to or something like that. And we also make certain biases, we all do this whether it’s in the corporate setting or not, but we all sort of have a preference for people like us. So we tend to hire or surround ourselves by like-minded people or similar kinds of personalities outside of that in our daily lives, I mean, what’s the divorce rate right now? People make very poor relationship decisions. So part of where I see that, where I see things breaking down is using a framework for understanding people. That’s not based in the science of personality, of course, is what I would say, but it’s based on sort of a set of biases or preconceived notions about people.

Richard :
If you are using a framework for categorizing people that is based, for example, on stereotypes or other kinds of social biases, you can say, okay, someone fits into the good category, but in the end, that doesn’t mean that they’re going to meet the criteria for success depending on what the decision that you have that you have to make is so lose the stereotypes, lose the categories that will not be helpful and focus on stable traits, personality traits that will actually predict behavior. I met one person who for, I’ll give an example of this, categorized dating preferences based on totally wacky things. For example, would never date, he would never date women with small dogs. That was sort of a no go for him,

Ashley:
Same. I wouldn’t either.

Richard :
He would always sort of swipe left on the women with small dogs. Well, that’s fine and all. And there’s obviously some kind of hidden reason, maybe some previous trauma around that. But fact of the matter is that is not a good framework for predicting whether someone will be a good match for you or not. You need to base it on predictable aspects of character like personality.

Tony :
Yeah, and Richard, it makes me think of something that our Ricky should take away is that sometimes we can have that same bias against ourselves. You talked about someone hiring someone based on what school they went to because they believe that person might be better equipped, but sometimes, especially as someone who’s a new real estate investor, we can look at ourselves and say, oh, because I don’t have X, I can’t achieve Y. And I remember I had this realization when I was going into my junior year of college. I had just finished up my first college internship, so it was the summer between my sophomore year and my junior year, and I was interning at Chevron and they have a really big refinery. I was an electrical engineering student. They have a big refinery in California and it was a really competitive program to get into.

Tony :
And I remember I got there and I went to a small state school in California. You wouldn’t know it unless you lived in my area and I was there with kids who were at Berkeley and UCLA and NYU and all these big schools. And I’m kind of looking around and you start to maybe doubt yourself should I even be in this room? But you have to almost rewire that to say, well, look, if I have the ability, if I have the skillset, I’ve done something to get in this room. And you’ve got to break through that sometimes. So just for our Ricky’s, I feel like it’s something they struggle with as well where it’s like, well, I’m not really a real estate investor yet because I haven’t done X or I haven’t done Y. But if you have the skillset, if you’re taking those steps, you can be and you should be, I dunno. Ash, have you seen that on your side fighting some of those limiting self beliefs? Oh

Ashley:
Yeah. I definitely think there’s also the fact of when you are in some of those rooms or in some of those places as to hearing what others are doing and you’re like, I have this opportunity too, why am I not reaching my full potential In the scenario you gave the example as to like, okay, you’re in the room with these people. Maybe they’re talking about how they already have their plan for the next year, they already have these other things built up and you’re like, whoa, I just got here. I’m just excited about this right now. But we’re going to take a short break real quick, and before we know what we need in our business, we need to understand what we are actually good at and what our strengths are so we can find the people that can offset our weaknesses. So when we get back, we’re going to do a quick evaluation on something you can use every day in your life. And we’ll be right back after this quick break. Okay, welcome back everyone. Thank you so much for taking the time to check out our show sponsors. We want to get into what our own deficiencies are and what success looks like in partnerships, but first let’s figure out how we can actually evaluate others. So what are some of the five questions you should be asking to evaluate someone? So Richard, what are those five questions?

Richard :
Well, I prefer to understand people on a chronological level. I actually like to understand if I want to understand someone, I want to look at where they were at in their formative years. Believe it or not, I’m super interested in high school may sound interesting or different. Why the heck would I be interested in someone’s high school experience? It turns out that that’s a formative identity forming time in our lives. We are not who we were in high school, however, it’s kind of the basis for which we have grown and developed. So if you really want to understand someone, ask them what they were like in high school and who their friends were in high school and what kinds of things they were interested in, what kind of student were they were in high school? Did they have a big social circle in high school?

Richard :
Ask ’em about those times and you’ll find really meaningful insightful information about them. For example, a shy person, an introverted person, although those things are slightly different, but an introverted person back in high school may have learned social skills over the course of their lives, but it’s unlikely that they’re going to be super extroverted now. So ask them about high school. Another sort of super question that I like to ask people is tell me about your parents. Tell me about your family life. And okay, the person person says, okay, my father did this or my mother did this. Ask them, how are you like your parent? So if they say their father, how are you like your father? How are you similar dispositionally to your father?

Ashley:
Tony, I think you should take these answers or take these questions and give us some answers.

Tony :
Why don’t we do this? If you’re okay to maybe do some live role play, I’ll be the Guinea pig and maybe you can ask me these questions and let’s see what you can get of Tony’s life.

Richard :
Fantastic. So Tony, in your early years, who were some people, some early influencers in your life?

Tony :
Early influencers. I mean my parents, obviously I picked up entrepreneurship for my dad. A lot of my mom’s characteristics around family and caring for people I picked up on.

Richard :
Okay, let’s talk about them for a moment. By the way, that’s my segue to talking into them about them. You mentioned your dad first. How are you similar to your dad, dispositionally? Personality wise,

Tony :
We’re pretty similar. My dad’s very much like an even keeled guy. Doesn’t takes a lot to get him kind of disheveled. They’re like riled up emotionally. I feel like I definitely got that from him. He’s one of the hardest working people I’ve ever met, so I feel like I’ve adopted that from him as well. So those are probably the two biggest things. And

Richard :
What about ways in which you are different from dad?

Tony :
I think I’m a little bit more focused on relationships than my dad is. I think maybe he’s slid so much into work that he’s not as focused on maintaining those healthy relationships. So I try and do both.

Richard :
Okay. So just in that short amount of time, I learned so much about you as an individual that would’ve been probably harder to get in a different kind of conversation. It’s probably a question that you’ve never been asked before too, and it’s kind of difficult to sort of wease a out of that one because you don’t want to necessarily say anything bad about your dad in that instance. And you also are revealing something about yourself. The whole idea is get people to expose their personality in some way. And a question like that that I just asked you is a way to reveal aspects of your personality in a comfortable way sometimes. By the way, that’s the kind of question that may be easier to ask in an interview-based scenario. It’s a little bit harder to ask someone about their mom or their dad. I don’t know. In a social scenario it’s possible, but maybe not.

Tony :
That’s my new question at the dinner party, right? It’s like

Richard :
That’s your no go-to, okay, you got it. It really is. It is revealing. I will tell you its much more revealing also if you ask it in a way that makes the person feel comfortable. Too many people feel as though when they have to make a difficult decision about someone else, they have to kind of take the person into a windowless room and shine a light into them, making them feel a little bit scared and a little put off. I will tell you that scenario is when people clam up and hide their personality. So the best way you can actually enable someone to reveal aspects of their character is to make them feel at ease, make them laugh a little bit, make them feel as though there’s a connection point between you and then ask them those kinds of questions. But let me ask that of you, Ashley. What were you like in high school?

Ashley:
God, I don’t want to say mean girl. No, no, I’m joking. I think that I was very athletic, so I was on sports teams constantly. I definitely didn’t live up to my full potential. When you first started talking about that, that’s the first thing I thought of is that I don’t have endurance. I was really good at track, but I never gave it my best. I just was good. So I did what I needed to get first. I never went above and beyond. So I think that definitely has light into my future as to how I just did the bare minimum, knowing that it was good enough has played out where if I really want to succeed or excel at something, I have to really push myself on that aspect.

Richard :
Excellent. And if you think about those five boxes that I had in front of my head when I was asking you the questions, I found information to put particularly into that diligence box to say what motivates you and what drives you. I learned a little bit about your sociability. I suspect that you were a sociable person back in high school. And so these are the kinds of questions that are revealing. I’ll mention a third one, which is related to what we were just talking about, which is if you think about, I would ask you, Ashley, were you a sociable person back in high school? Do you have a lot of friends or a few close friends?

Ashley:
A few close friends, yeah. And I’m still the same way as to, yeah,

Richard :
Very good. So if you think about those close friends, most of us have lots of acquaintances. We meet at work and through school and otherwise, but we often have an inner circle, sort of like a few closer friends that we have a special bond with. And that inner circle tends to remain relatively stable over time, such that sometimes people come in and out of it a little bit, but there’s continuity to that. Does that apply to you? Do you have sort of an inner circle of people, friends?

Ashley:
Yeah. Even I’m thinking about going to a real estate event, I clinging to the people that I know, very extroverted that way.

Richard :
So if you think about those people that are in your inner circle, however you define them, are there themes in the kinds of people they are? This is a power question.

Ashley:
I don’t know actually. Yeah, I don’t think so.

Richard :
The way to flip that, if someone says that, the way to flip that is, okay, let’s say you meet someone and you may be able to get along with that person or not work with them or not or network with them or not, that’s separate. But something in that person says to you, that’s not going to be a friend of mine. It’s kind of like the friend turnoff. What trips you off to that?

Ashley:
What would be one of the things that I would say that’s a turnoff? I would say somebody trying to, to please the people around me and to invert themselves into the group of people, I would say would be something that would be a turnoff. Trying to force it too much to become into our French circle. I would say

Richard :
Thank you for playing along with that.

Tony :
That was a tough one.

Richard :
That’s a tough one. The reason why it’s a power question to ask who’s a friend of yours is really what I’m asking. If you think about your friends, we tend to surround ourselves with friends who have similar values to us. So if I want to understand about your values, I would continue on that path that I just did. I stopped you for get you out of the hot seat a little bit. But if I continued on that path to understand who you really, like I said, befriend and become lifelong inner circle kinds of friends with, it’s typically people that have similar kinds of values. So if you want to understand what’s important to someone, what drives someone and what are those sort of values that are important to them, ask about those core friends,

Tony :
Richard. And one follow up to that because I do feel that maybe you have different relationships that serve different purposes. If I want to go to a Lakers game, I’m a big sports fan, that’s a different friend than if I want to go to a real estate conference or if I just want to grab a beer with someone that’s a different friend than if I want to talk about the inner workings of how to manage team members. So I guess is that a normal thing that you have different?

Richard :
Of course. And when I’m asking that question, I’m actually trying to separate that out. I have friends that all the exact same things. In fact, my response to that when someone asks me that question is humility is an aspect of character that I am drawn to. And in fact, the flip side to that is arrogance in people. Just it’s difficult for me to really be friends with purely arrogant people. That’s not to say I don’t work with a ton of arrogant people and I probably have a little bit of that myself. It’s just sort of like what are those things that is a core value, something about humility. It’s not about who I would hang out with at a Lakers game or Toronto Maple Leafs game here in Toronto, that sort of thing. That’s separate. But if I want to know really about core values, I’m asking your inner circle, your close friends, what sort of people they are.

Tony :
So Richard, one thing that comes to mind as we’re talking through all of this is that for a lot of people who are listening to the show, obviously they’re aspiring real estate investors. And we know that for a lot of people who are looking to get that first deal done or scale their portfolio, partnerships play a big role in that, right? Identifying who do I want to buy this next real estate investment with, or who do I want to build this empire with? How does this play into, I guess, how can we use the information that you share with us today to make sure that we’re setting that partnership up for success?

Richard :
Well, it is essential in partner in all kinds of partnerships. And I’ve even had this experience myself. So 12 years ago I started up a firm, I left another firm and started up my own firm. And at first it was just myself in a rented office space and with a whiteboard and crafted on that whiteboard what my strategy would be, and went out to market for the first year. I was doing that on my own and I realized it’s time to actually bring someone else on and partner with them. And I surveyed the marketplace and I found someone who early read was she was extraordinary, was not really experienced, but had some incredible runway that I wanted to learn more about. So frankly, I put her through the ringer and I did my own kind of assessment of her. I asked her the questions that I just asked you and a lot more.

Richard :
And I applied the personality blueprint to understand her as a person. And the whole idea is that personality is what is predictive of behavior. So I knew what was important in a colleague, a partner of mine. At that time it was just the two of us, but I was very clear on what sort of capabilities were necessary in someone to be successful in that I also factored in aspects of my own personality that I needed someone to compensate for, and I’ll come back to that one. And then I assessed her against that and given my own background, actually threw some personality tests at her. I even threw a cognitive test, which is basically an intelligence test. I threw that at her and thankfully she agreed to do it. But then I did this three hour deep dive interview that I do that’s like this insight building conversation where I’m going through the person’s history, asking them questions like I just asked you in a whole lot more.

Richard :
And from that I was able to determine that she had all of the core capabilities. She was a rockstar to be, but she just didn’t have the wealth of experiences. So provide her those experiences and she would soar. And sure enough that played out and she is still with me today, 12 years later, and she ended up becoming the sort of chief operating officer of my firm. And by the way, we ended up growing that to the point where we were acquired this summer by a big multinational firm. So cool, cool entrepreneurial story that started out with just myself and hiring that decision to hire Catherine is her name was by far the best business decision I ever made. I will also mention that I was looking for someone who would compensate for an aspect of my own personality that would not necessarily lend well to growing a big firm.

Richard :
And that was diligence. We all have certain ways about doing our work, and I tend to be much more creative. I love to build and I love to iterate, and I’m good at business development and sales and so forth. I’m less good at the administrative aspects of running a business. And that takes a certain personality trait to be really detail focused, to be accurate, to be structured and disciplined and process focused in a way that is just not who I am. I have all kinds of other strengths I know that I bring to the table. That’s just not one of them. And look, she showed that in all kinds of ways, and the fact that I was able to capitalize on the strengths that she had in that area along with my strengths, made it a magical combination.

Ashley:
So Richard, I’m curious with your quick little evaluation of Tony and I, what is one thing we are each deficient in that maybe we should hire for in our businesses?

Richard :
Oh, I can’t tell you that in that quick one question thing. It might take a little bit longer than that, but you both clearly have social capabilities and you would sort of spike on the ability to engage with other people.

Ashley:
Well, a very kind way to getting this is,

Tony :
Well, Richard, I know you have a book. Good judgment. I would love to hear more about that. Where can people find it? What exactly are they going to learn in that book?

Richard :
Well, I wrote good judgment really for three specific reasons. One, to share my own perspectives on perceptivity and help people build these capabilities. I also wrote it to take a little bit of a ding on emotional intelligence. And I also wrote it because I’m concerned about the broader us losing this notion of perceptivity because of all the technology that I talked about. So I’m really excited for it to come out. It comes out on June. You can preorder on June 11th. You can pre-order it now. The best way is to either go to www.richarddavis.net or your favorite online book retailer.

Ashley:
Okay, awesome. And your book actually launches this week that the podcast is airing, so super exciting. Well also link the information for the book and Dr. Richard on our show page where you can find it in the description if you’re watching on YouTube. So thank you so much for joining us. We really appreciate having you on today. So any last parting thoughts before we close out the show?

Richard :
Thank you so much. It was a lot of fun. Thank you for playing along too.

Ashley:
Yeah. Once again, that was Dr. Richard Davis. Thank you so much for joining us. Okay. So Tony, what did you learn from this episode?

Tony :
I don’t know if it was something new that I learned, but it just reinforced a lesson that I’ve already learned in the past when it comes to bringing people onto my team. It’s not just that you like the person that you enjoy working with them, but are they the right fit for that role? Like Richard said that he brought on this assistant initially who became his COO, partially because she passed all these crazy personality tests that he put ’em through, but also because he knew that he lacked the details and he needed someone who was really good in that area to support him as he grew his business. And when I think about in our business a few years ago when we hired our first assistant, we found we went through three people before we found the fourth person that we actually ended up staying with long-term.

Tony :
Those first three folks that we hired. It wasn’t that they were bad people or that we didn’t like them or they just weren’t the right fit for that specific role. I think we made the mistake early on of hiring for who do we gel with and who do we vibe with, and not necessarily, hey, who is the best person for the spot on this bus? And then we made a similar mistake when we were looking to launch our third party property management company in the short term rental space. I reached out to an old coworker of mine. She was someone who actually worked for me before, and we worked together for I think four years. She worked for me at Tesla, and she’d always talk to me while we were there about, Hey, Tony, I think I want to get into real estate. I just don’t really know where to go.

Tony :
So when I thought about launching Arvada, our property management company, I reached out to her and I said, Hey, I know you’re still working at W2, but would you at all be interested in helping me launch this thing? And same thing from a skillset perspective, I think was great because she was really good at the small details is why we worked so well together in our W2 jobs. But the piece she was missing was, it’s a grind to manage both your W2 job and trying to build something on the side. And the reason she never jumped in before was because that just wasn’t something that she wanted bad enough to do. So I was trying to force that. I don’t remember what personality trait it was, but I was trying to pull that out of her and it necessarily wasn’t there. So when we relaunched Arvato, I found someone who was already doing property management and it was like a light bulb went off. I was like, man, you were the perfect person to help me build this new business. So I think it just reinforced a lot of what I’ve already learned.

Ashley:
Yeah, I had a similar situation with Daryl when we first started working together. He was acquisitions and slowly over time we’re like, this is not a good fit. Because he didn’t really know the numbers. I was still doing all the underwriting, but it was such a disconnect of I actually really enjoy hunting for deals and all of a sudden the thing that I enjoyed was no longer on my plate. And he didn’t enjoy it. He didn’t enjoy looking for deals and talking to sellers and things like that, but he loves any older woman that lives in an apartment and needs maintenance done. I mean, my God, he pretty sure this one lady that’s one of our residents, she’s lived there for 30 years and I’m pretty sure she’s named as the beneficiary on his life insurance if he passes away.

Ashley:
But that he’s so good at that. He’s obviously, there’s pains that come with it, but he’s really good at connecting with people and almost in a sense charming them into, you know what the problem’s, okay, I’m going to fix it for you. And helping them understand and not get overworked. He’s really good at calming someone if they are getting worked up. One of the meanest tenants we have who was mean to our landscapers, everybody, she is the nicest, but it was just like there was never, and I never ever liked communicating with tenants, and he does a really, really good job with that. But it took us time to figure out where his role was. So he does a lot of the communication, handles all of the maintenance side of everything. And so it was a while before we actually figured out how to completely jump positions. And I think that will happen in a lot of businesses when you’re an entrepreneur hiring people, and before you know it in your situation, that just wasn’t the right fit for your company at all. But maybe there’s actually the instance where you transition them into a different position too based off of what their personality is.

Tony :
I think something else asked, Richard asked the question of, Hey, what are some common themes amongst the people that you hang out with? And I think about some of the women that are in your close circle, right? You got Ashley Wilson, Laika, Serena, Kara Beckman. And when you think about that circle specifically, I remember you sharing before that sometimes people will try and shame you on social media. You were traveling and doing this and going to conferences, and they’re like, oh, well, you’re a mom. How are you still doing this? And for you, it’s like, well, no, I do this because I want to be a good mom because I want to be able to have that flexibility and do all those things. So when I think about your circle, I feel like a lot of them embody that same mindset where it’s like, Hey, we’re good mothers and we grind. And so it’s like there is that common thread there.

Ashley:
And too, we’re not needy. We’re not needy friends. We can go months without talking to each other. We don’t need to check up on each other. We don’t feel bad if the other one doesn’t say happy birthday or whatever it is. And that, I think is a huge thing as to they’re not needy friendships, but we are always 100% there for each other when we need each other and kind of recognizing that. So that’s definitely a big thing for me too. And none of us really have friends at home. We hang out with each other. So when we’re home, we’re really just working the whole time, spending time with our kids so that when we do travel, that’s like, Hey, we’re learning about real estate, usually at a conference, and we get to hang out with our friends.

Tony :
Yeah, it’s so funny that you mentioned about the not being needy thing, but Brody Faucet, he and I have this super, I love the guy. We have this super funny relationship where our text message is always three weeks delayed when we’re talking to each other. He’ll send me a voice note and now we’ll reply two weeks later, then he’ll reply to me a month later, and it’s, we’re never annoyed with each other. We just know, Hey, we’re both busy. And it’s like what we’re talking about isn’t super urgent, but that just came to mind with me. It’s like when we see each other in person, it’s always a good time. But Brady, if you’re listening to this, I love you, brother. Now I’ll respond to that test mix you sent me today.

Ashley:
I’m Ashley. And he’s Tony. And we’ll see you guys next time on Real Estate Rookie.

Tony :
This StuffsEarth podcast is produced by Daniel ti, edited by Exodus Media Copywriting by Calico content.

Ashley:
I’m Ashley. He’s Tony, and you have been listening to Realestate Rookie.

Tony :
And if you want to be a guest on a StuffsEarth show, apply at StuffsEarth.com/guest.

 

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