Adam Torres and Jake Breen discuss work life balance and real estate.
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Is it possible to have work life balance while growing a company in the competitive world of real estate? In this episode, Adam Torres and Jake Breen, MBA, Broker & Owner at Dijjit LC Real Estate Brokerage and National Software Referral System, explore growing a real estate company and Jake’s new book, Mission Matters: World’s Leading Entrepreneurs Reveal Their Top Tips To Success (Real Estate Vol.3, Edition 3).
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About Jake Breen
Jake Breen, MBA- In the past 18 years he’s sold over a half billion in real estate ranking in the top 1% of Realtors nationally as reported by REALTrends. Jake’s managed two luxury real estate brands; Sotheby’s and Berkshire Hathaway and he’s been in Berkshire Hathaway’s Top 100 nationally since
He served as a member and a Broker liaison to National ReThink Council. Jakes has spent
the last 5 years continuing to sell with his team in Salt Lake City while training, instructing and
teaching around the USA. When he’s not engaged in all things real estate, Jake has been a Crossfit
games athlete, has his NPC body building card, competed as a top 100 spartan athlete and at 40
years old he can still run a 5 minute mile! Other than that he spends his time with his family of 6 in
Salt Lake City, Utah.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of Mission Matters. My name is Adam Torres, and if you’d like to apply to be a guest in the show, just head on over to mission matters.com and click on Be Our Guest to Apply. All right, so today’s a very special episode. We’re bringing back Jake Breen. We’ve been working on this book with each other.
I don’t know, for the last year or so, is finally out live and in the universe. So for those that haven’t caught some of our previous episodes Jake is a broker and owner of Digit Real Estate Brokerage and also National Software Referral System. Hey Jake, first off, just welcome back to the show.
I. Hey, thanks for having me. Happy to be here. All right, so I’ve been looking forward to this a lot going on in, in the real estate market, and you’re my guy. So I wanted to kind of pick your brain on just the environment, what’s going on in your geography as well. And also get into, of course, we’re gonna talk about the book and maybe dispel, we’re gonna play a little myth MythBusters today.
So we’ll have some fun with that. But before we do, we’ll start this episode the way that we start them all with our mission matters minute. So, Jake, we at Mission Matters, we amplify stories for entrepreneurs, executives and experts. That’s our mission. Jake, what mission matters to you over the last two decades?
Assisting a lot of families with, you know, buying real estate, which is transactional and business oriented. It took me about a good decade to realize that for a lot of consumers, This, A house is perhaps the largest purchase they ever make, so it really matters to them financially, but also a house becomes a home.
Mm-hmm. When. You create memories there and, and, and, and you create a family there and, and you have traditions that are tied to your living situation. And so what really matters to me is taking all of that context in, and not just making real estate purely transactional, but turning a house into a home for people.
Hmm. It’s great love bringing mission-based entrepreneurs and executives on to share, you know, why they do what they do, how they’re doing it, and what we can all learn from that so that we can all grow together. So, great having you back on. And first off, I don’t wanna assume that maybe some of our, our newer listeners caught some of our previous work.
So maybe just tell a, talk a little bit about how you got started in real estate. Sure. 50,000 foot flyover kind of the quick version is, was going to law school. Decided that it didn’t really add up the amount of time I was gonna have to put into becoming an attorney and perhaps making partner or growing a career in a law firm was gonna take too long and call me high functioning A D H D.
But I decided in my early twenties, I needed to start being proactive in the business community immediately. And so I kind of stumbled into real estate. It was a time in my life where I was. Pretty much broke and couch surfing and staying at friends and things like that. And this was the early two thousands right off the.com bust.
And so I bought a home with my brother and my father and the intent was to do the whole house flipping thing. And we did that and it was relatively successful, but our profit margin. Dollar for dollar was pretty close to the amount of money that the realtors made in commissions. You’ve probably heard this a lot.
And so we started going, what other ancillary parts of this business or this transaction could we control? And so that kind of sparked. Me going in the industry. I later went back to graduate school, got an M B A, but just ended up sticking with real estate because by then we were doing flip transactions for ourselves and started doing them for a lot of other customers and it turned into a full blown sales business.
And the rest is history. Or the last couple decades I’ve managed corporate offices at two luxury brands, both Sotheby’s and Berkshire Hathaway, and then went independent. About a year ago with our own boutique mm-hmm. Brokerage here in Salt Lake City, Utah. And then kind of our suite of some of the other businesses we’re involved with from a national doctor software referral system where we help doctors relocate around the country annually.
And a few other things that are ancillary to real estate that we do. Yeah, it’s a great story and and one that I find very inspiring and I wanna stick in those, those earlier days a little bit longer and, you know, sure. The reason I wanna do that is because right now a little bit of uncertainty, right?
We’re going, coming off the pandemic. Some people are either, you know, by choice or not by choice, have been transitioning into new, new jobs, new work situations, this gig economy. So if we can think about, let’s just say, you know, back when you were getting started, what were some of those? Things that helped you kind of get through, let’s just call it the, the couch surfing as you called it, days.
Sure. You get through that. Yeah. Hey, that’s a great question, Adam. I’m gonna approach this in two ways because I’ve done a decent amount of philanthr work at the college that I did, grad school, Westminster, here in Utah, and I’ve worked six years in the M B A department doing a lot of mentoring and things like that.
So I get this question a lot. Mm. You know, what is that launching board? How do you really start? And I think. I said, I’m gonna explain it two ways. Yeah. I think there are some age old adages that have stood the test of time, you know, the the hard work and the early bird gets the worm, and a few things like that that I’ll expand on.
But then I also have always been kind of passionate about, obviously the way. Tech and other things are influencing and changing a lot of industries and the massive amounts of disruption we’ve seen at an extremely fast pace the last two decades. Mm-hmm. Everyone agrees faster than any pace in history.
So we’ve got kind of two philosophies moving forward. We’ve got the age old adages of this is what the veteran you know, world War II era or Great Depression era generation thought. Helped and that was kind of the, you know, pick one company and start the 4 0 1 K early mm-hmm. And grow the ranks of that company.
And that was the road to success. And then Boomers came along and said, that’s kind of true, but you need to add college to that. And it’s just mm-hmm. You know, what’s gonna separate the haves, the have nots as a college degree? And they really hung on that in the eighties and early nineties. And then you got kind of, especially millennials and then even Gen Z going, whoa.
Look at the percentages, like kind of everybody gets a college degree, does it still have that same kind of value? Hmm. So here’s my take with my personal path Plus advising a lot of current mm-hmm. M B A students and it’s a few things. Number one, ideas really are a dime a dozen. I mean, how many times have you been spit balling with a buddy and heard, Hey, I’ve got an app idea.
I gotta protect that. I gotta protect that one. Yeah. How many times have I said that? Yeah, right. It’s so hard. Yeah. Yeah. I got an app idea or, and, and then online it’s like now everything is fast and Yeah. You know, so cheap. Or you can outsource it and somebody will create that for you. So in my experience, especially six years in the M B A department, I tell students, look.
Ideas really are a diamond dozen. And so what kind of separates ideas that sift to the top? Unfortunately it’s not necessarily the greatest idea or this amazing thing that you could patent. It’s typically what sifts to the top is some of those age old adage things that have made people successful.
It’s really dedicating to something, having a mapped out plan and a and a purpose for either that business idea or that product or whatever it is. Building a business plan around it and sticking to that. That’s one, that’s kind of the, the, the effort part. Yeah. And then the second part, and you know, in my career, this is likely what’s mattered most, and I did not know this at the time.
It’s kind of just looking back. I understand and it’s your network. It’s Yeah. You know, aligning with. Right people, the right minds, and having an environment or a culture once you start growing and you either added business partner or your first employee, and then five and then 10 it’s having a culture and environment and that’s get, I mean, there’s a lot of books on how that gets harder as it gets bigger.
Mm-hmm. But. Keeping that work ethic and environment going, those types of things. You, you can look to great teams. Yeah. With mediocre ideas and you know, they spit out very profitable idea after profitable idea and things that work because they’ve got a engine, they’ve got a system that is gonna make a mediocre idea.
Work in the business community versus, you know, the best idea ever. That never really gains legs because there’s not a plan around it. Mm-hmm. And there’s not a team that can bring it to fruition. Yeah. No, it’s, it’s great advice and it’s and actually it’s a great transition here because speaking of ideas, I mean, you have, you know, a software company, obviously you have a brokerage side.
You’re, so, you’re, you’re a busy guy. And part of what I wanted to talk about today was really just that concept of balance, because you got, you know, a lot of different things that have grown over the years for you. Like how do you maintain like that, that thought process of balance and kind of juggling it all.
Yeah, this is probably the topic I’ve been most passionate about the last three or four years. And it’s not because I was necessarily good at it, it’s because I’ve struggled with that balance and I got into my forties and, you know, there’s a lot of talk about kind of the age demographic that you hit that midlife crisis, so, mm-hmm.
For me, I was go, go, go from perhaps 14 years old when I got my first job, and I was really just interested in success and I defined that to be honest with you, pretty much financially, you know? Mm-hmm. From, from a teenage years to my twenties, that was, I. Success equaled X amount of dollars or income or however you wanted to define it financially.
And I will say luckily I never let that absolutely consume me. I still got married and started having a family, and I’ve always been an, an available dad. But in my late thirties I kind of started checking some of those financial boxes that I always dreamed of checking. X amount of passive income, X amount of investments.
Mm-hmm. X amount of, you know, net worth ideas. I kind of always had in my mind some written down as goals, some just kind of in the back of my mind. Mm-hmm. And you know, the funny thing is, Adam, I. And I had heard this. Mm-hmm. But I didn’t believe it to be true. I had heard from others that were advising me that had been on a similar path and were a little older, a little more sage, that nothing really changes when you check off those boxes or receive those accolades or get to where you always hoped you’d be.
Yeah. And that’s exactly what I experienced. And even worse, I kind of started experiencing that. Those were goals that. Really kind of drove me and were on my mind a lot. Even if I was just driving in my car, I, in my late twenties, I found myself often adding up financially Yeah. What my business was doing and, and what my passive investments were doing and how much that would be next month.
And then I, when I could do the next house investment purchase or whatnot. I was doing that all the time subconsciously. Yeah. And to the point of relatively obsessive. So as I mentioned, I feel like I never quite went off the deep end, but I think I toyed with that fence line of having that take over my younger years of time while, you know, my kids were 2, 3, 4 years old.
Yeah. And so to not have this take up our entire hour, the shorter version is in my later thirties, this is probably seven, eight years ago. Mm-hmm. I’ve also always remained relatively Physically fit and eating well. If, if real estate’s my main business, right? Secondary to that is, is fitness and health and nutrition.
And my wife and I are quite passionate about that. I’ve been. Ranked nationally in the CrossFit world. I’ve been ranked at top hundred Spartan athletes at certain times, and so all this was kind of colliding. I’m successful and that’s busy, man. That’s a lot. That’s a lot of weight. Yeah. I’m, I am by definition.
Successful from a financial standpoint. By definition, I’m successful entrepreneurial, and I’m checking all these boxes. Mm-hmm. And then one day I kind of went and it crept up on me and I went, so what? You know? Wow. For what? Wow. And it was pretty depressing to be honest with you. Yeah. And it wasn’t this just immediate.
And then I went into a funk. It was just kind of into my late thirties. Mm. And not to get. Too hippie on you, but at the time I had no idea about some of the latest discoveries in the medical world that are merging with the neuroscience world and the psychology world that, you know, certain trauma or emotions we feel mm-hmm.
Can really start harboring. Injury or swelling or things in our body. For example, your heart carries anger. Mm-hmm. So if you’re in angered and then you’re, you don’t let that go. And then over time you are kind of constantly angry and then over a decade that’s always with you. Then at some point you adopt it into your personality.
And people say he’s kind of a angry person. Right. So, I started waking up to all this in my late thirties, and really it was my body. There’s a book, the Body Keeps the Score, which really explains this phenomenally, and it was my body that started telling me, not necessarily to slow down, but that I needed to think and look at things a little bit differently and start defining.
What I thought of myself and what I thought of success mm-hmm. Differently, not that I was doing anything wrong, but that over time that was gonna lead to more body ailments and perhaps autoimmune disease. And I was starting to have a lot of joint swelling and things, so my body woke me up. And it wasn’t an easy path and it’s still totally a journey.
And now the more I learn, the less I know. But as I started doing that I’ll tell you some of the fruits of those labors. Mm-hmm. I started, I. Not just being there in evenings as far as time goes and, and being present. Mm-hmm. With my family physically present. Yeah. But I started being emotionally present and really there with my wife and kids.
It’s a higher quality of time too. It’s higher quality of time, not just being there, checking off the, checking off the boxes like you’re actually present. Yep. Started being able to Actually disconnect. I told my wife, I think this was maybe three or four years ago, we were on vacation and you know, she said, look, we’ve been doing vacations and stuff for, for almost 20 years and you know, you’ve always organized and been there and not necessarily the business owner that was just off on his phone all the time.
And, you know, we Disneyland with the kids. I wasn’t on my cell phone all the time. I was physically present. But my mind was kind of always on my to-dos. Wow. And I just thought that was the way you had to live as an entrepreneur. Mm-hmm. So I woke up to all that. It’s not easy especially when your personality is one way or you’ve growing your business.
Yeah. A certain way. But I started getting a healthier work-life balance. And I define healthier, not by. Some checklists I could show you, but literally off of how I think and feel and how my relationships are with others and especially those close to me. Yeah. The mental component of it that, like what, was there anything that helped you, like, on the mental side of it?
’cause, ’cause some people will, you know, myself included, I’ll pick on myself. I, I found myself in that challenge where I’m, I’m, you know, I’m there but I’m not there, right. I’m thinking about, oh, I got something, or a text throws me off or something else and I’m. Is there something that you found that kind of helped on that end of things?
Yeah, there’s two things I could tell you. The, the first is kind of some simple quotes, and I’m gonna, I’m gonna butcher it. And I didn’t, I didn’t come up with it, but I kind of lit by it and it’s I don’t even know who said it, but it’s something like, you know, you’ve gotta fit a sweat. And a smile.
Mm-hmm. And then something self-fulfilling. So self-fulfilling, sweat, smile three S’s mm-hmm. Into your every day. Mm-hmm. And for me, you know, I. Even if I’m out of my fitness routine and traveling or really off my schedule as far as timing goes I don’t have to hit the gym if I’m at a hotel and I don’t guilt trip myself anymore like I used to in my twenties and thirties if I didn’t do everything on my goal list.
Yeah. But I kind of just tell myself, Hey, let’s break a sweat today at some point. Yeah. And then I, you know, I look for opportunities to. Smile or laugh and not not outta requirement. Mm-hmm. You know, really, really laugh at something. Yeah. So I think that’s one thing that helps mentally. And I think that’s universal.
I think if anyone and everyone can break a sweat, whatever your definition of that is. Yeah. And, and get a smile in and then, you know, stay on your purpose and, and. Take little bites at it daily. Something that’s self-fulfilling. Yeah. I think that helps you get over the mental. The second thing is just, there’s tons of books on this, but it’s just much more pragmatic.
And that is, you know, we could, you’s called time blocking. Mm-hmm. Or the organization, the schedule. Yeah. And I’m rather famous for this. I, I was a public speaker for Berkshire Hathaway for nine years. Spoke around the country to Lot of sales folks, mostly real estate sales folks lot of top producing teams.
Yeah. And I have a speech where I would often play my voicemail. Mm-hmm. And if you’ve ever heard my voicemail on my cell phone my recording, it’s relatively facetious and it’s kind of a offensive, to be honest with you. And I’ve had it for like a decade now, so I can’t really change it. I, I, people know me for it, but it says something to the effect of, Hey, you’ve got me.
Hopefully you know why you called me. Please explain that in a swift voicemail or shoot me a text. And for the love, please do not send me a text that call, that says, call me. That would defeat the whole purpose if you can’t define what you need from me in a short voicemail. And, and it kind of goes, goes on and on like that.
Now, a lot of people are starting to do that these days. A lot of people’s voicemails just say, Hi, you’ve reached 8 0 1 and it’s just machine recorded. Yeah. Or it’s just direct to voicemail. That’s become a lot more common, but 10 years ago when I started doing that, it was because of what you just said.
Yeah. I started just going, man, I can’t keep a train of thought to save my life. I’m in cells, my phone number’s all over the place. Yep. And unfortunately, I use my cell phone for most of my advertising, and I can’t be present. I’m constantly interrupted. Yeah. So you either a time block that out and it takes a lot of discipline.
Think of how addicted we are to our phones these days. Yep. You either, a, are so disciplined and time blocked that you and I have friends that are good at this, that you just don’t look at your phone during certain times or it’s off or it’s face down in a meeting. There’s all these methods. Or the longer approach, and I do both these things, but the longer approach is start to start training your sphere of influence about how you communicate.
Now, we can go down a rabbit hole on this, but I’ll just say swiftly that that takes a real sensitive knack and. I have a range of clientele. I have an age demographic of clientele and perhaps leaning more luxury that if they feel like they need to talk to me on a Saturday evening mm-hmm. At 7:30 PM about something they want to get me on the first ring or two.
And I get that. And there are times that I do tailor to that and break what I would prefer my communication norms to be. Mm-hmm. But for the most part, once people start transacting with me, and this is kind of disseminated through my team, they will find that I’m probably not gonna answer my phone at random.
Mm-hmm. You’re gonna have to schedule me to get me. But I’m hyper responsive and swift if you want to reach out to me in another format. Hmm. And yeah, that may not be a lot of small chat and how’s your day? And vice versa. And there’s times for that. We’re doing that now. Yeah. Yeah, yeah. But I’m not gonna do that 30 times a day with everybody that blows up my cell phone.
Yeah. But just let me know what you need and I’ll respond back to you in 30 seconds. Sure. And so Sure. Over time. If you’re, if you’re more in a, a power position or you manage staff and your time’s getting spread thin, I highly advise. Sure. You can time block and do all those things that are in all these books.
Yeah. The other thing you can start doing is the long tell approach of training those that interact with you the most on how you would prefer to communicate and how you are going to be the most responsive to them. Yeah. Without them disrupting your day. Great, great tips and great advice on how to kinda work through and, and that, that work life balance, especially for, you know, entrepreneurs, multiple streams of income, different businesses, different things going on.
Well Jake, you know, you know, I gotta, I have you on the line, so we’re gonna talk some real estate. We gotta talk about what’s going on current in the current environment especially in your geography. So, I mean, just you know, how’s business. Yeah. Business is better than you might assume it is if you’re reading national articles related to the real estate industry.
Yeah. And for context for everybody, this is June 15th, 2023. We’re we’re we’re recording this so in, in today’s en environment. Go ahead. Yeah. Thanks for saying that. And I’m, my location is Salt Lake City, Utah, but really I do have my thumb on kind of the state of Utah. Yeah. And then in speaking around the country, I keep my thumb on other markets, so, So that.
This applies to everybody. I’ll kind of give you a general national state of its state. It’s no doubt about it that the mortgage in industry specifically is struggling just from a profitability standpoint. Yeah. Most of my friends are contacts that own mortgage companies and a couple of my buddies are on the executive teams or have ownership in top 10 mortgage companies around the nation.
Yeah. I’m in touch with the executive team on a personal level. At Quicken Loans, top three national lenders. So I, I feel relatively plugged in. And in layman’s terms, virtually none of them are making money specifically on the production side. Mm-hmm. And there’s a lot of reasons for that we don’t need to dive into.
They’re surviving by, you know, leaning the companies from staff and overhead and all those things. Mm-hmm. And also if they have other ancillary businesses, or especially servicing portfolios they’ve held onto, that’s keeping them afloat. However, Here’s the interesting thing, Adam, if you look at the real estate market holistically and all the other businesses in it, construction and general contractors from trades and labor.
Mm-hmm. Still really strong, still hard to get labor material costs in our market to come down about 20% from peak covid where it was hard to get material. It’s kind of stabilized. So big builders and investors believe in their financials a little more, and they’re willing to dive back into Larger developments or mm-hmm.
Spec larger neighborhoods or even other asset classes, commercial buildings, things like that. Yeah. On the residential side, which is really my expertise, I would define it as going pretty good. Yeah. Sales are still occurring. A lot of real estate agents specifically are kind of, Crying in the blues again, like they did in the Great Recession.
Mm-hmm. But cells are maybe down about 30%, somewhere between 20 and 30 across the country. Pricing, if you wanted, define that by median price of a single family home in my market was down 18% Mm. From last May of 2022 to this winter, January of 2023. But now, Here’s the latest news. In the last 120 days, it’s erased 10% of that 18% decline.
Wow. We’re only 8% off all time peak pricing, even with 7% interest rates. Now other markets are not necessarily following that trend. We have extremely low unemployment, extremely low inventory. We’re huge in migration state in Utah. Mm-hmm. But in, in general, across the nation, there’s this mixed bag of goods.
Okay? Mm-hmm. I gave you that context to tell you this. Now we’re, we’re now transitioning from facts and data and statistics that I just gave you that are real. Yeah. My opinion. Okay. Just for our listeners. So here goes my opinion. I believe that we are in an environment that economists New York Times writers mm-hmm.
Even a lot of experts. Don’t really know what to say or how, how to predict it, because we’ve never seen these factors and the factors are these. Most of the economic factors that would indicate how well real estate is doing are better than expected. If you just look at the data. Yeah. In migration, low unemployment, low inventory, which either increases pricing or at least keeps it stabilized.
Wage income, mm-hmm. Either purchase and mortgage index versus median price or rental rates versus the C P I index for, for pricing. Yeah. All of it’s kind of in check. It’s not great, but it’s not bad. Mm-hmm. You know, foreclosures, there’s, there’s no sign of what we saw leading late 2007 into 2008 that gave us warning signals of the great recession.
Mm-hmm. None of that. Not high inventory, not skyrocketing foreclosures in fact, Nationally, you can track what’s called notice of default. So people who are 30 days late or greater on their mortgages, that’s not it’s not even up in any sort of significant way. Okay. So on the one hand, all these factors look pretty decent.
Hmm. Yet what experts can’t put their thumb on is one, why is inventory still low? Mm-hmm. And two. Mm-hmm. Why aren’t people buying? Well, the, the why aren’t people buying is a pretty easy answer. It’s a tough pill to swallow when you look at interest rates and calculate a payment right now. Yeah. So people get that sticker shock really quick.
Yeah, and that’s an easy to answer question. The harder to answer one is, well, why isn’t there inventory now? Inventory comes from two places. We either build. New inventory and add it to the market, or there’s resell inventory. Mm-hmm. And neither of them are, are, are producing what we need them to produce to have kind of what economists would call an equilibrium, kind of a healthy buyers and sellers market.
Here’s my opinion of why, and it’s what I alluded to that we’ve never seen in the United States or perhaps globally. Mm-hmm. Since the Great Recession. We had a good long decade where, Pretty much everyone that had a mortgage was able to refinance or purchase. Mm-hmm. And get into a high 2% low, 3% something rate.
Okay. And now people have equity ’cause their homes have gone up in value. They could afford to upgrade on paper. Their income, let’s say, has increased over the last decade so they could qualify for more. So it’s not a recessionary environment where, yeah. People can’t qualify. So all these factors are ready to go.
Why aren’t people going from the $800,000 house to upgrading to the 1.2 house? Yeah. Well, because in that example, someone is going up 400,000 in house value. Yeah. And they may have tons of equity and the financial means to do it. Mm-hmm. But if their current $800,000 house has a 600,000 mortgage at 2.75%, their payments probably.
25, 2700 bucks a month. Mm-hmm. Even if they’re paying for most of the upgrade in cash, let’s say they only mortgage another 200,000, so they’re going from a 600 mortgage to 800, but their rate goes from 2 7 5 to 7.25. Yeah. People are doubling or more their payments to look at a slight Upgrade or increase in debt.
Yeah. And that, that’s a hard one to, that’s a hard one to take right there on cashflow, right? Like that’s, that’s tricky, right? So what we are seeing in real estate is, An increase in cash purchase transactions, number one. So that’s still happening, which people are always shocked to hear this. That is about a third of all sales across the United States, not, not even right now, just in general.
Usually about a third of all sales are cash, so that’s still going just as robust as it always has. So that’s kind of holding up the market. And then you’re getting the have to moves the job relocation. Mm. The change in financial situation or family status. Mm-hmm. And those are still occurring. I don’t have any data on what percentage of the overall market that is.
So those two things are kind of holding up the market. Mm-hmm. The term I’m using to describe all this as a deep freeze, I think we’re in an environment that’s so unique that we’ve never seen. That people want to, they can afford to, they’re conscious of it. They, they know what they want for their next house or their forever house.
Yeah. They are a starting couple knows they want to get out of their townhouse. Mm-hmm. But it just doesn’t make financial sense. Yeah. To have that exchange in rate. Yeah. No, well said. And I do think that this, this concept of freeze is gonna be something interesting to watch because, you know, interest rates don’t, don’t seem like they’re going the other way anytime soon.
And this could take quite some time. So, I’m, I’m I’m interested to see how this plays out. Of course I wanna spend as well, while, while I have you on here, you know, we’re gonna talk a little bit about the book. Sure. So, for everybody watching this, by the way we won’t do a deep dive into it. Why?
’cause you can buy a copy of it. We’re gonna have the link to the book is of course in, in the show notes. So you can just click on the link and pick up a copy. But first to highlight the five myths of real estate that everyone falls for. Why this topic? Why now? I have found, and it, it kind of goes with that m b a question we were discussing a bit ago about how internet technology, all these things have really sped up the amount of disruption in the extreme change we’re seeing across many industries and cat’s outta the bag.
That’s old news now. I mean, look what we’ve done to the travel industry and the taxi industry. Yeah. We name all these companies, but a lot of people in real estate have said, Why not real estate yet? Why do we still kind of transact in real estate the way that we did 50 years ago? Title insurance and title companies, 30 days for escrow.
Yeah. Getting a mortgage if you’ve got one in the last decade is still a nightmare. And they really do everything but take your blood type, right? Yeah. And so one of my passions has been taking some of the age old adages. And going, well, we haven’t seen a major disruption to the way it works transactionally yet.
I do believe we’ll see that. But there are quite a few norms that people use all the time that are these just myths, and they’re, they’re not the case anymore. In fact, the first one, We discuss in the book and everybody’s heard it. An age old adage about real estate is location, location, location.
Mm-hmm. Whenever I hear that I, I will say to the person, okay, hold on. Are we talking your primary residence where you’re gonna raise your family? Are we talking investment? What lane are we talking here? Mm. Now that confuses people. But the reason I ask that when they say, oh, I know how real estate works, just pick the best location and you’ll do well usually, yeah.
And I go, well, yeah, everybody would like l a b beachfront, like in your market, right? Yeah. But it’s super expensive. Everybody in my market would want ski and ski out at the nicest ski resort. Yes. Yeah. I mean, it’s not rocket science to pick the best locations. The reality is when it comes to specifics in investment, Those, those best locations rarely have a direct correlation with how well your investment’s gonna go.
Yeah. There was studies done all across New York, Manhattan, and the Bronx over the last couple of decades that I. If you were to buy in what’s called the more kind of blighted areas mm-hmm. Where real estate might be soft and you made kind of a good, timely purchase let’s say you had 2 million bucks to invest.
Mm-hmm. And you could get eight condos in the Bronx at 250,000 a piece in the great recession, say 2010. Or you could have bought a $2 million flat in downtown Manhattan across from Central Park. Mm-hmm. Which one would’ve done better coming out of the recession? Just dollar for dollar. Yeah. And it’s not a, it’s not a slight difference.
It’s, you would’ve done massively better. In fact, almost a hundred percent return better on the eight condos in the Bronx as that neighborhood got re gentrified. Yeah. And coming outta the recession. And for a lot of reasons, not just regentrification. Yeah. But oftentimes the, when real estate rebounds, The lower tier pricing tends to have a faster percentage depreciation than luxury does coming out of a rebound.
So you got eight of those rebounding quicker. And you’d have done a lot better financially now. Hmm. When you’re saying, alright, but for my primary residence, where’s the best schools and what’s the lowest crime rate and all these things. Well, then we can kind of talk. I. Location, location, location. But again, that still doesn’t really work for people the way it used to anymore.
Here, here’s kind of a, a, a predictory example I’ve got we don’t discuss in the book, but I use this as a, as a futuristic example. Hmm. We have always given residential discounts. To properties that kind of abut a freeway intersection. Like who wants an apartment or a condo, like right on a major freeway.
Inter exchange. Yeah. You know, in movies we’re familiar with the train tracks going by and it’s rattling the apartment. Who would want that? So appraisers will typically add a 10%. What’s called functional obsolescence discount because a property is, has something weird about it like that. And so there’s this stigma and kind of that’s standard and investors will apply even a greater discount.
Hey, I’m gonna buy this whole building. Mm-hmm. I should get 30% off from going market rates because it’s above the freeway. Mm-hmm. But think about what could happen in the future. The reason that’s functionally obsolescent is really just because of noise. Hmm. The noise. That’s, that’s it. In fact, if there was no noise, who wouldn’t wanna be close to the freeway?
It’s quicker access for sure. You can get right on, on stuck traffic. I mean, there’s all these benefits, right? So I believe that, I mean, the data’s real. The growth of electric cars and quieter and all this, and diesel’s becoming probably 70, 80% all electric and quiet over the next decade. Wow. That. Freeway frontage, residential real estate will become equal in value to stuff that’s couple blocks in or the better location, location, neighborhoods.
And so it’s a good investment if you kind of predictively enter that market. Yeah. No, that’s great. And I I’m gonna stop there on, on the book because that’s just enough teaser. There’s a whole lot more that that Jake brings out into the book. So he did mention a location, location, location. He’s got another one buying a house.
Traps you the best real estate agents. Wear suits, have long meetings and always return phone calls. These are all myths by the way. So I’m gonna, you, you wanna learn more about these, get the book, the link will be in the show notes, but I do want to talk while we’re on this line as well Jake, about digits.
So you, you kind of alluded obviously, you, you mentioned Salt Lake City. Just tell us more about your firm, Aurora. Yeah. So as we, and especially as I managed for about 13 years, kind of two growth luxury brands, Sotheby’s and Berkshire Hathaway. The way a lot of corporate relocation works across the country is employers.
The large ones will decide that they’re gonna open up a new location or perhaps a new corporate headquarters in a different city. Yeah. And this is often made at an executive level where, you know, employees down the chain have absolutely no say. And what would typically happen if that was official and announced is an HR department or mm-hmm.
Certain companies would then reach out to all employees and say, Hey, look, we’re opening here. We’re gonna move 300 people. You’re in that first 300, and you would go sit down with your HR department head. They would kind of tell you the benefits package you would get from moving. And real estate agents would latch on to these big moves, and it was big corporate business in the eighties to try to land contracts.
Mm-hmm. To be the official real estate company that would help all these people relocate. Some would buy, some would rent, but these were big contracts. Because of that, we birthed. Some middleman relocation companies across the country. There’s still two large ones. I’ll kind of keep their names out ’cause we’re, we’re a, a disruptor competitor to them.
But they would go act as a middleman with HR departments and say, all right, once you announce a move, we come in and we take that job on of explaining to employees what their benefit package is. Yeah. As I worked with these companies at, at two major luxury brands, I started really seeing how. Their responsiveness was quite archaic.
Think about how things work these days, Adam, if, if you all of a sudden found out via email, no longer in person, just an email that you were going from California to Texas and that. You needed to move your family next month. Mm-hmm. Well, you’re probably gonna shoot a text to your wife and then she’s gonna be on Zillow before you’re even home.
Yeah. Looking at places in Texas and looking at schools and looking at crime rates and all these things, this is how fast things go these days. So we found that middleman, relocation companies couldn’t be as responsive and by the time they were actually introducing the relocation package and or inserting.
Agents or realtors. The, the consumer that housewife in that example has already made connections on Zillow and is, you know, trying to look for housing and things like that. So digits philosophy was simply to come in and clean all that up. Mm-hmm. And one of our slogans at Digit is that, We let, we have a logo that’s a kind of a turning wheel, and at the center is the consumer and the cogs of the wheel are all the different ancillary businesses that are gonna help in this move.
Mm-hmm. And we operate as the rotary portion that comes in and keeps that wheel moving down the road and keeps everyone updated. So our philosophy was, Well, all these companies are nowadays working in email and text and C R m management systems and all these types of things. Why don’t we, what’s called via an a p I go plug in.
With everybody’s CRMs and keep everyone updated on the Smith’s families. Move from California to Texas. Yeah. So you know, that was seven years ago. That birthed our idea. It started with doctors and physicians just because here in Utah I had a few local contracts with hospitals that I was the preferred realtor and I wanted a better way to immediately get in touch with people who are moving ’cause it’s very disruptive and they’re nervous, scared.
Especially when it’s a market they may never even have visited, for sure. Yeah. And so we started building out affinity programs to get them deals and make this smoother for them. We started building out websites that would advise them on The quickest ways to get that demographic info they would need about the new market.
Yeah. And then we started building a realtor network and we are brand agnostic, so I’ve got realtors from all different brands, boutique companies to large brands mm-hmm. Across the country. And we started building networks. We’ve just realtors who were responsive. That was kind of the, the main thing we were going after.
Now I’ll say one other differentiator for us. Most of the lead gen in the real estate industry is pretty hostile towards consumers. Hmm. What I mean by that is, and consumers have saed up to this, but mm-hmm. When you’re surfing for housing online and you put your contact information into Zillow, People are gonna laugh.
They hear this, you, you now know how quickly you’re gonna get solicited. Oh, yeah. And, and there’s really no rhyme or reason to it. And your, your contact info’s sold and then resold and then resold and you’re gonna mm-hmm. And, and agents, because they’re large ticket sales typically those that are trained on solicitation processes, they’re pretty good.
Yeah. They’re, you know, so you’re gonna get hounded is how I view it. Yeah. And our philosophy at Digit is the opposite of that. We have that wheel rotating behind the scenes, and we introduce everybody via text and email, and integrate with all the professional companies that are gonna be involved in this move across their C R M systems.
But we don’t have the agent interact with the consumer until the consumer fills out a loan application with the lender. Yeah. And it’s always, always been one of our core philosophies. We want one agent. Who’s going to be the person they’re gonna work with Yeah. When they get to that market, and we want them to interject at the right time.
Mm-hmm. So that birth version one oh a digit seven years ago we’re now on version three Oh. Of the software we, we’ve expanded from just you know hospitals and, and doctors and lenders being our customer to many other ancillary businesses. We’re now starting to work with. Economic development departments.
So we’ve got a contract with Boulder, Colorado a contract with the city of Longmont, Colorado, where municipalities are offering tax incentives to companies to relocate. And that’s where we interject and then say, oh, by the way, here’s your entire Infinity program package, and then we can facilitate.
The move once companies decide they’re gonna relocate. Yeah, it’s a great story. I mean, a great entrepreneurial story and the fact that it’s seven years, I mean, this is really advanced. Like I, I never heard anything like this when going back seven years ago, even now, like I, when I see what you’re doing in a.
Especially that key component of of really until a loan application is filled out, you’re not making that other introduction. Like all these things, especially when somebody’s moving, like, you don’t wanna deal with all this. You just, you want it done. You wanna feel like you’re getting, you know, the, the right people working on your team and you want, you want a system in place.
And that’s, in my opinion, exactly what you’ve you’ve developed. Yeah. And as consumers these days, we all know it. I mean, I’m a consumer too, although I do this for a living, I can put my consumer hat on. And I never answer my phone and I hate being solicited and I hate if my cell phone number went out.
Right. In fact, apple has a setting on one of the latest updates that if they’re not in, if, if the contact is not in your Yeah. Contact list, then it just sends ’em straight to voicemail. I, I turned that on the day, the day it was an option. I, I know I’m being a little facetious here. But I believe, yeah, the industry is going to move in the way that digit has moved and get smarter about how and when, and we have the analytics.
Yeah. We just need to get smarter about how and when we contact people and people do not want to be solicited, especially at odd times. I mean, the eighties, it was the movies that showed the phone ringing while everyone’s at the dinner table. Yeah. Well, nowadays that’s exacerbated thousand fold because it’s just always in our pocket, right?
Mm-hmm. So I am, I am hopeful that the industry will also kind of pick up to these norms and you know, as a consumer, if you catch me, you’re never gonna catch me. But then if you catch me at the exact right time that I’ve got a question about this certain big purchase I’m gonna do or I’ve made a specific step.
Mm-hmm. Towards actually purchasing versus just being a looky-loo. Yeah. Then I probably would be responsive. That’s awesome. Well, Jake first off, it has been great having you back on the show and to catch up. I’m so excited to continue promoting this book with you. I know we’re just, Getting started, we got a bunch more content coming out and, and videos and just other things.
It’s gonna be fun. But that being said for today, if somebody’s, if somebody’s listening to this and they wanna follow up and they wanna connect with you and your team what’s the best way for them to do that? Yeah, thanks. My personal email, which I’m happy to give out based all this combo is just my name, Jake Breen.
That’s B as in boy, r e e n, Jake [email protected]. Simple enough. That goes to all my other business emails, so that’s the quickest one to get me. And I’m happy to answer questions and be responsive in that email address. And then beyond that, if you wanna look into kind of our real estate specifics investments, some of the funds we’ve built I’ve built a, a relatively healthy portfolio here in Utah across all asset classes.
We’ve got ownership in nine buildings with my partners here in our building in Mill Creek. Mm-hmm. You can just go to Utah Cribs. So kind of like the eighties and nineties mtv. Yeah. Utah cribs cr ibs.com. Fantastic. And we’ll definitely put all of that in the show notes so that our audience can just click on the links and head right on over.
And speaking of the audience, if this is your first time with Mission Matters or engaging in an episode, we’re all about bringing on business owners, entrepreneurs and executives, and having them share their mission, the reason behind their mission, and you know, why, why they do what they do and how they’re doing it.
’cause we all wanna grow together. If that’s the type of content that sounds interesting or fun or exciting to you, we welcome you. Hit. That subscribe button. We have many more mission-based individuals coming up on the line and we don’t want you to miss a thing. Jake again, really appreciate you coming back on the show.
Thanks for coming back on. Yeah, sure thing. Thanks for having me.