Although the humble Californian would be the last person to call himself a kingpin, Keith Guenther certainly fits the description in more ways than one. First, he’s the founder, CEO, and central figure of U.S. Real Estate Services, better known as USRES, a national real estate service provider offering REO disposition, valuation services, and technology products. He’s also been a legitimate bowler since he was 10 years old, having at one point in his young adult life even considered going professional.
But there are still more parallels between Guenther’s participation in sports and his business success; namely, the ability to balance individual with team performances, the wisdom and judgment of a seasoned coach, and the enjoyment of incredible staying power over the decades (not unlike bowling itself)—this year USRES celebrates its 25th anniversary.
REO disposition, valuation services, and technology products have been around for a long time, and aren’t going anywhere. In fact, one could argue there’s nothing radical about the nuts and bolts of what USRES does—and Guenther would probably be the first person to admit that. What makes USRES special is not what its business is, but rather how it does business.
In an industry notorious for its ups and downs, Guenther has expertly leveraged a trifecta of qualities to help his company weather the real estate storm cycles. He’s a keen observer and listens well to his clients’ requests. He trusts his employees to do what they need to do, when they need to do it. And he’s not afraid to take a less-than-common route if it’s the right thing to do for his business and the industry. More importantly, however, he’s done an impressive job of passing these lessons on to his team.
GETTING INTO THE GAME
A near ringer for actor Sam Elliott in his Conagher days (with a matching mustache, to boot), Guenther founded USRES in 1992. At that time, rising interest rates, overdevelopment in commercial real estate, deregulation of savings and loan lending standards, and reduction in capital reserve requirements had converged. The United States was in the throes of the early 1990s recession, and multiple industries were reeling from the savings and loan crisis and accompanying real estate market slowdown.
The Resolution Trust Corporation (RTC), created specifically to clean up the S&L mess, closed or resolved more than 700 savings and loans institutions between 1989 and 1995. Additionally, by 1991, construction on new homes had plummeted to its lowest rate since World War II. New construction prices had also fallen, and it would take six years for above-inflationary growth to return them to normal.
Having been in the real estate industry for years, Guenther had already served time as an agent and managed offices, including a real estate office for major industry player Tarbell. But it wasn’t until a conversation with a fellow broker that the idea occurred to him to start his own enterprise. The industry buzz was that there was a need for real estate agents to help with the valuation side of things, and then, later on, with disposition. Guenther explains that the real estate market runs in 10-year cycles, and that he and others could see the savings and loan “debacle” coming based on what they’d experienced in the ’80s. Ultimately, he took the plunge.
“We started with the savings and loan problem, the RTC auctions and all of that property,” he explained. “A lot of people didn’t understand what short sales were, which we were doing some of at the time, in the very beginning, so they said there was a need for companies like that. But this was all new. Obviously there had been REOs forever, but it was always in small pockets here and there, and there were certain agents that did it. It wasn’t nearly as large of an industry back then.”
UPDATING THE TECHNOLOGY
USRES began making a name for itself in BPOs, appraisals, REO disposition, and default valuations in Southern California in its early years. But even as USRES was taking off, the industry’s technology, or lack thereof, was a major limiting factor. Guenther describes the landscape in the 1990s and even early 2000s as being in dire need of standardization and general organization. At that time, there were no widely accessible databases for listing real estate agents and other service providers crucial to the business, so Guenther began building his own.
“Probably, if there’s anything that I’d say we led with, [it] was the technology,” he says. “When we started building all the technology that later became RES.NET, it was all for ourselves, because I realized there was no way we were going to be able to do all of this without having all of these databases, having all of this information,” he said. “I’m not a big tech guy, but it made sense. And it all just grew from there.”
An online platform that can be used by agents, servicers, vendors, and consumers,
RES.NET is a wholly owned subsidiary of USRES and was built to streamline all processes related to asset handling. Launched in 2003, RES.NET makes connecting, communicating, document trafficking, and report generation possible for users, with different levels of registration and access, depending on the user’s role.
Appraisers, title companies, and eviction companies can register for free in order to receive business from others in the RES.NET community. Agents can choose from three subscriptions with varying degrees of resources and benefits, such as the ability to submit offers, add short sales, complete BPOs, manage properties, communicate with consumers, and store documents, task their own brokers or assistants, and even gain exposure to more than 140 servicers.
They say timing is everything, and there’s no denying Guenther’s timing with RES.NET was perfect—industry demand was high and the internet was catching on like wildfire. (The percentage of American adults using the internet climbed from 52 percent in 2000 to 61 percent by 2003, the year USRES unveiled its technology solution.) “I always knew the need was there,” he said confidently.
But aside from the monumental task of creating RES.NET in the first place, another challenge Guenther points out came in the form of standardization. What should be included on a BPO form? Should lots be described in terms of square footage or acreages? These and countless others were among the questions Guenther and his team had to resolve to bring RES.NET to life.
“In those days, it was all faxing this and faxing that—you could barely read it. And how did you standardize what they would send you and the quality of what they send you?” Guenther noted. “We worked very diligently to do that. Unlike with appraisers, there has always been a standard for all of it, but with BPOs, it was the back of a piece of paper to just a few comps to whatever, and we just standardized that.”
More than merely getting RES.NET off the ground, Guenther and his team—which currently numbers 100 employees across both the USRES and RES.NET sides—were formulating a better way to do business, dictating how processes would be carried out in the business moving forward, essentially shaping their industry. Not too bad for someone who’s “not a big tech guy.”
And although RES.NET may have come second, it’s now one of USRES’ primary differentiators. Guenther credits the control his business has over the technology as being key, specifically the ability to update the software to include whatever they want, as frequently as they want. “We built an enterprise system, meaning it changes, week in, week out, month in, month out. So you’re not buying a software that’s going to get outdated,” he says.
The CEO explains that clients’ needs and wants are all heard and recorded, and when RES.NET sees trends forming, those dictate the next round of upgrades. To build out major changes, such as new modules, Guenther says his company does some back and forth with clients who essentially agree to sponsor the work. The client provides data and intellectual property, RES.NET leverages said data to build a finished product that meets the client’s needs, and everyone wins.
WORKING AS A TRUSTed TEAM
The process for evolving RES.NET is just one example of how the team’s ability to learn from their efforts and listen to a client serves them well. It’s an aptitude that comes naturally to Guenther and one he’s worked hard to instill in his staff. “We go in as a company and say, ‘Here’s what we do, what else do you need done? How can we fix those holes that you have with the expertise we provide?’” he explains.
CFO Michael Bull is quick to point out, however, that just because technology plays such an important role in the business these days, USRES still practices human-to-human interaction at every opportunity. “Nowadays, it’s so easy to send an email and only work by emails,” he said. “A lot of us who grew up in this company realize that and know how important that still is.”
It’s a perspective that’s also shared by Angela Hurst, SVP of Strategy and Development. “It’s a delight to be able to work with customers, to work with prospects and truly sit down with them … and say, ‘What is it you need? What is it you want?’ If one customer’s having a hard time, chances are, that’s a pain point with several other customers.” However, Hurst points out that it isn’t her job to always say yes. In fact, she says no a lot, which she says is never fun. “But I find that clients are so appreciative of being asked. … [the] mutual respect I think is put in place, because I think therein lies integrity. … [and] without integrity, it doesn’t matter what kind of product you have if you lack that.”
This mindset among the leadership team was born of USRES’ beginnings as a service provider, a business type that undeniably lives or dies by the quality of care it can deliver to clients. Eventually, after USRES had an actual product to offer in the shape of RES.NET, that same “customer-comes-first” mentality survived and spread into every aspect of how the company does business. It’s why a number of their clients have been with them for 15, even 20 years.
Guenther calls building that kind of client loyalty a “lost art.” He insisted, “You need to find out what is [the client’s] pain point? Because if you can fix that, then you become a partner. Once you become a partner, then you have open communication with your client. Then it’s very easy to grow and know: What direction do I go in? What products? Listen. The client will tell you.”
Rida Sharaf, SVP of USRES Operations, said, “We’ve always run the company with a ‘mom-and-pop’ type of feel. Our clients always have access to us. If the client doesn’t wish to go through an automated call center, we will make it so. So customer service is still paramount.”
The fact that USRES’ employees have so capably picked up Guenther’s customer service torch and ran with it says a lot not only about their skills, but also about the CEO’s leadership style. In many ways, Guenther’s staff members paint him as their big-hearted coach, a veteran leader who encourages his team to cultivate their own problem-solving skills and who generally supports their game-time decisions.
Sharaf stated, “We have a very unique management hierarchy, which enables all of us business unit leaders to really put forth honest input without fear of being labeled as someone who’s nonconformist. So we’re able to be very creative, and you know, credit given to our CEO, he puts a lot of trust in us and he sometimes will allow us to make the decision that we think is the most prudent.”
This trust encourages staff to leverage their collective brainpower and experience. Guenther says he believes this helps the employees feel like they’re integral to the company, which fosters ownership in their actions that fosters a deep sense of caring.
“As companies grow, you have to let go,” explained Guenther, a father to five and grandfather to seven. “I’m a sports guy, so I take a lot from coaching. I can’t play the game when I’m coaching. My job is to be able to get the right people to do it.” He continued, “I think my style, more than anything, is to stay away from cloning myself. A lot of people I know, who have been in the industry, they want to have likeminded people because they feel like a team. I do pretty much the opposite. I want to get people who see things differently than I do.”
NEXT QUARTER AND BEYOND
In addition to really hearing clients and fostering a culture of empowerment among the entire staff, USRES’ willingness to adapt to the economic times has granted the company admirable longevity. The company experienced rapid growth in 2006 and 2007, totaling more than 300 employees at one point to keep up with demands that were increasing as the housing bubble began to deflate. By then, the reputation USRES had built for itself over the past decade, along with the healthy client relationships and their new technology, RES.NET, positioned them well for business.
Guenther says the next bubble is coming, although it won’t be anything like the last one the country saw. And until the next wave of REOs arrives, he’s looking to add more products to RES.NET. Rob Pajon, SVP of Marketing and Product Development, said USRES recently launched a valuations portal. But what he’s most excited about is RES.NET’s forthcoming product called PropertyCure.
Designed to solve issues of workflow fragmentation, PropertyCure will ultimately provide clients with a new dashboard from which they can enjoy an overview of their property preservation and claims processes. Pajon explained that historically the databases, image repositories, vendor management systems, and others used by clients don’t communicate well with one another. Hence, the need for multiple portals within RES.NET. But this will all be improved with PropertyCure’s implementation—it will go live with select clients by the end of July.
Pajon said relationships with hedge funds and investors in the Wall Street space will be another focus for the company in the days ahead. “[They’ve] become more of the end decision-maker,” he said, explaining that right now he sees these industry influencers trying to acquire nonperforming loans, meaning they’re in need of good valuations to ensure they’re getting a good return on the investment. Pajon also points out rental prices are currently high, so the company is training all its agents how to do rental analysis reports in an effort to offer additional value to their clients.
Suffice it to say, no matter what USRES has to weather in the future, Guenther and his team will continue to trust one another, to uncover clients’ pain points and, well, maybe even invent a new way of doing things, if that’s what the climate of the industry demands. “We listen and we come up with solutions,” Guenther said. “Whether it’s by hand or technology, you’ve got to be able to do it differently.” Major points, Coach.