Rick Hale got his start in real estate in 1996 with a simple goal to sell a few houses and make a living. After his first year, he earned six figures, and after doubling his business by year four, he opened the very first Keller Williams office in Atlanta, GA.
Today, Rick is the operating partner of 12 Keller Williams offices that closed on 12,000 homes in the Atlanta metro area last year. He is preparing to publish his first book and has recently taken on the new title of Chief Energy and Education Officer.
In this episode, Rick shares the challenges he’s faced with finding the right people to help scale his business, the mindset shift that enabled him to prioritize and value his time, and the best practices he personally employs to remain focused, energized, and positive.
Rick Hale | Real Estate Background
- Opened the first Keller Williams office in Atlanta and now owns 12 brokerages. He is also an author and a limited partner on several commercial deals.
- Based in: Atlanta, GA
- Say hi to him at:
- Email: rick@rickhale.com
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TRANSCRIPT
Ash Patel: Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I'm Ash Patel, and I'm with today's guest, Rick Hale. Rick is joining us from Atlanta, Georgia. He has been in the real estate business for over 25 years, and was responsible for opening the first Keller Williams office in Atlanta. He now owns about a dozen brokerages. Rick is also an author, and owns a number of commercial properties, and is an LP investor. Rick, thank you so much for joining us, and how are you today?
Rick Hale: Couldn't be better. Thanks for having me.
Ash Patel: It's our pleasure to have you. Rick, before we get started, can you give the Best Ever listeners a little bit more about your background, and what you're focused on now?
Rick Hale: Yeah, so my start was in real estate in 1996. With a baby on the way and building a house, I realized that my corporate job wasn't going to take me to the financial fruits that I was after and the life experience I was after. So I went into real estate with a pie in the sky hope that I could sell a few houses and make a living, and it turned out to be an amazing decision at the age of 30. In the 1st year I landed in six figures, and the second and third year I doubled my business. And after four years, a really close friend of mine came to me and said, "Hey, this company is coming from Texas to Atlanta", and that's where Keller Williams entered the picture. He and I invested with about 10 or so others, and opened the very first office in Atlanta, a year after watching him launch an amazing brokerage and attract 100 people inside of a year, which is unheard of in the brokerage world, and especially a new brand and a new name in Atlanta, up against some 100-year=old companies.
I got excited in the bug for brokerage training, consulting, and decided that it was really my calling to lead, and promptly opened another office in 2001 and 2003 and 2005. And then the market shifted and I was able to acquire three offices over the next three years, and invest in about four or five more along the way, with other operators.
So that kind of fast-forwards to my role as the operating partner of those offices. The last year we closed 12,000 homes in the metropolitan Atlanta area for $3.4 billion in volume. So a pretty robust organization, that I'm proud of. I replaced myself in my role, and am now, as you noted, about to publish my first book, and kind of repurposing my energy around the things I know and love, which is training, consulting, and my new title is chief energy and education officer. That was a mouthful...
Ash Patel: I love it. Yeah, back when you started, were you on paper listings? Or was it online?
Rick Hale: There was no online, are you kidding me? We got books with thumbnail black and whites of the front of a house, and about a two-sentence description and a phone number to call. Back then, if you made a call, it cost you about a buck a minute, because cellular was not flat rate. So you were very cautious in who and when you called people. We were borderline the last era of carbon paper and floppy disks.
Ash Patel: Yeah, I remember those days. My mom was a realtor growing up, and we would help her get her MLS books all set up... And man, I don't think a lot of people know that, but paper listings were a real thing before Zillow.
Rick Hale: They were a real thing. Word of mouth mattered. Who you knew was almost as important as what you knew back then.
Ash Patel: Yeah. So Rick, we're recording this early September of 2020. Atlanta has been on fire. What are you seeing now, with interest rates going up and headlines talking about downturns in the economy, interest rates, pressures on jobs...? What's going on in your market?
Rick Hale: Well, all those factors are valid and true. And for a long time, I'd say for the last 24 months really, we've experienced explosive demand and limited supply. So it's not uncommon for offers to come in 10%, 15%, 20% over asking, non-contingent, no inspection, no appraisal; all cash is king. And what I'm seeing today - and that's been the case with multiple offers, just about on every property that's desirable/in a desirable area, what I'm seeing now is that instead of taking hours, they're taking days and weeks... But I will say our demand is still strong, and we [unintelligible 00:04:50.22] our seller's market easier to describe, as - if you can sell your property inside of five months. So we're still inside of 30 days to liquidate a property, and two thirds of all houses listed sell.
So I'd say it's still a robust market. It's really just normalizing. The real question is what's the long tail look like relative to the narrative and the real impact of inflation and interest rates. But people with money seem to still have money, and the good news is where in 2008-2010 we were impacted by some lending practices that backfired, I don't see that showing up. And most people have equity in their home, so the foreclosure rate, although it's climbing slightly, it's still at or below 1% in most markets and non impactful. The triggers that I think are going to cause real problems don't seem to be obvious and as strong as they were back the last shift. But we're shifting, there's no way around it.
Ash Patel: We're shifting... And where are we going to end up?
Rick Hale: That's a good question. I don't think anyone's crystal ball fully knows; it depends on the extent and timing. A typical recession is 12 to 18 months. Many have said we've been in this already for six months. So if we can clear the air in a year and see a 5%-10% drop in pricing, I think that'll be the extent of it, and then we're back to racing. So I don't foresee a big, massive issue here locally, but Atlanta's kind of unique in that we are magnetic to a lot of North-Eastern companies, and people moving South... We've got a lot of immigration, and when 80,000 people a year decide to move to your city, it's going to tip the scales of supply and demand in just about any economy.
Ash Patel: Yeah, you guys have a great thing going down there.
Rick Hale: We do.
Ash Patel: In terms of being an LP investor, being a passive investor in other people's deals, what do you have going on?
Rick Hale: So there's about four people in particular that I'm fond of. And the first thing I look for is the jockey - who's running it, how are they managing it? The second thing is the deal itself, and that's largely driven by the mechanics and the economics, as well as the location, the upside potential, school systems... The traditional typical stuff you look at when investing in rental property. I try to diversify, so I've got a couple outside of Atlanta, but a lot of what I do I keep local, so that I kind of have my eye on it and I know the market better than I would [unintelligible 00:07:09.00] The numbers just made sense, and everything lined up, and I believed in the jockey. So return's important too, but I'm a long-term thinker and a long-term investor; whether it's 7% or 8% pref, it's not going to change my lifestyle. It's really about the long game.
Ash Patel: What types of investments are these? Are they single-families, multifamilies?
Rick Hale: They are mostly multifamily apartments. Occasionally, there's some medical or commercial. There's even been a couple lease deals with long-term tenants, like Zach Spees, who are well heeled and grounded here. I'm in one deal there that's [unintelligible 00:07:42.11] 9%... Because you know, you buy long-term lease, the tenant's viable... You know the mechanics of the deal in advance.
Ash Patel: Why not take down some of those deals yourself? You've seen these for years. Have you not been tempted to go into multifamily or commercial?
Rick Hale: Here's the thing - I stick to what I really know, and where I put my time and energy, and I invest with people that I know and trust when it comes to my passive investments. And I'm not looking for another job. My brokerage role - massive role, with 2,500 agents... Pretty consuming. All that to say - it doesn't preclude the idea of going forward at this stage where, again, I've repurposed my role, and I've replaced myself in my active duties. That said, I do own part of -- and I tend to have the attitude, by the way, that I'd rather have a smaller piece of a bigger pie. So some of these projects are really multi, multi, multi-million. It's just easy to jump on board with people you trust, but even when I make investments, I bring along the key people in my organization that I want to reward and help inspire, motivate and educate around wealth-building and asset class diversity.
So I've got five commercial buildings now that are between 8k and 15k, 16k feet, and we owner-occupy 75% of all of them with our brokerages. And I know that tenant's good for it, because it's me. So we're leveraging all the things you do locally, but it's an incredibly safe play, because I'm [unintelligible 00:09:04.10] win/win scenario for both the brokerage and our investor team.
Ash Patel: Are those standalone buildings?
Rick Hale: Typically they are, yes. They are. In fact, all of them are at this point.
Ash Patel: Have you considered just signing a long-term lease and selling them, and cashing out?
Rick Hale: It's too early in the game. I don't see any reason to. Most of those we're scripting well into double-digit returns. The cash on cash is somewhere in the 10% to 15%, sometimes as high as 20%, depending on how well we do with the acquisition and the renovation. So it's just too good. I could, but I don't see any purpose, given that it's -- again, it's cash-flowing, we take advantage of cost segregation... And I control the experience for my brokerage too, by being the primary operating partner of the investing [unintelligible 00:09:45.09]
Ash Patel: Got it. So you've scaled an incredible business over a pretty short amount of time. What were some of the challenges that you hit scaling?
Rick Hale: It's always about people. If you've got a great model, and you've got great role models, and you're emulating best practices every day, it's just the person pushing the buttons and pulling the levers. And when you have the right personality, the right culture, the right energy, and the right magnet, things just go well.
So when I look back into the success I've had, if you said, "What's the one thing I can point at?", it's usually the right operator on-site, locally, when, again, with eight locations spread out in our state, I can't be everywhere at all times. The people make the party; the right people know how to get things done, and are resilient, and determined, and loyal. So we have a really extensive process for hiring. That's a whole other conversation. But even then, occasionally, someone slips in, and I recognize a mistake, and I have to make changes. But number one way to scale is hire the right people who help scale forward with you.
Ash Patel: What's one of the hardest lessons you've learned in real estate, whether it's about people, or deals?
Rick Hale: The hiring process, since we're talking about, is allowing compensating factors to impact my decision-making. For instance, if you come to me looking to be a recruiter, and on your resume it says that you're masterful at writing code, and websites, and internet lead generation, or some other ancillary thing that would be great to have on the ,team that we don't have an isolated role for, I make a decision based on some ancillary gifts. So that was a huge lesson. There are no compensating factors; you're either a fit for the company, culturally and capacity and ability, or you're not. And that's a big lesson.
And then on the real estate side, it kind of goes back to picking your partners wisely. I got involved in a deal right before the crash in 2006. We bought up some land, and six houses, and it turned into a nightmare. And we ended up a $2 million judgment, basically. And so you asked lessons - there was some subtle fine print. I co-signed on a loan for him, we were into it probably, I guess it was about a million, a million six, and I co-signed... So there was some subtle language called "jointly and severably", and I was only a third partner, but when things went wrong and my partner decided to strategically default, which was a common strategy in 2009 and 10, and give it back to the bank, essentially, because it was drowning all of us, this jointly and severably piece came back to really bite me, and I was on the hook after it went to court for a judgment for the entire $2.1 million claim.
So that was a pretty sketchy season financially, but I will say, the lesson out of that - by the way, I helped them sell the property to a future developer who today put 15 houses on those lots and has just killed it. Timing is everything. But the lesson was to always stand up and own your mistakes. I walked into the bank the day that the judgment was served and formally apologized personally, and we navigated what it would look like for a successful exit and a soft landing for me, and it ended up costing me -- I probably lost half million bucks, and $100,000 check at the end of the rainbow. But it was the greatest money I've ever spent in terms of feeling free and capable again... But also, again, honoring commitments.
Ash Patel: Yeah, that's a tough lesson. It could have been a lot worse as well. So in that scenario, did they just go after the deepest pockets?
Rick Hale: They went after all of us, hoping somebody would choke out, to be honest. And my partners were a little better at moving assets around. I'd unfortunately gone through a personal change, and I didn't have -- not that I would anyway; I feel like when you make commitments, again, you own your commitments; sometimes you have to negotiate difficult situations, and that was one of them.
Break: [00:13:38.17] to [00:15:32.17]
Ash Patel: Earlier, Rick, you mentioned energy. So at some point throughout this career, you realize your time is the most valuable thing that you have. What's this mindset shift that you went through?
Rick Hale: You know, it's funny - it goes back... I can point to a number of things that were eye-opening. But I think the realization of that 80/20 rule; I'm sure you're familiar with Pareto's rule, that 20% of what most of us do creates 80% of the return. And it started with the economist, I think he was Italian, in the 1670s, '80s. I mean, this is way back; he realized that of all the wealth in his village, 80% of it resided in 20% of the population. And what we've kind of discovered over time is that applies to just about everything.
So in my world, I realized that if I recognize the highest priorities and the most important components in success, or for the next level to leveling up, and I focus on that, everything else is almost irrelevant. So what we often do is create these massive checklists of opportunities... And I'd say opportunities are things you could do, but they're not always things you should do. And it feels good to check things off, but if you're not paying attention to the big rocks first, you'll never get to them, and you'll never scale, and you'll never really expose the brilliance and the genius you have.
So my job as a leader is to live by that, but also hold my leaders around me accountable to paying attention to the big rocks, and then outsource, subcontract... There are other people out there that can do it for a lower dollar per hour.
Ash Patel: What's an example of somebody just so focused and inundated, where you had to pull them out and realign them?
Rick Hale: People often, again, address the loudest person or the hottest fire, the closest, but it may not be the most important thing. Getting caught up in the weeds is one way to look at it, and people kind of understand that analogy, where you can't see past your immediate situation. And in our world, we deal with contentious situations, lawsuits... It's inevitable. If you do 12,000 sales, someone's going to wake up upset, and someone's going to have a brother, a sister, a cousin who's an attorney, or [unintelligible 00:17:36.04] split the difference. "You've got a case, give us a go." And it can consume your energy and drain your life force. So that's an example where "Who can we give that project to?", so you stay focused on inspiring the people that are actually going and growing, and also attracting people who are going and growing... Because another lesson is that amazing people attract amazing people, and you have to be careful to not contaminate your pond by allowing everyone to swim in it.
Ash Patel: That's a great mindset. Are there any best practices that you personally employ to keep yourself focused, keep your energy level up, and be in a positive mood to inspire others?
Rick Hale: It's funny, if you really want to master something, go teach it, Ash. So a lot of what I do is I teach, and I share, and your subconscious brain is listening to everything you say, and it's looking for connections, and looking for synergy and symmetry. So the definition of integrity, in my opinion, is when your inside voice and your outside voice are aligned. But sometimes your inside voices, that voice of -- there was a term called the drunk monkey, or the monkey mind... That says "You shouldn't, you can't, you don't deserve it..." So sometimes the way to outrun that is to create a path of evidence, and simply by -- taking action is number one. Anytime you take action, you create an energy that goes back into your brain to go, "Hey, we're on this path now", especially if it's positive action. That was an assumption. But by also voicing your opinion, most people want to be in that integrity state, and they tend to behave differently when they're coaching someone, consulting somebody, supporting someone else; there's a real boost. So I think that's part of it.
I shoot a weekly podcast called Mojo Monday, and it's only 15 minutes long, it's with my business partner, Brett Caldwell. We pick a topic, we talk about key books that have impacted our lives... As little as 10 or 15 minutes a day. I think you can kind of energize and level up of how you see the world and how you see yourself in it. And it's not big things, it's little things.
Another thing I'm a big fan of is Hal Elrod's Miracle Morning series. I don't know if your listeners are familiar, but if you've not heard of Hal, he's a great author; he tells a tremendous story. But he's got six steps; he has everything to do from describing, and affirmations, to visualizations, to exercise and health, what you eat is who you are... If you don't feel great, you're not going to behave your optimal best. So every morning I try to set the stage, if you will, for a successful day. And it's that whole structure equals freedom thing, which - I'm not a naturally structured person; this conversation, people are probably like, "That guy is so freakin A-game. Like, he kills it. You know, 20% only, he never does the 80%. He outsources everything." And the truth is I wake up every day like everyone else, with chaos around, and then I consciously choose my energy, and I consciously do the things that fuel me, and fuel my purpose, so that then it gives me that tailwind. And then I have to pick up the pieces and start over, like everybody.
Ash Patel: Yeah, great perspective. Do you ever plan out your day the night before? Or is it always in the morning?
Rick Hale: No, I always try to script my day before. Because if I don't, I don't sleep well. Literally, my brain never stops thinking. So if I can kind of outline my 20%, get really clear on the big rocks, and then who I need to connect with, not necessarily what I need to do, because it's usually a good question... I sleep like a baby knowing that. I jump out of my bed, do my [unintelligible 00:21:01.17]
Ash Patel: Got it. What inspired you to write a book?
Rick Hale: Simply a traumatic story growing up, man. I kind of bounced around quite a bit. I went to 10 schools in 12 years, and my parents were married, remarried and divorced... And I lived with countless people that even weren't family; I was honestly a day from going to a children's home when I was 16. I didn't have a place to go. And the irony in that is that where most people would be like, "Oh, that's terrible", what I'd like the world to pay more attention to is what the gift is, what's the lesson. How can you take that trauma and make it a victory? Does it arm you for the next opportunity, not to fail the way you did? Does it arm you in a deeper sense of understanding that when someone around you that matters, that's really important to you, if they've got a situational issue, did you have the capacity and bandwidth to help them because you've had an experience that was aligned, that gives you a little more, I guess authentic energy behind your help?
So I've had so many circumstances that on the outside looking in look like trauma and tragedy, that were really the greatest gifts ever, and were part of the story. And also, I'd like to think that we all live a life worth living, that has this perpetual energy, and that future generations benefit from our limited time on this planet. So by scripting a story worth telling, and then actually telling it, my kids' kids kids will one day hear it from me, and not necessarily three generations of distorted truth.
Ash Patel: That's incredible. What's the name of the book first?
Rick Hale: Stop Settling. The premise is simple - how to live a regret-free life. And the way I've found -- the most powerful tool that I've ever, ever, ever found goes back to 2000. In fact, about the time I invested in my first Keller Williams office; we were given a class, it was a workshop on how to hire effectively. It talked about the importance of who, and having the right people in your camp and tribe. But the last section is you analyze where they want to be in five years. And the gift in that conversation isn't just financial and career, but also self-development, family, romance, travel, adventure, health... Where does all of that need to be that in five years, when you stop, and you turn around and look back, you can profess with great pride and excitement "My life is awesome."
And I've learned [00:23:17.23] the retention question, "How do you retain talent?" I think it's understanding the holistic person that you're in relationship with at work, and supporting them as a whole. And that's not just how do you click off the metrics [unintelligible 00:23:29.05] good job at work. So those things, I think, add fuel to the relationship, and also give me the ability to be a more important part of their life, that hopefully they don't want to live without.
So that underbelly of the book, actually - so I tell these stories, and then I talk about how if I limited myself to one year goals, I find that people often repeat those experiences; they set big goals, they spend 10 or 11 months, and then they kind of give up in December and declare "Holidays." And then they reset and start over. And people really underestimate what they can do in five, and they vastly overestimate one and. And it's a defeating fight sometimes, when you don't have your lens wide enough to see yourself five years from now.
So inside the book not only are the stories and the silver linings that go with hopefully allowing me to connect with people in a real, honest, open way, but there's actually practical steps and strategies for how to craft a perfect [unintelligible 00:24:22.29] five years from now.
Ash Patel: I love it. I'm adding that to my list. I'm excited to read that.
Rick Hale: Awesome.
Ash Patel: What is your best real estate investing advice ever?
Rick Hale: Do it. I think real estate's the greatest place to park money on the planet. They're not making more of it. And the best time to buy real estate is now, and any time in the past. Unless you were forced to sell because of circumstances and timing, you can look at the 100-year trendline and see that real estate goes up and it goes down, but it's not nearly as volatile as some other investments. And there's half a dozen other benefits, both tax, and experiential...
Without going deep, my best advice is buy real estate, and my second-best is create enough passive wealth and income that if times dip, and we face a shift, you're not in a forced fire sale. Because if you hold out and wait long enough, it'll be back.
Ash Patel: Great advice. Rick, are you ready for the Best Ever lightning round?
Rick Hale: Sure, let's fire away. Come on.
Ash Patel: Alright, what's the Best Ever book you've recently read?
Rick Hale: Probably Atomic Habits, James Clear. First you choose habits, and then your habits become you. So - a great book.
Ash Patel: Rick, what's the Best Ever way you like to give back?
Rick Hale: I'm fond of helping kids [unintelligible 00:25:39.22] So my favorite is -- I not only write checks, but I try to engage and help philanthropic leaders lead better. The last half of that is exposure to my network. I think we've all heard the term "Your network is your net worth." So my goal is to continue to grow around powerful, high-minded people, and then expose them to opportunities that really are difference makers in the world.
Ash Patel: And Rick, how can the Best Ever listeners reach out to you?
Rick Hale: [unintelligible 00:26:05.06] So my name, my first name and my whole name is my email address. That's probably the easiest way, without publishing my phone number. But if you google "Rick Hale Atlanta real estate", you'll find it. We're pretty social and expose people in the real estate industry.
Ash Patel: And one more time, the name of that book.
Rick Hale: Stop Settling: Your Guide to a Purposeful and Regret-free Life."
Ash Patel: And it's out now, right?
Rick Hale: It's not out. So hang tight, it will be out. It's been written and it's done. We've gotten final graphic stages, and then production, and if I have to hear the words "supply chain" one more time... [laughter] But I'm waiting on the production.
Ash Patel: Awesome, Rick. Thank you so much for a great conversation. You started this real estate adventure back in 1996. You've grown a dozen Keller Williams brokerages, learned a lot of hard lessons, and you've taught us a lot about keeping the right people around you... And thanks for sharing your entire story with us today.
Rick Hale: It's been an absolute pleasure. Thank you.
Ash Patel: Best Ever listeners, thank you so much for joining us. If you enjoyed this episode, please leave us a five star review. Share this episode with somebody you think can benefit from it. Also, follow, subscribe and have a Best Ever day.
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