How Real Estate Investors Can Protect the Industry Before Regulators Step In

Rick Delgiorno (00:00)
Yeah, well, the first thing I’m going to say is we need to, as a voice, come up with that. We have to control. So I’m going to kind of bury off your question a little bit. We need to, as this industry, need to have a voice because at the end of the day, look at South Carolina, look at Pennsylvania, look at some of the other places, they make these rules and regs. And we had no voice in the matter. Nothing. We had no representation. And that just irks me to no end. So we need to have an accreditation.

Dylan Silver (01:59)
Hey folks, welcome back to the show. Today’s guest, Rick Delgiorno is a bestselling author, entrepreneur, and leadership strategist with more than 30 years of experience building operational systems and scaling organizations across higher education, addiction treatment, and real estate investing. Through nearest.org and multiple business ventures, he focuses on leadership, operational excellence, investment freedom, and building ecosystems that help entrepreneurs and investors grow sustainably. Rick.

Thanks for taking the time today.

Rick Delgiorno (02:29)
It’s great to be here. Thanks for having me.

Dylan Silver (02:31)
Now you have experience across multiple different businesses and segments of the real estate space. What principles have you seen that consistently separate organizations that thrive from those that slowly break down?

Rick Delgiorno (02:46)
Yeah, it’s a great question. And the answer is simply this, systems and processes. It’s often overused, sometimes as a cliche, whether you’re a one person or a million person shop. Systems and processes define exactly what you ought to be doing and how you should be doing it. So you need to have a plan. So I was just in a podcast recently, we talked about this. And that is, think of your world.

your business journey as a flight plan. So imagine for a minute you get an airplane. Yeah, you can fly around and you’re going to see things, you’re going to experience things, but there is no end destination. You don’t know to go to point A, to get to point B, to get to point C. So if you don’t have that plan in place, what you do run the risk of is I might run out of gas, I might hit some turbulence, I might run into bad weather. So the same thing is going to happen in our world.

no matter if you’re a service provider or you’re a real estate investor. Again, if you’re one person or you’re a million people. At the end of the day, you have to have the system and process in place. So let’s go back to the airplane. You get in the aircraft. Before you get in the aircraft, make sure the wings work and make sure the ailerons are working, make sure landing gear, make sure the oil is good. So you do a pre-check. Okay. And once you get up, you file a flight plan with those that want to make sure that you’re going to get to where you’re going to be safely. So if I’m flying down to you in Dallas,

I’m going to go from Lancaster to or Harrisburg or Philly to we’ll say Indiana, Indiana do some fuel check, whatever, get down. So there’s checks along the way. So you get there safely. Same thing applies to business. If you don’t have systems and processes in place, you have no way to check to see how your progress is. And you got to remember in our world, and I often use this with my clients, our world, you have 52 chances to get it right. In some cases,

I that’s why I say fit two chances weekly. So a lot of mistakes that my clients make is, I’ll check in 90 days. That’s it. You already got a quarter of your business going. So you gotta check weekly. So you gotta do a pulse check every week to make sure that you’re on track. And in my role as an operations person or consultant for a lot of businesses, in this case, real estate investment businesses, I do that daily. So I can bring that to leadership and say, we gotta make a…

We got to make an awareness moment, and then from there we got to make some checks. So that’s really what the secret is. The people that separates those that fragment to those that do well is they have a plan in place, they take action on that plan, and those action items have markers or benchmarks that you have to follow. And if you don’t and you’re getting off course, you just quickly make that adjustment.

If not, you’re just going to be flying around the US and you don’t know where you’re to

Dylan Silver (06:14)
You know, one of the things that I’ve seen, especially with real estate operators who are smaller in size and scaling, is that there tends to be this cowboy mentality that is often works very well for them as they’re growing. But then you get to a certain point, you do need systems and processes in place. How can someone who’s got that cowboy mentality adjust? Do they need to bring on someone else to match what they’re doing or can that

Rick Delgiorno (06:26)
.

Dylan Silver (06:42)
type of style of leadership be adjusted to account for systems and processes.

Rick Delgiorno (06:47)
Yeah, it’s a great question and it’s really, ⁓ really probably the best question I’ve gotten all week. And that is simply this. What are you good at? Like I was a paramedic when I was younger and I was good at jumpstarting hearts. I wasn’t good at doing operations. So you got to do what works best for you. And so if you are a someone who is a maverick, you’re not going to be a good operations person.

So the short answer to question is you got to invest in somebody. Now, the question is, how much do you invest and who do you invest in? That’s where the fractional comes in. So here’s an interesting piece. You’re not good at money. What’s the first thing everybody does is they get an accountant or hire a CFO, right? Okay, because you know you’re not good at money. And they’ll say, I’m not good at marketing.

All right, so they hire some great marketers out there. Tony Avier, Steven Trang, they’re phenomenal marketers. Josh Hines, Ashley Hines down in Maryland, or Florida, they’re phenomenal. Like the best of the best. They hire them. They go to Tiffany High. They’re the best. But when it comes to system processes, everybody thinks they can do it. They can’t because it’s a different mindset. It’s a left brain versus right brain. Or it’s, you know what? I always tell people,

I make real what you imagine, imagine your business, so you’re the visionary. There’s a reason why I’m the integrator. So they can’t, so the answer is no, you need to go, you got to play to your strengths. You’re wasting your time if you think differently. And so if you break your car, you can go on YouTube and figure it out. But what do most people do? They take it to mechanic. I can’t do that. Well, sure you can. You’re a smart person. Well, it’s my car. I don’t want to take the risk. But then why would you take the risk when it comes to your business?

Dylan Silver (08:31)
Right?

Rick Delgiorno (08:32)
yeah,

I didn’t think of that. yeah, so the Maverick can’t always be, the visionary can’t always be. I mean, there’s some people out there, there are, and I will, as in my role, I will say right away, hey, you got this, Dylan, you got this, you don’t need me, why waste your money? You got this. Now, if you need help because you’re being pulled in different directions, that’s a whole different ball game, but you’re capable of doing this and we can do a leadership or what they call an op study.

that will tell you right away if you should or shouldn’t, you you get scored. But no, don’t do it, just stick with what works.

Dylan Silver (09:05)
I know that you’re a big community guy, for folks who are investors looking for an investment community, but also for the asset classes that you’ve invested in and what they do to strengthen the existing community and neighborhoods. When we look at one of those segments, let’s take the addiction treatment, for instance, and some of the other projects that you’ve worked on. How do those deals

Is it strictly a bottom line, hey, we’ve got to make this underwrite and is that what guides this? Or does it also come from a place of, there’s this need here in the community, how can we creatively find a solution for this?

Rick Delgiorno (10:17)
It’s definitely a second. There’s a need in community. Think about this. And it’s been a little while since I’ve seen the stats, but think about it. If you take 100 people that need to sell their house, 20%, it was 20, it like 21%, 20 % can sell it the conventional way. They have time, they have money for RTIs, they have money to get away, for showings, things like that. The other 80 % can’t, okay? So that’s where…

we commit as real estate investors. We’re exchanging time for a discount. We’re exchanging money that they don’t have for a discount. We’re exchanging the affordability or I should say the availability, the time, I mentioned earlier, because we don’t have to worry about people tromping through your house. We don’t have to wait for 90 days. We can get it done now. The issue is

that there’s too many bad people out there trying to do this. They jump online, they see a video and all of sudden boom, especially with the economy crashing out like it did. People are like, I’m just gonna be a flipper. Well, yeah, because they saw something on the video, they saw something on TV. When I was growing up, it was Carlton Sheets. just, yeah. that’s why we started NAREIS , nareis.org, because we had a lot of bad actors out there that were really making it tough for the Mike Hambright’s and the…

Dylan Silver (11:28)
right.

Rick Delgiorno (11:39)
the Josh Hines’ and the Eric Brewers’ and the Tiffany High’s. And they’re all on board. I can’t speak for Mike, but a lot of them are on board with the National Association because we need our voice protected. We need our industry protected. Just like the real estate agents, excuse me, real estate agents have their industry. So the point is we need to make sure that we are operating at a standard.

that’s acceptable so that that 80 % can be served in a way that is accredited and it is done well because every, because there’s such a need. If it was flip-flop, there wouldn’t be a need, but it’s not. 80 % of the people out there need someone like us because they can’t sell their house traditionally or conventionally.

Dylan Silver (12:25)
If we talk about specifically the single family cash offer space, there’s a lot of unscrupulous actors there and that’s the space that I came from, And cut my teeth in. So you see it all the time. And then there’s also the reality that well, when you’re unlicensed, you don’t have a fiduciary responsibility to protect sellers. But at some point people are toeing the line.

Rick Delgiorno (12:35)
Mm-hmm.

Dylan Silver (12:49)
of legality, especially when they’re coming in saying I’m going to buy the house and then they’re assigning it and it’s not clear to the seller exactly what’s what’s going on, right? When we are looking at this landscape of wholesale cash offers in general, what do you see as some of the baseline improvements or structures that should be in place?

Rick Delgiorno (13:11)
Yeah, well, the first thing I’m going to say is we need to, as a voice, come up with that. We have to control. So I’m going to kind of bury off your question a little bit. We need to, as this industry, need to have a voice because at the end of the day, look at South Carolina, look at Pennsylvania, look at some of the other places, they make these rules and regs. And we had no voice in the matter. Nothing. We had no representation. And that just irks me to no end. So we need to have an accreditation.

We should, I mean, back up. We need to be the ones who define the narrative, really. The masterminds are phenomenal. They’re phenomenal, but they’re all the good players. That’s the 1%. Dylan, you and I have known, I mean, we’ve known these programs forever. There’s that 99 % that just sometimes play in the gray area, which is fine. That’s okay. I get it. But at the end of the day, we need to have a voice. So we need standards, we need accreditation, but we need to make them.

We’re not gonna have a bunch of people sit in DC or in the state house, or Clay Frank, our local, and make those rules for us without our representation. So here’s the thing, and this is why I’m arguing with South Carolina, and what I’m doing in DC now, is guys, you’re saying we have to have these rules. That’s fine, but you’re not giving us any education and accreditation, anything that signifies what it is we need to do. You’re just saying you can’t do it.

Well, that’s just not how business works. You know, we got unions that say, this is how things are going to go and this is what you’re going to do. I’m not suggesting we’re a union, but I’m suggesting that we band together. We take the money for our membership. Yes, we’ll do deals together. Yes, we’ll have a membership directory, all that good stuff. But there’s a bunch of people that do that very well. So remember, the first question you ask is why couldn’t the visionary be? Because there’s a lot of people.

the collective genius family that are doing that stuff very well. Every time you talk to one of them, there’s no one who says we need an accreditation and we need a curriculum. So as you mentioned, I did a lot of work in higher education before I got involved in real estate investment and same thing with addiction treatment. We’re coming up with those curriculums. We’re gonna be the ones who are gonna dictate to the lawmakers and policymakers what it is we need to do and how we’re gonna do it.

We’re gonna police our own industry before somebody polices it for us and it just is not working.

Dylan Silver (16:10)
Yeah, mean, to your point, most of the people who are attending these types of mastermind events and meetings are there because they’re trying to learn from other people who are already doing it successfully. So they’re not going to pick up bad habits typically. However, if you’re going based off of a YouTube tutorial and you can’t reach out to this person that’s behind a paywall and you’re not paying and then you’re showing up and saying, I’m going to buy your home and you don’t have a buyer lined up.

Rick Delgiorno (16:26)
Correct.

Dylan Silver (16:37)
And now, you know, your option period is over and the seller is like, well, when will be closing? Right. And you’d have no one lined up. That’s when people become frustrated and say, well, this wasn’t a scrupulous act or this was an unscrupulous actor.

Rick Delgiorno (16:51)
And unfortunately, our policymakers and lawmakers won’t grab onto that because they’re constituents. They forget that we’re constituents too. Look, this happened in real estate. This has happened in the Boilers Association. This has happened in HVAC Builders Association. We’re just getting our industry ducks in line and we’re getting representation as well. And that’s just it because I want to be able to hand off a real estate investment firm

or I’m sorry, practices and standards and systems and processes to my children and my grandchildren so that they can succeed in the business like you and I have. And that’s just it. We’re all successful in the business. But at the end of the day, that success opens us up to scrutiny. So therefore, that scrutiny is real. It happens. So let us define how we’re going to handle that scrutiny.

And as you know, public policy, we all went to school. all, I’m sure we all went to school. I’m not saying college, but in high school you learn in sixth grade class that policy is driven typically by government. But people have a say in it when I can go or we can go as a large organization and say, hey, we’ve identified this stuff. This is what we’re doing to fix it. They’re going to go, okay, you know what, what do you need from us? Because we’ll give to those individuals solutions. And that’s what people want solutions.

And then the next phase is telling, you we want everybody to be accredited. We want everybody to be successful. We want everybody to win, but we want to make sure that everybody’s doing it the right way. So it doesn’t ruin it for, so the few that will be doing it the wrong way. Okay. They, they will be, they will self identify out, but the ones that are doing the right way, they’re the ones that should be noted. And they’re the ones that should not be in my mind. And I hope your listeners think the same should not be scrutinized, regulated or.

policy doubt of business.

Dylan Silver (18:39)
We are coming up on time here, Rick. Any new projects you’re working on and then as well, anything you’d like to say directly to our audience.

Rick Delgiorno (18:46)
Now, new projects, basically, I do have another book coming out. called The Bourgeoisie Chaos. It’s my third one in leadership. It talks about what forest fires happen for a reason. That’s to rebuild a forest bed, right? Same thing with business. The Bourgeoisie Chaos talks about that. That’s coming out in probably two, three. With regards to NAREIS , or National Association of Real Estate Investors and Service Partners,

One of the things I found when we start just National Association of Real Estate Investors was just to talk about investors. Well, then I had a lot of partners come and say, well, we want to get involved. We want to be a part of what the national movement is. And we want to have a voice in what’s being said. So that’s why we added that. The board’s being put together. This is very purposeful. We have a board of directors that are

like you and me that are real estate investors and service providers, mortgage company owners, title company owners, things like that. We have a learning management system coming on board that’s called Absorb. Their owners are gonna be on the board probably. So you’re gonna start seeing ads pop up on Facebook and Instagram and all those things right now, talking about it, just getting the interest in. But really the biggest project is getting the board done and getting members.

Our first run is we’re looking for about thousand members to start that gives us enough money to go to K Street and if anybody’s familiar with federal policy K Street’s world lobbyist are so we need to go to K Street to get to hire a lobby firm to represent our interest So that’s our biggest project now. It’s our biggest focus now getting members ⁓ we only charge $495 only 8 % of

the membership fee goes to a ministry of services. We’re all volunteers, no one at this point is getting paid. It’s for ads, marketing, VAs, things like that. So yeah, that’s what we’re working on. We want to provide a voice. Now, there is one thing that your listeners probably thinking, well, I don’t need to join because people are going to do that for me. Well, if you don’t have a strong enough association, no one’s going to do anything for you. You know, we will be affecting positive change in industry. But

We will, what’s gonna happen is you have to become a member to get to accreditation. That’s the bottom line. And once that curriculum is an 18 module curriculum is approved by the board, it’s game on. So then we go to the policy makers and the lawmakers and say, we’ve solved the problem. We found a problem. We solved the problem. Here’s the accreditation process. And they’ll go, okay, what do you need from us? And then that’s how we’ll do it. So you will have to be a member to get accredited if you choose to. I know there’s a couple of people I talked to who said, I don’t really care.

Okay, well, unfortunately in time, you’re going to be pushed out because the industry is going to demand that you have some sort of accreditation. But that is entirely up to each and every bit. We have enough people who are interested. We don’t have to worry about that. So, but thanks for having me and thanks for the opportunity to talk. I’ve been doing a lot of these podcasts and I appreciate the opportunity. A lot of people have called to learn more and I’m happy to take those calls, but we’re ready to move to the next level and make this the best.

industry it can be because it is a phenomenal industry. We, as you mentioned earlier, we help communities but we also help people develop wealth and we want to protect that so that your grandchildren, your children, their grandchildren, etc, etc, can be successful.