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How To Succeed In A Competitive Real Estate Brokerage Market with Michael Nourmand

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Manage episode 274872503 series 2799160
İçerik TRIBUS tarafından sağlanmıştır. Bölümler, grafikler ve podcast açıklamaları dahil tüm podcast içeriği doğrudan TRIBUS veya podcast platform ortağı tarafından yüklenir ve sağlanır. Birinin telif hakkıyla korunan çalışmanızı izniniz olmadan kullandığını düşünüyorsanız burada https://tr.player.fm/legal özetlenen süreci takip edebilirsiniz.

Most brokerages never make a generational transition, and according to RealTrends, more than 50% of all brokerages are currently for sale due to this. However, Michael Nournmand, and the Nournmand family, have successfully upended these statistics by running a multi-generational real estate brokerage in Los Angeles - one of the most competitive markets in the US.

TRANSCRIPTION

Eric Stegemann (00:02):

Hi everybody. And welcome to Brokerage Insider the podcast where we interview the leaders in real estate and technology today, I'm very fortunate to be joined by Michael Nourmand. He's the president of Knorr modern associates, an independent real estate brokerage in the LA area. Michael, thanks so much for joining us.

Michael Nourmand (00:22):

Thanks Eric. It's a pleasure to be on a, on the podcast.

Eric Stegemann (00:25):

Great. Well, I'm excited to ask you some questions about the market and how things are going, but first, before we do that, why don't you tell us a little bit about yourself and I know your family history in the, in the real estate business. And tell us a little bit about that and how Norman and associates got started.

Michael Nourmand (00:43):

So I was born and raised in Los Angeles, went to local schools, graduated from USC. I was an undergrad business major, and I always liked being around people. I would say that the people, part of the business, the social aspect was what initially caught my interest. My parents would talk real estate at the table. My siblings thought it was boring. I thought it was interesting. I wanted to kind of know how the deals were going to come together. Even kind of for my apartments, but when I turned 13, the theme of the party was monopoly. So it was definitely something that, yeah, we still like something that, that peaked my interest. And then when I was finishing at USC, I had already gotten my real estate license and had closed a couple of deals. And once I got my first taste, I was hooked and the rest was history.

Eric Stegemann (01:35):

So you started selling real estate to him while you were in college?

Michael Nourmand (01:39):

Yeah, I closed my first deal. I think I was either 20 or 21, but I pretty sure I was 20 when it, when it closed.

Eric Stegemann (01:47):

That's funny. Our histories are almost the identical when it comes to that. I actually started selling real estate in college too, and ended up changing my entire life trajectory to get into the real estate industry. And here I am 20 something years later because I fell in love with the industry after selling it to pay, to go to college. So funny, we have a, a similar start there around the exact same time in our lives. Tell me, tell me a little bit about the company, cause I know it, you know, it's obviously a family business, but tell me a little bit about how many agents you have and we're specifically you're you're located in the LA area.

Michael Nourmand (02:24):

So my dad started the company in 1976. It was one office, probably a little bit bigger than a modern walking closet. And then over the years my mom got in the business in the late eighties and my mom did really, really well. So they grew the, they grew the company to have a second office in Brentwood. So Brentwood is right next to Santa Monica. That's probably the easiest way. It's just East of Santa Monica, city of Santa Monica. And then we opened our third office in Hollywood in 2000 and beginning of 2008. And we've had three offices, about 175 agents on a good year. We'll do we did just, just really close to a billion dollars in sales volume. And you're talking anywhere from maybe 500 to 600 give or take sales transactions a year. So it's a, it it's a family business.

Michael Nourmand (03:28):

It's a boutique. We do a fair amount of high end, but we do a very diverse range of price points and product types. The culture is very warm. It's a very flat environment. I respond to all of my agents, emails, texts. My top agents will get back to other agents at the company, even if they're newer, it's a, it's a really nice place to work and it's a special place. And it's been really nice serving, you know, serving the agents staff and management team. I've been running the day to day since the beginning of 2008.

Eric Stegemann (04:08):

Wow. You took over in an interesting time there to jump in in 2008. So w what was that like to, to jump in and take over and be in the middle of a, of a recession? Like we were back then? Rough, honest answer folks.

Michael Nourmand (04:27):

Yeah, rough. So there was a title rep and he kind of looked at me and he's like, I don't know. I don't you know, I'm not jealous. I'm trying to think of the right way of saying it, but basically he's like, I don't envy your job today. So it was rough, you know, it was rough. The market was, was, was bad, especially kind of the fourth quarter of 2008. And the first quarter of 2009, it was it was really, it was bad. But I did still enjoy the job. It allowed me to gain really valuable experience because up until that point, I had only been in good markets. So now I got to cut my teeth on running the brokerage in a bad market. And as you know, and some of the listeners may know it's a thin margin business. So the difference of doing 10% of business could mean making hundreds of thousands of dollars or losing hundreds of thousands of dollars.

Michael Nourmand (05:26):

It's a very, very, it's a very small thing. So I think that sometimes people don't really look at all of the expenses that go into running a successful well run and competitive brokerage in today's world. So I had a lot of cost cutting to do, and there was a point where I kept adding agents and cutting costs and the losses kept getting worse. But then like everything, you know, we were, we had the financial wherewithal and the commitment, and there were no new companies coming into the market. I mean, it wasn't like, you know, for like 2012 until let's say 2017, 18, there was a new company every year coming into the market with a different, I call it a new company with a new promise, right? Every year there was a new, there was a new company telling you why the model was broken and what they were going to do to sort of solve that issue conveniently.

Michael Nourmand (06:26):

So I got through that and did a lot of cost cutting. And we went, we went over the budget and we went line item by line item. We went from the top to the bottom and we cut every single thing that we thought would not be an issue for our agents to make a living. So things that we could cut that we thought, okay, this isn't going to prevent my agent from doing business. They're still going to run their business more or less the way it is. And things that I thought would affect their, you know, their business, whether, you know, cutting too much staff or cutting too much marketing. We stayed away from, and then by the time 2010 rolls around by the end of 2010, I think we were slightly in the black. So I had 2008 and 2009, my first two years were, were, were losers. And then after that you know, 2010, I got back in the black, and then it kind of all the work that I put in, you know, during the downmarket started to pay off,

Eric Stegemann (07:29):

I, I believe that a wholehearted, the, the, if you look at a lot of tech companies that are out today many of them started in, in bad times and it made them lean and mean as opposed to you know, fat with expenses and use to the, those times when things are so great. And I think, you know, being an, either starting a brokerage, I've said this many times the past, starting a brokerage, or, you know, in your case, taking over a brokerage right in the middle of this there's no better business school. There's no, no class in business school that can do a better job of teaching you how to best run a company than jumping in where you did. So you know, obviously you jump in, you've got this company, you, but you've been selling real estate before that. So, you know, what are the big things you've seen change in that LA market particularly in the markets that you guys specialize in, what are the biggest changes that you've seen in the 20 years that you've been in the business and certainly in the last 12 that you've been running the company?

Michael Nourmand (08:33):

Well, I think you kind of had more of a mom and pop community you know, company, the person who ran the business, their name on the door. And then, and some of this is me just, you know, listening to other people talk. And then you kind of had like the nineties, which was sort of like larger companies, corporate, you know, companies rolling up other companies, companies going out of business, that whole thing. Some of the stuff that's happened in the last let's call it six or seven years has been very positive. So I think that the competition has gotten better. So most agents are more knowledgeable they're they're, they're better than they were. So, you know, if you look at the average agent, you know, five or six years ago, versus the average agent today, I think that the bar has been raised.

Michael Nourmand (09:27):

So I think that that's positive. If you look at the marketing materials, the marketing materials look a lot better across the board. You see social media campaigns, some digital stuff, really elegant print marketing. So that's another positive thing that I think is really, really good. I think that probably the most recent changes that I've seen, one of them has been management. And I think that as the margins have gotten tighter and thinner, you've seen a lot of companies go cheap on management. I think that that's a mistake. You see one manager handling two offices or three offices or one manager handling an office of, you know, 200 plus people. I think that it's a mistake. I think that good management is invaluable. I think that for retention, for recruiting, for staying away from legal issues for keeping your costs down for watching your quote unquote store closely. So I don't subscribe to that. There's a lot of that, you know, I have a competitor, they have, you know, a manager, I don't know what, I don't know what the situation is today, but they had one manager who was managing an office in Malibu and an office in Beverly Hills. There was another competitor where there's a manager, who's managing an office in Brentwood. And I think too in like orange County somewhere. And like, I don't know if it was Irvine or somewhere like an hour's drive away.

Eric Stegemann (11:04):

Yeah. I was just going to say some context for those that don't know, or haven't driven in LA traffic before what he's describing. I mean, this particularly the LA and the orange County ones, it's probably an hour on the four Oh five with zero traffic at 2:00 AM. And it could be because I did the drive from orange County up to Brentwood two or three days a week for quite some time. And that could take two and three hours to, to do that drive during traffic time. So these are, these are not close areas, at least in terms of drive time that that he's mentioned in here folks.

Michael Nourmand (11:40):

So I kind of look at it that they are cutting on some of the services management being one of the, one of the key services in exchange for offering more attractive deals to agents. But I actually look at it that the agent is better off having a less lucrative deal and having more services, because at the end of the day, the expertise that you get from the manager, from having a good transaction person from having good marketing from having somebody who's at the top who runs the organization well, whether that's, you know, bailing you out of a legal issue or helping you secure a listing, all of those things to me are more valuable. I think what has happened is that some of the, you know, new entrance to the business have tried to commoditize things. So their view is, Oh, if you're a successful agent, you're going to be successful wherever you go.

Michael Nourmand (12:36):

So you're just going to run your business. So if we take less money from you, you're better off. But I think that's shortsighted because I think like anything, whether you have a good real estate, whether you have a good, you know, a basketball coach in the NBA, or, you know, you have bill Bellicheck coaching you in football, or you have a really good mentor. I think that most things in this world are so competitive. And there's a very, very thin line between making a dealer losing a deal that looking at the pennies instead of the dollars is a, is, is foolish. So, so I think that those are some of the changes definitely changes that are coming print marketing. There was a reduction in print marketing. I think there's going to be a much more drastic for the reduction in print marketing, moving forward office space.

Michael Nourmand (13:31):

I don't think that this work from home thing is going to be forever, but I do think that the size of office space is going to shrink when you have office space, let's say in Beverly Hills, that starts in the $5 plus a square foot. And, you know, pre COVID was a lot of people were trying to get into six plus dollars, a square foot, you know, 2000 square feet is, you know, 10 grand, 12 grand a month, that's real money. So I do think that you're going to see a contraction of, of office space. There are several real estate companies that are very, very heavy on square footage, even before Kobe, they were very heavy on it. So I wouldn't be surprised if lots of companies, whether they shed, you know, 20 to 30% of office space, maybe even 40%, 50%. I do think there's going to be a big consolidation in office space.

Michael Nourmand (14:27):

Yes. Especially you also have some companies yeah. Were acquired other companies. You have, you know, redundancy and areas and it doesn't make any it doesn't make any funny, natural sense. A wall street will demand it investors, particularly if there's an IPO will demand it. The challenge, as you know, is you don't ever want to pack up your, when you're moving office space, it's a very, very easy time to reevaluate things. So if you're cutting a small amount of office space, you probably don't make the move. But if there's a, you know, if there's a chunk or maybe you need a new build-out or there's a better location or some reason then I think it makes sense to do it.

Eric Stegemann (

  continue reading

54 bölüm

Artwork
iconPaylaş
 
Manage episode 274872503 series 2799160
İçerik TRIBUS tarafından sağlanmıştır. Bölümler, grafikler ve podcast açıklamaları dahil tüm podcast içeriği doğrudan TRIBUS veya podcast platform ortağı tarafından yüklenir ve sağlanır. Birinin telif hakkıyla korunan çalışmanızı izniniz olmadan kullandığını düşünüyorsanız burada https://tr.player.fm/legal özetlenen süreci takip edebilirsiniz.

Most brokerages never make a generational transition, and according to RealTrends, more than 50% of all brokerages are currently for sale due to this. However, Michael Nournmand, and the Nournmand family, have successfully upended these statistics by running a multi-generational real estate brokerage in Los Angeles - one of the most competitive markets in the US.

TRANSCRIPTION

Eric Stegemann (00:02):

Hi everybody. And welcome to Brokerage Insider the podcast where we interview the leaders in real estate and technology today, I'm very fortunate to be joined by Michael Nourmand. He's the president of Knorr modern associates, an independent real estate brokerage in the LA area. Michael, thanks so much for joining us.

Michael Nourmand (00:22):

Thanks Eric. It's a pleasure to be on a, on the podcast.

Eric Stegemann (00:25):

Great. Well, I'm excited to ask you some questions about the market and how things are going, but first, before we do that, why don't you tell us a little bit about yourself and I know your family history in the, in the real estate business. And tell us a little bit about that and how Norman and associates got started.

Michael Nourmand (00:43):

So I was born and raised in Los Angeles, went to local schools, graduated from USC. I was an undergrad business major, and I always liked being around people. I would say that the people, part of the business, the social aspect was what initially caught my interest. My parents would talk real estate at the table. My siblings thought it was boring. I thought it was interesting. I wanted to kind of know how the deals were going to come together. Even kind of for my apartments, but when I turned 13, the theme of the party was monopoly. So it was definitely something that, yeah, we still like something that, that peaked my interest. And then when I was finishing at USC, I had already gotten my real estate license and had closed a couple of deals. And once I got my first taste, I was hooked and the rest was history.

Eric Stegemann (01:35):

So you started selling real estate to him while you were in college?

Michael Nourmand (01:39):

Yeah, I closed my first deal. I think I was either 20 or 21, but I pretty sure I was 20 when it, when it closed.

Eric Stegemann (01:47):

That's funny. Our histories are almost the identical when it comes to that. I actually started selling real estate in college too, and ended up changing my entire life trajectory to get into the real estate industry. And here I am 20 something years later because I fell in love with the industry after selling it to pay, to go to college. So funny, we have a, a similar start there around the exact same time in our lives. Tell me, tell me a little bit about the company, cause I know it, you know, it's obviously a family business, but tell me a little bit about how many agents you have and we're specifically you're you're located in the LA area.

Michael Nourmand (02:24):

So my dad started the company in 1976. It was one office, probably a little bit bigger than a modern walking closet. And then over the years my mom got in the business in the late eighties and my mom did really, really well. So they grew the, they grew the company to have a second office in Brentwood. So Brentwood is right next to Santa Monica. That's probably the easiest way. It's just East of Santa Monica, city of Santa Monica. And then we opened our third office in Hollywood in 2000 and beginning of 2008. And we've had three offices, about 175 agents on a good year. We'll do we did just, just really close to a billion dollars in sales volume. And you're talking anywhere from maybe 500 to 600 give or take sales transactions a year. So it's a, it it's a family business.

Michael Nourmand (03:28):

It's a boutique. We do a fair amount of high end, but we do a very diverse range of price points and product types. The culture is very warm. It's a very flat environment. I respond to all of my agents, emails, texts. My top agents will get back to other agents at the company, even if they're newer, it's a, it's a really nice place to work and it's a special place. And it's been really nice serving, you know, serving the agents staff and management team. I've been running the day to day since the beginning of 2008.

Eric Stegemann (04:08):

Wow. You took over in an interesting time there to jump in in 2008. So w what was that like to, to jump in and take over and be in the middle of a, of a recession? Like we were back then? Rough, honest answer folks.

Michael Nourmand (04:27):

Yeah, rough. So there was a title rep and he kind of looked at me and he's like, I don't know. I don't you know, I'm not jealous. I'm trying to think of the right way of saying it, but basically he's like, I don't envy your job today. So it was rough, you know, it was rough. The market was, was, was bad, especially kind of the fourth quarter of 2008. And the first quarter of 2009, it was it was really, it was bad. But I did still enjoy the job. It allowed me to gain really valuable experience because up until that point, I had only been in good markets. So now I got to cut my teeth on running the brokerage in a bad market. And as you know, and some of the listeners may know it's a thin margin business. So the difference of doing 10% of business could mean making hundreds of thousands of dollars or losing hundreds of thousands of dollars.

Michael Nourmand (05:26):

It's a very, very, it's a very small thing. So I think that sometimes people don't really look at all of the expenses that go into running a successful well run and competitive brokerage in today's world. So I had a lot of cost cutting to do, and there was a point where I kept adding agents and cutting costs and the losses kept getting worse. But then like everything, you know, we were, we had the financial wherewithal and the commitment, and there were no new companies coming into the market. I mean, it wasn't like, you know, for like 2012 until let's say 2017, 18, there was a new company every year coming into the market with a different, I call it a new company with a new promise, right? Every year there was a new, there was a new company telling you why the model was broken and what they were going to do to sort of solve that issue conveniently.

Michael Nourmand (06:26):

So I got through that and did a lot of cost cutting. And we went, we went over the budget and we went line item by line item. We went from the top to the bottom and we cut every single thing that we thought would not be an issue for our agents to make a living. So things that we could cut that we thought, okay, this isn't going to prevent my agent from doing business. They're still going to run their business more or less the way it is. And things that I thought would affect their, you know, their business, whether, you know, cutting too much staff or cutting too much marketing. We stayed away from, and then by the time 2010 rolls around by the end of 2010, I think we were slightly in the black. So I had 2008 and 2009, my first two years were, were, were losers. And then after that you know, 2010, I got back in the black, and then it kind of all the work that I put in, you know, during the downmarket started to pay off,

Eric Stegemann (07:29):

I, I believe that a wholehearted, the, the, if you look at a lot of tech companies that are out today many of them started in, in bad times and it made them lean and mean as opposed to you know, fat with expenses and use to the, those times when things are so great. And I think, you know, being an, either starting a brokerage, I've said this many times the past, starting a brokerage, or, you know, in your case, taking over a brokerage right in the middle of this there's no better business school. There's no, no class in business school that can do a better job of teaching you how to best run a company than jumping in where you did. So you know, obviously you jump in, you've got this company, you, but you've been selling real estate before that. So, you know, what are the big things you've seen change in that LA market particularly in the markets that you guys specialize in, what are the biggest changes that you've seen in the 20 years that you've been in the business and certainly in the last 12 that you've been running the company?

Michael Nourmand (08:33):

Well, I think you kind of had more of a mom and pop community you know, company, the person who ran the business, their name on the door. And then, and some of this is me just, you know, listening to other people talk. And then you kind of had like the nineties, which was sort of like larger companies, corporate, you know, companies rolling up other companies, companies going out of business, that whole thing. Some of the stuff that's happened in the last let's call it six or seven years has been very positive. So I think that the competition has gotten better. So most agents are more knowledgeable they're they're, they're better than they were. So, you know, if you look at the average agent, you know, five or six years ago, versus the average agent today, I think that the bar has been raised.

Michael Nourmand (09:27):

So I think that that's positive. If you look at the marketing materials, the marketing materials look a lot better across the board. You see social media campaigns, some digital stuff, really elegant print marketing. So that's another positive thing that I think is really, really good. I think that probably the most recent changes that I've seen, one of them has been management. And I think that as the margins have gotten tighter and thinner, you've seen a lot of companies go cheap on management. I think that that's a mistake. You see one manager handling two offices or three offices or one manager handling an office of, you know, 200 plus people. I think that it's a mistake. I think that good management is invaluable. I think that for retention, for recruiting, for staying away from legal issues for keeping your costs down for watching your quote unquote store closely. So I don't subscribe to that. There's a lot of that, you know, I have a competitor, they have, you know, a manager, I don't know what, I don't know what the situation is today, but they had one manager who was managing an office in Malibu and an office in Beverly Hills. There was another competitor where there's a manager, who's managing an office in Brentwood. And I think too in like orange County somewhere. And like, I don't know if it was Irvine or somewhere like an hour's drive away.

Eric Stegemann (11:04):

Yeah. I was just going to say some context for those that don't know, or haven't driven in LA traffic before what he's describing. I mean, this particularly the LA and the orange County ones, it's probably an hour on the four Oh five with zero traffic at 2:00 AM. And it could be because I did the drive from orange County up to Brentwood two or three days a week for quite some time. And that could take two and three hours to, to do that drive during traffic time. So these are, these are not close areas, at least in terms of drive time that that he's mentioned in here folks.

Michael Nourmand (11:40):

So I kind of look at it that they are cutting on some of the services management being one of the, one of the key services in exchange for offering more attractive deals to agents. But I actually look at it that the agent is better off having a less lucrative deal and having more services, because at the end of the day, the expertise that you get from the manager, from having a good transaction person from having good marketing from having somebody who's at the top who runs the organization well, whether that's, you know, bailing you out of a legal issue or helping you secure a listing, all of those things to me are more valuable. I think what has happened is that some of the, you know, new entrance to the business have tried to commoditize things. So their view is, Oh, if you're a successful agent, you're going to be successful wherever you go.

Michael Nourmand (12:36):

So you're just going to run your business. So if we take less money from you, you're better off. But I think that's shortsighted because I think like anything, whether you have a good real estate, whether you have a good, you know, a basketball coach in the NBA, or, you know, you have bill Bellicheck coaching you in football, or you have a really good mentor. I think that most things in this world are so competitive. And there's a very, very thin line between making a dealer losing a deal that looking at the pennies instead of the dollars is a, is, is foolish. So, so I think that those are some of the changes definitely changes that are coming print marketing. There was a reduction in print marketing. I think there's going to be a much more drastic for the reduction in print marketing, moving forward office space.

Michael Nourmand (13:31):

I don't think that this work from home thing is going to be forever, but I do think that the size of office space is going to shrink when you have office space, let's say in Beverly Hills, that starts in the $5 plus a square foot. And, you know, pre COVID was a lot of people were trying to get into six plus dollars, a square foot, you know, 2000 square feet is, you know, 10 grand, 12 grand a month, that's real money. So I do think that you're going to see a contraction of, of office space. There are several real estate companies that are very, very heavy on square footage, even before Kobe, they were very heavy on it. So I wouldn't be surprised if lots of companies, whether they shed, you know, 20 to 30% of office space, maybe even 40%, 50%. I do think there's going to be a big consolidation in office space.

Michael Nourmand (14:27):

Yes. Especially you also have some companies yeah. Were acquired other companies. You have, you know, redundancy and areas and it doesn't make any it doesn't make any funny, natural sense. A wall street will demand it investors, particularly if there's an IPO will demand it. The challenge, as you know, is you don't ever want to pack up your, when you're moving office space, it's a very, very easy time to reevaluate things. So if you're cutting a small amount of office space, you probably don't make the move. But if there's a, you know, if there's a chunk or maybe you need a new build-out or there's a better location or some reason then I think it makes sense to do it.

Eric Stegemann (

  continue reading

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