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In this Episode
Dan O’Connor epitomizes that real estate is local—learning the business from the ground up from his mother, who enjoyed great success before passing the torch on to her son who now runs the business and is regularly among the top agents in the South Bay’s Beach Cities.
Learn how Dan O’Connor worked his way into being one of the biggest and most respected agents in the South Bay, specializing in the Hermosa Beach and Manhattan Beach areas. Hope you enjoy and please give us a review on your favorite platform!
“I always joke like, I played football in high school and we were the second tier sports team at our high school. Next to beach volleyball. Yeah, like volleyball is so ingrained in this community and then surfing and the beach life and being on football, we were like second class citizens. It was kind of funny.”Tweet
“…Endless number of summers on 4th of July, the big deal was where’s Pennywise going to pop up and have like an impromptu show? And so you just would wait for the word to get out. And we didn’t have social media back then and we didn’t have cell phones. So your buddies aren’t texting you, you’re just like, it’s literally word of mouth.”Tweet
“The whole thing in this whole entire business is making people believe you know what you’re talking about. That’s why I believe people would choose to work with me. I take a lot of pride in having a lot of knowledge in this business and I want to share that knowledge and I want my clients to benefit from that.”Tweet
“I had that 3001 The Strand and I opened the door and Michael Strahan comes through the through the door and that was pretty cool. He’s an absolute monster of a human being. Super nice. But you know, it’s such a crazy business. That weird stuff happens all the time.”Tweet
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Full Episode Transcript
Dan O’Connor – DIGS Influencers Podcast[00:00:00] Dan O’Connor: The first sale, I don’t remember which house it was specifically, but I do remember pretty much calling my mom every five minutes like, “what’s going on here?” Like, so I felt like I knew what I was doing, but you just don’t have that confidence. And so having someone like that to lean on it was, it was great. [00:00:26] And. You know, there was a number of clients in the first couple of years that were like, “you know, your mom’s involved in this, right?” So [00:00:41] Warren Dow: Welcome to DIGS Influencer Podcast, the Titans of Real Estate. The show that provides direct access to the real estate industry’s top movers and shakers is they share invaluable insight on how to best navigate and succeed in any market. I’m your host, Warren Dow, founder and CEO of M3 Media and publisher of DIGS Magazine. [00:01:04] In this episode, Dan O’Connor. [00:01:15] Warren Dow: Thank you to our show sponsor bow concept. Today we welcome to the DIGS Influencer Podcast. Dan O’Connor. Dan is owner of O’Connor Property and agent at Strand Hill Christie’s International Real Estate. Dan, welcome to the show. [00:01:30] Dan O’Connor: Thank you very much for having me. [00:01:32] Warren Dow: Before we jump into talking real estate, you epitomize what it means to be a South Bay local. [00:01:39] What was it like growing up in the South Bay? [00:01:41] Dan O’Connor: It was amazing. It was, I feel very fortunate to have grown up here. It was different. Back when I was growing up here. It felt less crowded. It felt less known of a place less less discovered, so to speak. It felt less affluent. It was a great family. Area, family, neighborhood, and very much a beach town, which I still think comes through today, which is the draw, uh, the schools and, and the family and the community and the beach. [00:02:10] I always joke like, I played football in high school and we were the second tier sports team at our high school. Next to beach volleyball. Yeah, like volleyball is so ingrained in this community and then surfing and the beach life and being on football, we were like second class citizens. It was kind of funny. [00:02:32] Warren Dow: So what’s your favorite city in the South Bay you think? [00:02:35] Dan O’Connor: Well, it’s changed. I mean, I grew up in Manhattan Beach. I grew up three blocks from the beach in Manhattan, and I love Manhattan. It’s always gonna have a special place in my heart, but I live in Hermosa now, and I’ve lived there. 12-13 years, and I just absolutely love Hermosa the quaintness. It’s literally less than half the size of Manhattan Beach geographically. And so there’s some really cool benefits that come with that. Um, the neighborhoods are, you know, more tight knit and the schools are smaller and it’s just, it’s, it’s a really cool place. [00:03:08] Warren Dow: And a footnote for our audience. [00:03:10] We are, we are recording this podcast. In Hermosa Beach [00:03:14] Dan O’Connor: Right? Yeah. So it’s when my office is in Hermosa. Yeah. Yeah. It’s great. [00:03:20] Warren Dow: Speaking of Hermosa, so I, when I graduated college, I moved here in 1990. And it was Hermosa Beach, my first where I first lived, [00:03:29] Dan O’Connor: I don’t know why. [00:03:29] Warren Dow: And then Manhattan, and then back to Hermosa, and I lived in Redondo. [00:03:33] Okay. [00:03:33] Dan O’Connor: So yeah, you’re almost a South Bay local [00:03:36] Warren Dow: almost, I think. I think another couple of years I’ll qualify [00:03:40] Dan O’Connor: 25 year application is in, pending review. [00:03:43] Warren Dow: Cool. Cool. Cool. So being local, so tell me about your journey also before you got into real estate. We’re going to talk a lot about real estate, but like. You know, again, South Bay, what did you do for fun and what, like what pockets of the community like. [00:04:00] Surfing. What was, what were you doing as a youth? [00:04:02] Dan O’Connor: Yeah, as a youth it was, um, just a lot of activities. I joke around like, cause I have two kids now and they don’t just go out and disappear and you know, and come back when it’s dinner time anymore. Like a childhood’s very different than when I grew up. But when I grew up, I grew up on the walkstreet. [00:04:20] We’re three blocks from the beach. And so every summer, all day long and be at the beach and I was very into boogie boarding and then surfing and did junior lifeguards and, and dabbled in volleyball and stuff. I was never a great volleyball player, but everything. Revolved around the beach and being near the beach and all that kind of stuff. [00:04:40] And then got into the typical sports soccer and basketball and baseball and football and stuff like that. But just absolutely love being close to the beach. And it was very ingrained in me. And then just being in the water, our family, we grew up with, you know, ocean boat or a, or a river boat. And, um, so watersports is a big part of my life, [00:05:02] Warren Dow: you know, and we forgot to mention the punk rock scene. [00:05:06] That’s all right. It’s Black Flag. [00:05:08] Dan O’Connor: Black Flag, Pennywise Pennywise is a little more of my generation, but I mean endless number of summers on 4th of July, the big deal was where’s Pennywise going to pop up and have like an impromptu show? And so you just would wait for the word to get out. And we didn’t have social media back then and we didn’t like, we didn’t have cell phones. [00:05:28] So your buddies aren’t texting you, you’re just like, it’s literally word of mouth. And you would, you know, 4th of July as a scene here and always has been, it’s one big party. And as a kid growing up here in middle school, high school, you were like dying to find out where Pennywise was gonna play, like who’s front patio or it’d be like an empty dirt lot and they would play as long as they could until the cops got called. [00:05:51] And then everybody would disperse. So yeah. [00:05:53] Warren Dow: Too bad that can’t happen. What happened today? [00:05:55] Dan O’Connor: All right, I’ll let that happen. [00:06:00] Warren Dow: Yeah, so after your high school, where did you… you ended up in San Diego, right? [00:06:04] Dan O’Connor: Yeah. I went down to San Diego, the university of San Diego, which is a small Catholic school right off of SeaWorld drive and just East of mission. [00:06:13] Beach Pacific beach and did four years down there and live by the beach. As soon as I could, a while, I went to school and then loved it, every minute of it and then came back home after I was done. And so [00:06:26] Warren Dow: I don’t know if you like to say or, or there’s a saying about you that you were born into real estate. [00:06:30] Dan O’Connor: Yeah. Yeah. No, I definitely say that. I mean, it’s, tell us about that. Both parents, uh, my mom and my step dad were in the real estate business. They’ve, they’ve owned brokerages. They’ve managed brokerages. They’ve just been brokers. They’ve just been agents. They’ve… my step dad owned a property management company along with all the brokerage stuff. [00:06:51] And my mom. Mainly focused on buyers and sellers. Um, she did do management for a little bit as well as selling the whole time. Yeah. I mean it was stuff that, I mean, she had one of the first cell phones in the car, like the builtin car phones. I bolted into the console. Yeah. I got hit across the head once with that, cause I was talking while she was on a business call and it was fun. [00:07:14] Yeah. I mean it’s just, it was all around growing up. [00:07:17] Warren Dow: So when you started in the business, did you. Work partner with with your mom? Is it, was it her brokerage at the time or [00:07:24] Dan O’Connor: she was a broker associate at a local company, South Bay Brokers, which recently in the last few years got acquired by Sotheby’s. [00:07:31] Yeah. At that point she was just focusing on buyers and sellers, and when I finished college, I wasn’t quite sure what I wanted to do, but I definitely had the real estate bug and she’s like, look, if you don’t really know what you want to do yet. Why don’t you come up here and you can work for me. And so I started out literally as her assistant eight 25 an hour and a along with just doing. [00:07:54] You know all the like assistant type stuff, which I was happy to do cause I was learning. I also just shadowed her on every appointment and like would drive around buyers. I’d drive, she’d sit shotgun and talk to the buyer. She actually really liked that feature and I’d go on every listing appointment and so I was just soaking it up. [00:08:17] Yeah. It was an unbelievable experience. It literally, I, I do. I’ve told people a number of times, like I wouldn’t be in this business if it weren’t for that. Type of opportunity cause just to start fresh on your own with no mentor like that. I mean it’s, it’s really brutal. [00:08:35] Warren Dow: So family businesses though can be really challenging. [00:08:38] Right. How did you overcome that? [00:08:39] Dan O’Connor: What’s really funny is my mom and I didn’t have the best relationship growing up. She’s a very… Like big personality and a very assertive person and, but, but those are all the strengths that make her a great business person. And when we started working together, we just really understood our roles and they morphed over time. [00:09:02] And, but she was very open from the beginning to. Things that I could add to the business. Technology was just starting to really infiltrate the business. So computers and not just computers, but like the software specifically for real estate cell phones. You know, and how we use them. And then obviously cameras and you know, photography and all that was really coming of age. [00:09:26] And so we actually worked really, really well together. And we, one thing I will say for anybody that’s listening that like is going to work with a family member, we sat down at the end of every year. And you know, essentially renegotiated our deal and it progressed over time to partners to 50-50 partners and then she slowly faded out of the business. [00:09:49] And it was, it was a, it was a great thing where we would sit down every year, talk about what the next year was going to look like and what our agreement was going to be and what, how we felt like we did the year before. And it was a great thing to do that helped us kind of have a good understanding of each other. [00:10:04] Warren Dow: That’s great advice. I mean, to be in alignment and just sort of. Recalibrate every year and yeah. Hey, here’s, yeah, that’s awesome. [00:10:11] Dan O’Connor: Yeah. [00:10:11] Warren Dow: So tell me about your first sale. How like your first first sale you got, you know you’re in escrow. What? Tell me about that first sale. [00:10:19] Dan O’Connor: The first sale I had the worst memory, so I don’t remember which house it was specifically, but I do remember. [00:10:26] Pretty much calling my mom every five minutes, like, what’s going on here? Like, am I doing the right thing? Yeah. You know? So I felt like I knew what I was doing, but you just don’t have that confidence. And so having someone like that to lean on it was, it was great. And you know, there was a number of clients in the first couple of years that were like, you know, your mom’s involved in this. [00:10:46] Right. So it was, it was a benefit for both of us. Yeah. [00:10:51] Warren Dow: That’s great. So what about your biggest sale. [00:10:53] Dan O’Connor: Biggest sale to date would be 3001 The Strand in Hermosa Oh, sorry, not that got eclipsed a year ago by, um, 1540 The Strand in Hermosa, that was over $14 million. Yeah. And so that was a new construction, three stories plus a basement on the corner of 16th and The Strand in Hermosa and that client, by the way, called off a postcard. [00:11:18] For four years before, and we just stayed in touch. We ended up doing a couple other deals before this one, but she lived on the corner of eighth on The Strand and wanted to upgrade. So I sold her eighth on The Strand for over 8 million, and then parlayed it into the 16th in The Strand. So it was over $20 million. [00:11:38] Warren Dow: So from $8 an hour to 22 million, you know, and sales and on two deals. [00:11:44] Dan O’Connor: Yeah. I haven’t really looked at it that way, but yeah. Not bad. Not bad. Yeah. [00:11:48] Warren Dow: That’s why this industry is, is so fascinating, and that’s why there’s what 1,000,005 licensed agents in the U S trying to try and make it happen. [00:11:57] Dan O’Connor: Yeah. And I feel like a million of them are in the South Bay. [00:12:00] Yeah. [00:12:02] Warren Dow: I think, I think, uh. You know, Manhattan Beach has literally more agents per square foot than any, (Bell Ringing [00:12:09] Warren Dow: the bell [00:12:11] Dan O’Connor: time’s up [00:12:12] Warren Dow: I’m sorry, I dropped my water. Uh, Manhattan Beach has more agents per square foot than any community [00:12:21] Dan O’Connor: I believe it [00:12:22] Warren Dow: anywhere probably. You know, [00:12:24] Dan O’Connor: it’s crazy. It’s a highly competitive. [00:12:26] Uh, industry. And then, and then obviously in this area it’s even more competitive. [00:12:31] Warren Dow: So Dan, I’m going to throw you a little curve. I’m, I’m big on, you know, marketing and branding and, and I do a lot of reading and studying, and this is sort of my passion. And, you know, marketing and branding is all about, you know, telling a story and creating a story. [00:12:45] So. Let’s have some fun if I was, if I owned a property on The Strand. Okay. Okay. And we were going to come out at 18 million. Okay. Okay. And I was interviewing you to sell my home, and I just simply asked you like, Hey, Dan, what’s your story? [00:13:00] Dan O’Connor: Yeah. [00:13:00] Warren Dow: How would you answer that? [00:13:02] Dan O’Connor: I really pride myself on being in tune with the market and being in connection with the players in the market. [00:13:10] And I think that is. Essential in this business just in general. And, and then especially in the super high-end, you, you have to have relationships with other agents and you have to be able to get the feedback from those agents. And you have to, you know, you have to be able to show these houses, you know. [00:13:32] Crazily enough, half the houses in the super high-end are tear downs. So you don’t really have to know a lot about the house itself, but the other half that are a beautiful, new construction home, you know, you have to know what lighting system, what sound system, what you know, all the materials are, and there’s a gazillion materials nowadays. [00:13:52] And to be an expert and be able to answer questions to any buyer that comes along is absolutely essential. So you sound like you know what you’re doing. The whole thing in this whole entire business is making people believe you know what you’re talking about. That’s why I believe people would choose to work with me. [00:14:08] That’s why I hold open houses like. Cause I can sit there and be myself. And if I can have an opportunity to have a conversation with somebody, they can at least know I know what I’m talking about. And if we, you know, that’s kind of my quote unquote hook. Like I take a lot of pride in having a lot of knowledge in this business and I want to share that knowledge and I want. [00:14:29] You know, my clients to benefit from that. So I try to express that with any client, you know, but especially in the high end, you have to feel like, you know, he talking about with this specific property. And then obviously with the market in general and with the other comparables to this property, you know, knowing how you stack up against other properties because the buyers know. [00:14:54] Forget the buyer’s agents, the buyers know what they’re looking at and the super high-end, you got to make them want to pull that trigger because half the time they’re just like, you know, Oh I don’t, you know, there just can be not super motivated cause there’s usually no huge rush. [00:15:13] Warren Dow: Right. Well said. [00:15:14] That’s awesome. So you mentioned a new construction and I know you have a passion for new construction and development. And obviously the South Bay has seen a ton of development. Yeah. How do you see that the development market today? [00:15:28] Dan O’Connor: So the speculative development market has really slowed down as far as the number of houses coming to market in general. [00:15:38] Like when I w the first half of my career, you know, it was like, it felt like 90% of the new homes being built were speculative and just a handful of builders. And there’s still a lot of spec builders in town, but what’s changed is the value of the land has gone up so much. The profits. You know, for these guys and their performers aren’t quite there. [00:16:00] They’re, they’re much pickier now and there, I can’t quite get to where they need to be to make business sense. And so, and buyers have become, you know, less fearful of the building process. So there’s so many more custom homes being built that, you know, you don’t have the same market. You know, I, you know, that you used to, it’s, it’s very interesting how that the market’s shifted. [00:16:26] Warren Dow: So then we’ll, we’ll talk more about the market in a little bit, but. What’s your favorite style of architecture? That’s the South Bay is so eclectic. Yeah. I mean beach cottage to modern too. Yeah. What’s your favorite style? [00:16:38] Dan O’Connor: I mean, my, the one that kind of tugs on my heartstrings is like an like a quintessential beach cottage though, kind of like. [00:16:46] And closed, you know, window porch and the like super angled roof lines and you know, the, the um, shingle style or like long plank wood style, two story, kind of like, just like I said, quintessential beach cottage. I also really, really enjoy. Like a really nice, soft, modern, I just can appreciate the craftsmanship that comes into something where there’s seamless parts to a house or just joints and stuff that aren’t covered up by trim and you know, all this kind of stuff you can get away with in a craftsmen or whatever. [00:17:21] The craftsmanship that goes into a really nice modern home is something I appreciate. [00:17:27] Warren Dow: So speaking of architecture, like it’s kind of interesting, I noticed, I mean the South Bay is so laid back. Right? Yeah, we’re beach, right? So we’re laid back and the architecture seems like it’s, it’s laid back and its own way, you know? [00:17:39] And it seems like there’s, there’s themes that come and go and, but they sort of go in a group, right? They’re building modern and modern is happening. There’s a lot of monitoring going on. Totally. And then plantation is the radiation. Then we do the plantation [00:17:51] Dan O’Connor: right. And now it’s kind of played out. People are getting sick of it, which you know, you wouldn’t have thought you would hear a couple of years ago. [00:17:58] But yeah, [00:17:59] Warren Dow: it’s just interesting because like on the Westside, people take a lot more maybe risks and chances. I don’t know. The architecture is all over the place, but there’s like full blown glass houses, you know? Interesting. Crazy stuff going on [00:18:12] Dan O’Connor: you think? Think because it’s just such a smaller market geographically and even inside, you know, Manhattan Beach, there’s so many different little niches that we just can’t be as brave unless it’s like custom, because you know a lot of these, again, spec. [00:18:29] It’s a business and they need to sell. They don’t want to sit on these houses. And when you’re spending millions and millions of dollars on the land plus the construction, you know, that interest clock, you know, runs and runs, and if you do something really brave, it’s not for everybody, you know? And so I think they’re just not as risk adversed and there’s just not as quite of an appetite down here because the area is so much smaller. [00:18:52] Warren Dow: That makes sense. So another curve ball for you. Okay. Tell us about any sort of funny, can’t believe it happened. TMZ type real estate moments. [00:19:04] Dan O’Connor: Um, geez. You put me on the spot. [00:19:06] Warren Dow: Yeah. That was my, that was my plan. [00:19:08] Dan O’Connor: Uh, well, let’s see. I mean, I’ve had a couple of celebrities come through houses that has always surprised me. [00:19:16] Like when I had many years ago, I had that 3001 The Strand and I opened the door and Michael Strahan comes through the through the door and that was pretty cool. He’s an absolute monster of a human being. Super nice. But you know, it’s such a crazy business. That weird stuff happens all the time. A funny story, and not necessarily like TMZ base, but literally. [00:19:41] I was growing a beard at the beginning of the year and it was my like playoff beard, you know, I was growing it until I closed my first deal and I closed my first deal like a week ago, and I came home from being with the kids skiing and on Sunday I shave the beard off and four hours later I had an escrow cancel. [00:20:05] So like [00:20:05] Warren Dow: I need to grow. We’re [00:20:07] Dan O’Connor: right back. [00:20:09] Warren Dow: Oh, that’s hilarious. [00:20:10] Dan O’Connor: It’s just, it’s such a crazy business, like and it is great and it is horrible all at the same time. So it’s unlike any other business I’m familiar with. [00:20:22] Warren Dow: Yeah, I’d totally unique. I agree. I agree. So let’s dive into the market a little bit. [00:20:26] Um, some, some insights and Intel. So I want to go back to the, this idea of local since you, you again, what it is to be a local. What does the old adage like real estate as local mean to you? You know, when they say real estate is local, what does that really mean to you? Who’s who is a bonafide local. [00:20:46] Dan O’Connor: Yeah. [00:20:47] I mean, I think to me they’re sentimental value too. Different areas, different streets, and, and, and for everybody it’s different. You know, you can go buy a new house and you in the tree section or East Manhattan and be very happy. But for me it’s like what does this street mean to you? What does this neighborhood mean to you? [00:21:12] Or what does this lifestyle create for you? That’s kind of what. You really want to dive into when you’re looking for that special home around here. And every Street’s different. It’s a very eclectic area. I mean, every Street’s different. Every little niche is different. All, they all have pluses and minuses. [00:21:31] We have neighborhoods that don’t have sidewalks. We have neighborhoods do have sidewalks, we have walkstreet houses, we have walked street houses that are on, you know, Hills. And we have flat walkstreets. And every niche comes with something different. And, and honestly. What you tend to get around here too, less than you used to like a generation ago, is people move to different niches as they go along in life. [00:21:55] You know, you, we moved to East Manhattan for the big yard, and then he moved West of to be closer to town, and then he moved to the sand section, uh, to enjoy the view and really be close to town and enjoy the beach. And obviously . In our area. That’s the most expensive, essentially. Um, and [00:22:13] Warren Dow: then you moved to PV to get away from [00:22:15] Dan O’Connor: exactly your, you moved to Palm Springs to, you know, it was funny. [00:22:20] He around the [00:22:21] Warren Dow: world can sort of trace the migration of like, yeah, [00:22:25] Dan O’Connor: yeah. But when my parents, you know, we, we literally just lived on the wok street cause that’s where my mom wanted to be. And you know, I, I grew up on the walkstreet. [00:22:35] Warren Dow: Looking for a personal stylist for your home. Check out Bo concept. One of their design consultants can help you make the most out of your space. [00:22:43] No request is too big or small for living, dining, sleeping home office and outdoor spaces, and check out their Southern California showrooms in orange County, in Costa Mesa, and also in Los Angeles on LaBrea. For more information, visit Beau concept of Bo concept.com email firstname.lastname@example.org. So let’s talk about pricing. [00:23:05] I mean, no secret pricing has gone completely, totally Richter, you know, astronomical. I mean, Manhattan Beach alone, if you look at like the Hill in the tree section in sand section, easily up over 50% since 2013 [00:23:22] Dan O’Connor: right? [00:23:22] Warren Dow: So what do you think pricing, like what are the implications to this continuous. Break new records, you know, new development, like what are the, what in terms of just what, what do you think future affordability and like is there a middle class anymore in a South Bay? [00:23:40] Like what are your thoughts on that? [00:23:41] Dan O’Connor: Yeah, I have a few thoughts. I mean, I think you touched on it right there at the end. Like there, like it’s. It’s hard to get into mat and beach under $2 million, like in, that’s insane. Like that’s crazy. Even East Manhattan, like a tear down is going to cost you a million and a half dollars, you know, in 10% plus or minus, and it’s a tear down, you know, and you’re spending a million and a half dollars. [00:24:05] So it’s, it’s absolutely crazy what the prices have done. I think one of the things that. Has kept the market going is the interest rates are so low, like still [00:24:17] Warren Dow: still has been. So cheese, [00:24:18] Dan O’Connor: ridiculous. If you borrow, you know, less than 30 year fixed, like you’re like 3% under 3% or just over. I mean, that’s insane. [00:24:29] And 30 year fix are like high threes. Maybe four. You know, I sound like my mom when I say this, but my first house, like the interest rate was 8% my mom tells stories about her first house. The interest rate was 16% there’s obviously different price categories, but if you just take the illustrate for what it is, I mean that’s, that is historically low and still, and they keep talking about rates going up and I truly, truly believe they’re going to, they just haven’t. [00:24:55] Again, the theme of the first half of this podcast has been local and like me growing up here, but. As you know, like I’m a rare breed and so we’re, we are getting, you know, people moving from out of the area and it’s such a larger demographic that live out of the area and they’re, you know, wealthy people and they come into town cause they want to live here. [00:25:18] And there’s a lot of great features about living here. And so. The demand hasn’t gone down and that hasn’t, you know, the demand keeps coming mostly from like the West side and stuff like that, or out of state. But that’s what’s kept the prices going the way they have. [00:25:34] Warren Dow: Yeah. I don’t see that ever sort of, of course it’s going to be cyclical. [00:25:39] Right. But it’s sure, but there’s only one strand, right? There’s only one. So it’s like [00:25:44] Dan O’Connor: they’re not making more land [00:25:45] Warren Dow: and the big money, they get what they want. And if they want a strand home, yeah, there’s no, show me the comps. How much will it take for me to get this up home? Right. Even if it’s for sale or not. [00:25:56] Right. There’s been stories. Word, you know, a door knock. Here’s an offer [00:26:00] Dan O’Connor: for your home. Yeah. And you know what’s crazy to me? Two things I’ll say. One is. The last year or two things have been price sensitive. I’m not saying prices have gone down, but buyers have been more sensitive. They’re not going to just throw good money after bad over something, but if it’s priced right, there are buyers out there to gobble these things up. [00:26:25] That’s something that, you know, you can’t just ask whatever you want any more. Where there was a time, there was a time, [00:26:31] I [00:26:32] Warren Dow: want to say like, I want to say three years ago. I might be wrong, but I didn’t. One of an agent who knew who will remain nameless, tell me about, they closed the deal on The Strand. I’m not sure who they represented, but they were half of the transaction. [00:26:47] Right? Right. And I think it was a seller. Yeah. They represent a seller. And I guess there was a buyer who was looming that missed out on the transaction for whatever reason. Right. So literally. Before he had had a closed escrow. He, he contacted his agent, said, as soon as escrow closes, I’ll pay you pay the owner $1 million to sell it back to me. [00:27:11] Dan O’Connor: Wow. Over cash. Wow. Do they do that? They didn’t do it. Oh, cause it’s like, [00:27:16] Warren Dow: again, yeah. No, it’s not. It’s like, [00:27:18] Dan O’Connor: yeah. What’s interesting too, on a, like kind of a caveat, but a similar idea. Some of the most motivated buyers are the next door neighbor. Like that’s one thing we’re seeing more of. These days and it’s not a huge scale, but we’re seeing more and more people buying the lot next door. [00:27:37] You know, cause you know, in some of these neighborhoods, like the tree section or the sand section. These lots aren’t very big. I’m a 4,000 square feet in the tree section, four to 5,000 square feet for your average law, the sand sections, 2,700 square feet for a quote unquote full law and so on. The strand is 3,300 square feet. [00:27:56] I mean, these are not big properties and so you’re seeing like the neighbors come by and grab the small house next door so they can. Put, you know, put a pool in or, you know, just have control over the yard. Exactly. Yeah. Put a guest house like this. It’s been an interesting phenomenon in the area that’s happening more than you would think. [00:28:17] Yeah. [00:28:18] Warren Dow: So speaking of the appreciations that, what, what’s the biggest. When it was heyday, when it was frothy, what, what’s the biggest, you know, price offer over list that you saw? [00:28:28] Dan O’Connor: Yeah. I don’t know that I have a, an insanely exciting answer, you know? But it would be somewhere along the lines of, I’ve seen things in. [00:28:38] You know, the high ones, the $2 million range go for, you know, 10% over what they’re asking. So you’re talking about a couple hundred thousand dollars from the list price I’ve seen, I haven’t personally been involved, but you’ve seen some of the super high end go. You know, $1 million over, but that is, you know, in comparison is also around 10% of what they’re asking. [00:28:59] So that’s probably, you know, a typical like crazy story. Like, Oh my God, it went, you know, the X over, it’s usually around 10% it seems to really catch people’s eye. Obviously hearing those stories less than less with the buyers being a little more conservative for sure. Just because a lot of the like highly motivated buyers already bought. [00:29:20] So it’s kind of the more people that are. I would say less motivated. There’s not this huge need or desire, and again, we’re talking about. Wealthy people in general compared to the rest of the country. Right. And so they don’t, they, you know, they have this approach that I’m going to be more conservative or more, you know, a student with the purchase I’m making. [00:29:44] And so I would say like that combination of slightly less motivated for the know, like. Crazy desire, and you know, people wanting to feel like they’re making a smart decision because there’s uncertainty. You know, we’ve had such a run-up. I mean, like you said, 50% from 2013 best, 10% a year, basically. I mean, that’s insane. [00:30:07] And then on a big number and then all the, all of what’s going on in the world, you know, the political climate and just the, just the feeling that we’re due for a correction, you know? I mean, the last downturn was 2007-2008 10 years ago. Usually. The cycles in real estate are shorter than that. So everybody’s just trying to time the market and they just like, they want to feel smart, like, Oh, I timed it right instead of being the last one in, you know, before it goes down. [00:30:37] But if you, I say this to everybody, like if you hold on for the long term, like, I mean, history proves that you’re going to be totally fine. You know you’re going to do very well. Yeah. And these rates, like I can’t, I mean, I am hitting this home, these rates, even if you overpaid and like two years from now, the market dips 10% but it’ll come back and you’ve locked in this 3.75 interest rate for 30 years. [00:31:07] You’re going to look like a genius. I mean, I just want all your buddies are buying houses five years from now, at 6%. You know, and that’s what people forget, like, Oh, I want to wait until the market turns down. Well, rates are going to go up. Is it really going to be that much more affordable? There’s an equation there where it’s like, okay, yeah, the price went down 10% but my interest rate doubled. [00:31:27] You know what I mean? Like some of these traditional buyers are borrowing 70 80%. So that that double in interest rate has a more significant effect. You know what I mean? So it’s, it’s, it’s all you got to take it all on a consideration. [00:31:42] Warren Dow: And speaking of real estate, as you know, it’s sort of an investment. [00:31:45] I mean, what’s wrong? And even in normalized times with a 3% return on $1 million asset per year. [00:31:50] Dan O’Connor: Well, I mean, savings account, I don’t even get a full percent. [00:31:57] Warren Dow: Yeah. So it’s crazy. So let’s talk about the real estate industry and market for a moment. I mean, industry has been crazily disrupted and continues to be. [00:32:06] Zillow. CEO just stepped down, I don’t know if you heard that last week. And there’s lots of turmoil there. Compass continues to raise, you know, ungodly amounts of money and gobbling up, you know, boutique brokerages and growing and growing. You know, mergers and acquisitions continuing to still get the South Bay, right? [00:32:22] Yeah. We talked about South Bay brokers, you know, short word, where you worked for a long period of time. It’s gone. When you look at the South Bay last five to seven years, where do you see this going in terms of like, we’ve been sort of not immune [00:32:38] Dan O’Connor: insulated. We’ve been insulated, right? [00:32:40] Warren Dow: And, but now that insulation is beginning to crack a little bit. [00:32:44] Like I just saw on the way into work yesterday, a Rex. Listing sign on a huge house. [00:32:49] Dan O’Connor: I don’t even know what that is. [00:32:50] Warren Dow: Rex is a discount broker out of a Westside or somewhere. [00:32:54] Dan O’Connor: Yeah, I mean we’ve, we’ve had discount brokerages before, you know, in my history in the business, the one that really interests me and I like want to keep an eye on and have been keeping on as Compass. [00:33:07] Like they’ve got like $1 billion behind them, some crazy amount of money, venture capital behind them and they are pushing. Their investments behind the actual agent, and that is a big difference between what the fear has been for somebody in my industry, which is like having Amazon come in or Google come in or whatever, where they’re trying to automate. [00:33:31] Our business and remove the agent from the process. Here you have somebody with hundreds of millions of dollars coming in and basically throwing it behind the agent. You know, you would like to think there’s a lot of smart people that think that’s a way to go as well. And so I do truly believe we provide inherent value, or at least agents like myself, I’d like to include myself and somebody that takes a lot of pride in being an expert in their industry. [00:33:59] And I’ve seen. What I’ve advised my clients to do, make my clients a lot of money, make their lives happier, make their families happier. And you can’t do that with an automated system. And a lot of these people are busy and they, you know, you have to dedicate a lot of time if you want to remove the agent from the process. [00:34:21] That’s my belief. So Compass really. Interests me as far as like and they are making waves. They’re coming into town, they’ve already infiltrated the West side, and they’re going across the country too, and they’ve got a lot of technology behind them and a lot of money behind them. I’d be curious to see how that works, but the other half of your question is like when I started 15 years ago, like. [00:34:48] The South Bay was this little, not, you know, quote unquote bubble in so many different ways. But with the real estate industry and two independent brokerages like just dominate this area and they dominated for 30 plus years, and the big corporate companies, Coldwell Banker, Christie’s, Sotheby’s. Even RE/MAX, who’s been around like never really dominated the area. [00:35:13] They couldn’t take over the area. And now that those two smaller independent companies have kind of. Dissipated. One merge and the other one sold, but then it just completely disappeared in Shorewood. That’s been the biggest difference is now these big corporate companies have come in and we have strand Hill Christie’s, which I’m a part of that really, you know, is does amazing in her. [00:35:38] Most of them have beach [00:35:39] Warren Dow: area, one of the biggest players, and they were only how many years old? [00:35:41] Dan O’Connor: I mean, they’re only… I think four years old. I’ve been with them a full year now, and by the way, we have a fraction of the amount of agents that. Like Sotheby’s does and Sotheby’s has like almost 300 agents and we have like less than a hundred so the fact that I don’t have the stats, I don’t want to misquote, but if we’re either number one in Manhattan Beach or like right up there with number one or number two, and as far as transactions and volume, it’s a pretty amazing thing. [00:36:09] Warren Dow: [00:36:09] And that’s awesome. So back to Zillow for a minute, because this is what’s interesting. I find like their market valuation market cap is like. You know, it hovers depending on their stock price between six and $8 billion, which is crazy. It never made money. Right. [00:36:23] Dan O’Connor: Um, and now there’s two right there. [00:36:26] Warren Dow: Yeah. [00:36:27] It’s one of those build it and we’ll eventually get profitable, but they’ve, with the CEO leaving there, they now they’re doubling, tripling down on their whole I buyer thing where they’re buying homes and flipping them and all that. What do you think is going to become of someone like a Zillow who was like a real estate disruptor 1.0. [00:36:43] I mean they’re 10 years old, whatever, but like even their old hat in a sense that right now there’s Open Door and there’s, you think they’re going to be a brokerage one day. Do you think they’ll flip the switch? Like, [00:36:53] Dan O’Connor: I mean, I could definitely see that happening with all that kind of money. Those types of companies look for other avenues to make revenue and if they think they can make revenue by buying and flipping and or becoming a brokerage, I think. [00:37:07] It’s a testament though, if that does happen to the value of an agent, like if they’d turn into a broker, they’re going to have, you know, even like Redfin, I mean, they have agents, they just have a different business model than like a traditional brokerage. But I don’t know what’s going to happen with Zillow, and I just always feel like. [00:37:24] This area is either going to be like the last affected or not affected because it’s, it is such a unique area and you know, we’re, they’re buying is like, from my knowledge, is like a Nevada and Arizona where there, where it’s easy to acquire things like that. And the transactions are [00:37:42] Warren Dow: Combs. [00:37:44] Dan O’Connor: Yeah. And so, you know, it’s. [00:37:47] It’s not the same thing here. So I don’t, I don’t see that as an imminent threat at this time. [00:37:54] Warren Dow: Yeah, it’s interesting. There’s just the watch that keep an eye on, on, on that development for Amazon to know. I know. I mean, Amazon’s. Anyways, so in closing, let’s get back to maybe some fun stuff, not real estate. [00:38:07] So I hear you’re on this, this 20 2019 workout challenge. Well. Tell us about this. Okay. [00:38:14] Dan O’Connor: I was inspired by my real estate coach. I’m a real estate coach, was part of the Tom ferry real estate coaching network, and he did this thing last year where he did 250. Cardio workouts in a year and it comes out to like roughly two of every three days you’re working now. [00:38:33] And so I just started this year off thinking I want to do something different. Physical fitness has been something that I really want to focus on and makes me feel better and healthier and you know, allows me to eat what I want to eat. Cause I have a, I have a little self control problem when it comes to food. [00:38:51] So yeah, I’m doing 250 workouts. In a year, and I’m, I’m posting it on my Instagram stories to kind of keep myself accountable. Nice. So, but it’s been quite a conversation starter for people and I get a lot of, I get a lot of messages and people bring it up when they see me. It’s kinda been, it’s kinda been cool. [00:39:10] Warren Dow: That’s awesome. So do you have a favorite vacation spot? [00:39:13] Dan O’Connor: Yeah. Yeah. It’s become less of a vacation because my, basically, my whole family’s moved there, but Maui has always been a great place for. You know, somewhere I love to go and I have two kids and they love it over there. But my sister and brother-in-law live there with their two kids. [00:39:29] And my mom has basically moved there with my stepdad. So I don’t really stay at their house. We tend to get a hotel or whatever. Well the kids love the grand Wailea cause it’s got the most insane like water park pool kind of thing. But yeah, we stay a Wailea area because that’s where the family lives, so. [00:39:51] Awesome. [00:39:53] Warren Dow: Are you working on a real estate project in Kona, Hawaii or something? [00:39:57] Dan O’Connor: I’m not working on anything. No, no. [00:40:01] Warren Dow: In fact, we have a, we got a rumor, but no. Oh, no. [00:40:08] Dan O’Connor: Yeah, I mean, the biggest thing. If you don’t mind me jumping in, jump league is different for me in the last 18 months is I took over my step dad’s property management company, and that has been quite an experience, a learning process. [00:40:24] Uh, but it is. A great overlap to my brokerage business. A lot of my clients are at a point in their lives and, and, and in their investment strategy that they want to include in income property. A lot of clients nowadays, because of the wealth in the area, they don’t sell their old house. They keep it because they think it’s a great asset to hold on to. [00:40:50] So I can now provide these management services for these clients. And then my stepdad had a great book of business that I’ve taken over. So we manage about 105 units in the South Bay area, and it’s, it’s become a great overlap for, from my brokerage business. Yeah. So that’s my. Project, so to speak. [00:41:11] Warren Dow: Yeah, good deal. [00:41:13] So Dan, it was great to chat with you today. Thank you so much for your time, and we, we definitely enjoyed hearing your. Your personal story and insight in the market, [00:41:23] Dan O’Connor: [00:41:23] so thanks. Yeah, thank you. I mean, this is my first like official real estate podcast, so this was, this was cool. Awesome. I like it. Yeah, thanks for having me. [00:41:33] Warren Dow: You’re very welcome. So thanks for tuning in to the DIGS Influencer Podcast. We’ll look forward to hooking up next time. [00:41:48] And that wraps up this episode. Thank you for tuning in and we hope you found some value. Please share, subscribe, and leave a review. Find us on iTunes and your favorite podcast provider. Until next time.
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