Mike Spears of Lee & Associates — Houston: Five Things You Need To Know To Succeed In The Real Estate Industry

An Interview With Jason Hartman

Understand what your time is worth and prioritize. Be willing to bite the bullet and hire someone to help you. Understand the value of our time; it’s not as simple as throwing a number out there. If you’re a rainmaker, do that and let someone else step up and do the smaller tasks.

As a part of my series about the ‘Five Things You Need To Know To Succeed In The Real Estate Industry’, I had the pleasure of interviewing Mike Spears.

Mike Spears is a co-managing principal at Lee & Associates — Houston. Mike has established a remarkable career spanning over 22 years with more than $1.5 billion in transactions. He specializes in the greater Houston area, with a focus in industrial property, land, and investment sales.

Thank you so much for doing this with us! Can you tell us the “backstory” about what brought you to the Real Estate industry?

As I was graduating college, I got in with some guys during the ‘dot com’ era. They had just received venture capital funding for their startup, and it was exciting to be a college grad with a job at a fast-growing tech company. Unfortunately, after a while, my role kept changing and I realized my career had grown stagnant. It had been an exciting ride, but it didn’t seem like I was supposed to stay in that position. As I confided this concern in my mentor, he recommended I reach out to a colleague of his, Don Eastfield, a commercial real estate broker and developer. Don eventually hired me and took me under his wing and taught me the ropes of the commercial real estate brokerage. The first few years were challenging, and I was back in the headspace of feeling like I didn’t know if I belonged or what value I was providing. As I was about to throw in the towel, one day it all clicked. I went from having two listings to 21 in a matter of two months. That was in 2003 and those early years have shaped my career today.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

There are always interesting stories in our industry. The most amusing incident that’s occurred to me was that a client wanted to fight me (yes, an actual fist fight!) over the commission I was set to receive on a 15-year lease. To sum it up, the commission was sizable, and the client didn’t want to pay. I stopped by their office one day to collect payment and the president of the company told me that if I would fight the owner (an older man in his 80s), they would pay the entire commission in one lump sum in that exact moment. The older gentlemen threw his dentures in the ashtray and was ready to fight me in hopes that they wouldn’t have to pay. I was so shocked I wasn’t sure how to react, but I wasn’t going to leave without my commission check. In the end, they called my bluff (no, we never actually threw a punch!) and we’ve continued to work deals together to this day. The deal is never complete until they pull some sort of prank on me!

Do you have a favorite “life lesson quote”? Can you share a story or example of how that was relevant to you in your life?

“Success is not final, failure is not fatal, it is the courage to continue that counts.” -Winston Churchill

“It takes 20 years to build a reputation and 5 minutes to ruin it.” -Warren Buffet

I live by both of these quotes. The first humbles me and reminds me of those first few years in the industry; where I wasn’t exactly sure what I was doing, but I had the tenacity to keep going. It’s also the reason I get up and grind every day — in our industry, deals can fall through and sales can dry up in an instant, so you always have to be hustling.

As for the second quote, on those really rough days where I want to reach through the phone and grab someone, this serves as a reminder that I always have to rise above whatever challenges I’m facing to get a deal done. Every deal comes with its own tough set of circumstances, but I never want to lose an opportunity over a disagreement, no matter how small or large.

Are you working on any exciting new projects now? How do you think that will help people?

Lee & Associates — Houston just acquired its first office building, establishing a permanent home for our growing brokerage and property management business. Due to the structure of our brokerage, we were able to acquire our own physical space and utilize our expertise (the same expertise we use for our clients every day), to increase the value of the asset. While the acquisition of the building alone was exciting, more so is the alignment with our clients/customers which will exhibit our expertise in understanding the issues that present themselves to tenants and landlords every single day.

A key component of this acquisition is that we allowed everyone in our office (brokers and staff alike) the opportunity to invest money into this deal. The acquisition of real estate is an opportunity for real estate professionals to build wealth through passive income and equity growth. We are able to do that through the success of our company due to the fact that we are the biggest tenant in the building. Most investment offerings like this are limited only to those that can invest large sums of money. However, we allowed even small investments from the people in our office, thus, providing them with the means to build wealth.

What do you think makes your company stand out? Can you share a story?

A lot of us got into the business and worked our way up the ranks; one thing that stands out as good brokers is that we all are real estate investors ourselves. It’s made us better tenant reps and landlord reps, so we understand ownership in a way that’s more than we can learn in a book. We partner with clients on deals and it creates a situation that shows we treat customers more as partners and looking after them as if it’s our own deal. We’re not just about slinging property; we’re putting our skin in the game with clients too.

Additionally, we have a very clear path to partnership in our company. In other words, you have the opportunity to achieve partner status by adhering to a well-defined list of criteria. This can even be done in a short period provided you accomplish the goals that are set out.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

Mark Ward, my mentor helped get me in the business and was someone that taught me to get in on real estate deals. One of the things I learned about Mark — paper stuff is important because it’s legal but Mark was always true to his word and was one of those people that honored a handshake. I strive to do what I say, and I think I’ve cultivated a lot of friendships along the way by doing so. People always knew Mark would do the right thing and treat them right. I hope to set that same example.

Ok. Thank you for all that. Let’s now jump to the main core of our interview. Can you share 3 things that most excite you about the Real Estate industry? If you can please share a story or example.

1. The thrill of the deal. Often there are challenges and things that make the deal more difficult or impossible. You have to come up with a solution to get it across the finish line. Big or small deals across the closing line is tough.
2. Real estate is an asset that you can touch and feel and it carries a value. Not as volatile as other things being sold. Very steady and versatile. You can do a lot with it even though it’s not a liquid asset. This makes people wealthy.
3. I love teaching and talking about real estate. My favorite thing is seeing a younger person that doesn’t understand anything and then watching them transform into leasing offices and ultimately achieve success. I wish I could teach all the time because I really enjoy it and giving the ‘why’. Some people tell you what to do but they never explain why. There are so many ‘what ifs’ and I enjoy talking about those things.

Can you share 3 things that most concern you about the industry? If you had the ability to implement 3 ways to reform or improve the industry, what would you suggest? Please share stories or examples if possible.

1. Costs have gone up a lot. Faster than I’ve ever seen; cost and prices have gone up more so in the last 10 years and that’s concerning.
2. Reliance in technology can be a blessing but it also takes away the need to physically see a property and understand something. People have become less reliant on the relationship and rely more on just the data. Not sure how to fix it, I just see this as something that continues to evolve. But it also allows me to do remote work.
3. It concerns me that people that have gotten into deals that if the market turns they’re not doing too good because cap rates have dropped and they paid a lot to get into a building. There’s a possibility that some of these deals are too much for some people. It’s been so hot for so long. Underwriting has gotten more lenient.

What advice would you give to other real estate leaders to help their teams to thrive and to create a really fantastic work culture?

Take time to explain the ‘why’. Tell your people what to do and why they do it and explain it so they can understand and solve a complete problem and not just part of it. You can’t just hand someone a manual and say go do it. They’ll be better suited to adapt.

Ok, here is the main question of our interview. You are a “Real Estate Insider”. If you had to advise someone about 5 non intuitive things one should know to succeed in the Real Estate industry, what would you say? Can you please give a story or an example for each?

1. Develop good habits very early even when you feel like you don’t need to. For example, close a deal — get it organized. Down the road you may actually list that property. File it correctly. You’re not done when the deal gets done.
2. Stay in touch with people. You may close a deal five years later, but just because the deal is done it doesn’t mean your work is done. Keeping a client is a challenge and benefit of this industry. They could hire someone else in the short term. Play the long game.
3. Understand the ecosystem of your brokerage. Brokers — important to maintain relationships, — want to be taken seriously, but also want to be liked. Customers — people that you’ll do business with (whether a vendor in a transaction or a person that you know is in the neighborhood so to speak) and then there’s clients and how you interact with them. Then the transaction managers in your own office. Trusted advisors — M&A, lawyers, financial advisors, etc. these are business referrals. And you should be marketing to all groups.
4. Understand your motivation. Why are you doing this because you’re going to have to work really hard and make sacrifices. It’s super easy to get frustrated on things and then I get to go home and go on a vacation. Everyone needs to figure out on their own how to get the work done.
5. Understand what your time is worth and prioritize. Be willing to bite the bullet and hire someone to help you. Understand the value of our time; it’s not as simple as throwing a number out there. If you’re a rainmaker, do that and let someone else step up and do the smaller tasks.
6. Always make sure that your client’s interest are at the top of your concerns.
7. It is important to build a team to be successful. Creating relationships with people that will work with you (developers, contractors, lawyers, accountants).
8. Building relationships with your competitors is extremely important. More business gets traded between competing brokers that have good working relationships and a healthy respect for one another. The key to success in this industry is understanding how that dynamic works.

Because of your position, you are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)

I’d love to instill the principles of entrepreneurship in people. It’s hard to teach someone to be a self-starter and self-motivator which by definition needs to come from within. This would eliminate poverty and provide people with the knowledge to make a decent life for themselves financially.

How can our readers further follow your work online?

You can follow Lee & Associates — Houston on our website.

Thank you for your time, and your excellent insights! We wish you continued success.