With another great Super Bowl on tap this weekend, I was thinking about the similarities in organizational structure between a football team and a real estate company. In particular, how key positions within the football organization that contribute to building a winning team are similar to building a successful real estate business. Being subpar at even one position can mean the difference between winning the Super Bowl/closing a deal and being the perennial “wait ‘til next year” loveable loser.
Here are 5 key positions and their roles within an NFL organization and their corresponding real estate counterparts:
NFL POSITION 1
TEAM OWNER: The team owner decides on the team’s total annual budget necessary to run the team for a given year. The majority of the budget will be used to sign drafted and undrafted college players as well as players whose contracts with other teams have expired (free agents). Once that number is calculated, the team’s director of player personnel can determine how to allocate funds earmarked for player salaries. As a general rule, the more money at a team’s disposal, the easier it is to sign the best players, thus increasing the team’s chance of making it to the playoffs.
REAL ESTATE POSITION 1
BANK/LENDER: If you want to build a successful real estate team, you will need to borrow money. Your lender is like the team owner in that they have the final say with respect to how much you can borrow at any given time. The lender will review your track record along with your personal financial statement in making this determination. As your business grows, you will slowly and steadily expand your real estate portfolio. As the value of the portfolio increases and you gain more experience, the bank will lend you more money. The more money you have at your disposal, the greater the odds of bringing your real estate portfolio to “Super Bowl” status.
NFL POSITION 2
DIRECTOR OF PLAYER PERSONNEL (“DPP”):
Much of the makeup of a team’s player roster is dependent on the efforts of the DPP. The DPP oversees the scouting department and researches and communicates with prospective college players and free agents. This person evaluates the talents of prospective players in conjunction with evaluating where the team needs improvement. They are involved in contract negotiations with player agents in hopes of getting a desired player to sign with the team. The DPP takes the budget allocated toward player salaries into consideration in deciding which players to pursue and how much they can afford to pay the athlete.
REAL ESTATE POSITION 2
REAL ESTATE AGENTS (“REA): Similar to the DPP, REAs work behind the scenes helping real estate investors identify the most appropriate properties within the allocated budget. Additional duties include negotiating contracts for the sale and purchase of properties, researching target neighborhoods and properties and locating tenants for rental properties. Operating within a given budget, the REA will scout out properties listed in the MLS and off-market opportunities offering the highest quality returns that help the investor achieve success in building a real estate portfolio. A gifted REA will find off-market deals that others missed. The same way DPP’s for the Los Angeles Rams were able to place bets on Kurt Warner (undrafted) and the New England Patriots and used a 6th round draft pick on a slow and skinny quarterback “lacking physical stature and strength,” named Tom Brady.
NFL POSITION 3
CAPOLOGIST: I am guessing that some of you have never heard of a capologist before. The position of team capologist was created in the last 30 years as the NFL began to create rules around team salary caps. The function of the salary cap was to put a limit on spending with the goal of creating a more level playing field between teams. The capologist’s role is to understand the salary cap rules regulating the total amount of player compensation allowed by a team in a particular year. They have to work around detailed rules and find loopholes to put the best possible team together within the confines of the salary cap. The capologist evaluates a player’s value and then determines the appropriate path in structuring the player’s contract based on his value while working within the salary cap setting. This requires balancing the current financing needs of the team without restricting the ability to be competitive in future years. In its simplest form, if a team exceeds its cap space today, it might come at the expense of the ability to maximize the talent level of future rosters.
REAL ESTATE POSITION 3
ACCOUNTANT: Anyone looking to build a real estate portfolio has to have access to current financial information in order to make decisions for the future. Accounting experts can save real estate investors lots of money in their investment pursuits. Similar to capologists, good accountants are familiar with the tax code and accounting rules when participating in budget, planning investment and tax reporting activities. Using various reports provided by accountants, real estate investors can formulate realistic and effective financial and investment strategies. With the help of an accountant, they should be able to save the investor money while increasing their returns on investment.
NFL POSITION 4
QUARTERBACK: Probably the most crucial position player in all of sports is the quarterback. The quarterback is the leader of the team. A team can never truly be a contender without a competent signal caller making real-time decisions that are the difference between success and failure. He is the key member in directing his fellow players in the huddle. The quarterback has to manage all of the offensive players on the field and assess the challenges that the defense may present at any given time. Being able to analyze the opponent’s multitude of defensive set-ups and having the vision to call an audible (changing the play called) at the line of scrimmage is an important skill required of a talented NFL quarterback.
REAL ESTATE POSITION 4
GENERAL CONTRACTOR (“GC”): Similar to being a quarterback, the GC is going to make the biggest difference in the success or failure of a project. Much like a quarterback, part of the job is making sure everyone else is lined up properly and ready to do their job when called upon. The GC generally runs the job from start to finish and handles everything and everybody involved. They consistently make decisions that will influence the quality, timeliness and price of a project. The GC has to ensure that a disparate collection of highly skilled and specialized members (i.e., subcontractors) are brought together to form a coherent whole. It’s their job to ensure the sub-contractors come onto the project at the right time and finish in a timely manner. A GC has to be quick on their feet and take decisive action when necessary. The best GCs are not intimidated by unanticipated obstacles. They find ways to work around challenges keeping the goal of successfully completing a project in mind.
Last but not least, HEAD COACH. The head coach determines the team's overall game strategy. They are the motivator and set the tone for the team’s culture. The buck stops with them. They have oversight in every situation. They let your players take the field and do their jobs, but they are watching from the sidelines and can offer advice or support as needed.
Don’t “wait till next year.” Start building the team today that will take you to the “Super Bowl” tomorrow or understand the vital role you play within your organization and find ways to be a better, stronger team player!!
