Part 2.

Joining us today is John Sterling. John's been in a number of markets and was previously with Keller Williams and most recently was in San Francisco California and is currently in Colorado. John's background is fairly extensive in real estate. John is known for his work in Europe and London as well as working with multiple team leaders and market centers and helping them attract agents. John talks at length about his challenges in real estate and really not really getting EXP at first. John I'll give you his insight in terms of why he ultimately moved from Keller Williams to EXP and he hasn't regretted it and never looked back.

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Remember our disclaimer: The materials and content discussed within this podcast are the opinions of Kevin Cottrell and/or the guests interviewed.  This information is intended as general information only for listeners of the podcast. Listeners should conduct their own due diligence and research before making any business decisions. This podcast is produced completely independently of eXp Realty and is not endorsed, funded or otherwise supported by eXp Realty directly or indirectly.

• EXP innovating and game changing technology made simple
• EXP Stock valuation explained
• Revenue share versus profit share
• Expansion Teams Simplified
• Fears and worries of competitors
• Other big companies reactions to EXP growth
• Non bricks and mortar game changing
• EXP eliminating layers of expenses through with new virtual technology

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If you are interested in learning more about eXp, reach out to the person who introduced you to eXp or contact Jon to inquire or ask questions.

Contact Jon Sterling

Phone call or text at 720 605 1063.

Email: [email protected]

Transcription

Jon. So that was the answer to the technology. So the money the technology. We talked a little bit about you know privately held versus publicly held. Another note on that one place where I've seen some pushback and one of those half truths or just like something that wasn't fully explained or isn't still isn't fully explained as when we get attacked for not being profitable. Right. Because a publicly traded company would have to release your finances so anyone could go check on your health anytime they want. That's a funny attack to me. It demonstrates that people who are saying it just are lacking some basic sort of fundamental knowledge about stock valuations. Somebody who's a really great example there's been in the news over the past couple days. Amazon. You guys heard on Amazon right. Well they hit one trillion dollars in market cap yesterday and they had huge revenue and free cash flow which they reinvest in their business. Instead of declaring profits for many many years they didn't declare profit at all. They found a way to essentially get their tax bill down to zero because they're putting everything back into the research and development. All right. So it's like are you going to bash a trillion dollar company, the world's second trillion dollar company because they're not declaring profit. It's like give me a break. Watch everything else grow. There's like a problem take care of itself. Right? And the reason that the stock valuation continues to improve is because the stock analysts understand this. The company doesn't have debt like we're not taking on huge loans. We're not doing crazy stuff with her money like it'll naturally work itself out. Another great example everyone else is uber profitable Uber is? it isn't. They lose money every quarter. How many billions of dollars there worth? I don't know the exact number but you can look it up by the time we look it up I'm sure it'll change. But anyway so that's the whole point. It's like it's what's wrong with copying those strategies. Some of the fastest growing and most valuable companies in the world aren't declining profits. Why would we? Go reinvest. Make this the place that's going to sustain the next shift in the markets. And any other change or the show up because we have the right people the right attitude you know the right sort of base to weather that storm.

Kevin. It's one of those things... I'll touch on it and I am not the CFO of EXP I have no relationship to the board. And this is not a representation on behalf of EXP. This is just me understanding profit loss. You and I went through many many many many classes of market centered financials and understand PNL in the real estate world. I also know it from my nine startups I did down in Silicon Valley I understand how to look at a growth company PNL. So one of the things and if this is where you're hung up as a listener you reach out to me and I'll be happy to walk you through it off line. But the general gist of it is if you look at Generally Accepted Accounting Principles or Gap principles a company like Expedia or any other growth company is going to end up taking charges that are non-cash against the hard cash items in a PNL. Right? And this is not an accrual versus cash basis. This is just when you get to the bottom line. If you look at the financials and drill through you'll see these gap adjustments what are those things right? You look at you know the logical ones that if somebody took accounting they heard over things like depreciation. The big ones for our growth company are equity stock options non-cash awards and things like that. Obviously as John talked about there is a lot of that going on at the EXP. It does not affect cash flow in the business. It is something that is taken against income and is an offset. So in a recent Financial I looked at... Let's just say the number was hypothetical to say the number was something in the order of magnitude of 20 million as a loss after the gap adjustments. 16 million of the 20 million were the gap adjustments. So somebody on Facebook comes out and says Oh my God I lost 20 million dollars. So if a growth company post that in 16 million of those paper you should be looking at the four million number and you're looking for things like are they adding to cash flow or are they making improvements. What was the number like a year ago. Based on the pre gap adjustments. And this is a big part of what the industry doesn't understand about a growth company. Is when you're hitting a hockey stick, the growth year over year is so big that you know you'll hear others in the industry talk about residential brokerage specifically. While we do this many transactions, our set of agents that are in this space. Did this many and that's more than a company like EXP. What they're not realizing is the week over week growth let alone the quarter over quarter growth is basically vertical. And so as a result there is a lag. Right. When John moves over or a team moves over and by the time they close out the business with the old brokerage and they get new business on the books and that business goes through marketing its listings and then gets closed and then gets booked. You have a lag. So when they're looking at these numbers what they're doing and I call it playing with the timing they're looking at the old numbers not projecting what the new numbers are. You know I was at the EXP shareholder meeting and they put up a slide at the shareholder me it was public information and the room went... collectively a big gasp because many people in the EXP didn't realize it was growing this fast. They knew we're adding agents but the general gist of it was they talked about transactions that were either closed or pending as of the date of the shareholder meeting in April and it exceeded the entire number for the whole year, previous year. So in other words this was in the spring of 2018. That number as of April was higher than the entire number for the entire year in 2017. Brokerage companies do not do that. Growth for the number one franchise system is like 2 or 3 %. You're not talking about them saying in April that they have more booked pending and closed than they did in the entire previous year. If you're wanting to understand a little bit more about what this looks like happy to have a conversation with you. Gene Frederick would be happy to have a conversation with you. Do what John did which is dig into the material and get the real facts. I mean I saw a post on social media about this which is your sort of very honest and candid post which said I was basically skeptical and I was listening to all the rumors and innuendo and misdirection and when I got in here it was a whole different picture and I'm sure you'll get getting calls about that from people because you're very well respected not only within Keller Williams but within the industry. And I think it raised a lot of eyebrows when John Sterling decided to move.

Jon. Oh yeah. It's finally the number of private messages I got versus public reaction to that post which I guess it's predictable. But you know it's like people that are in transition. They were you know in the process of joining us like they don't want to put their you know it's like they're pending deals at risk or they just don't want things to get weird in their local markets. But you're right. I mean it was just kind of... it was just one of those things it was like. I thought I knew it all. I thought I understood it. I thought that what I was being told by the previous company was true. I was like Of course it's not all the way to you. It feels like those days when we were the pioneers at Keller Williams and then you know there were these very coordinated efforts and outside consultants that would be hired anytime we came to town and they had all of these pretty prepared sort of you know objection handlers. Well you see how well that worked out right. It seems that they have slowed down Keller Williams growth. It's like give me a break. It's like one hundred eighty thousand I'm a runner. So again it's like people are going to come at their own pace. I get it. It's not for everyone which I don't think it will be but it's gonna be for a lot of people. I've never seen growth like this. I just kind of digging into the financials doing my own research as you mentioned. It was more than just looking at what was publicly listed. You know it's like I'm going to talk to these agents that I know it's like. Tell me about their business. What's changed to see if the growth that I think is true has you know anecdotal evidence at the local level as if I know somebody these people and I've been around forever they're straight shooters. You know they don't have any problems with their license and everyone respects them feels like those are the folks I'm talking to the ones who were going to give it to me straight up there's something unfavorable or unflattering they would tell me. And there were only a few things that were just minor annoyances. There were no big red flags no matter who I talked to or in the country they were. So I kind of made that part easy.

Kevin. Absolutely so I want to get your take on something John obviously the big announcement out of Keller Williams at the mega camp right. You know you're familiar because not only did you work with team leaders and others within the system you know a lot of OPs you know a lot of regional directors. They announced and most of the industry I think really understood the implications of this. Essentially what I call a gift to the expansion teams right. We'll see how they actually execute on this. But you know there's a lot of... and I think this is kind of like in the high tech world from Silicon Valley where a company that's big will preannounce something and then you see whether they can actually deliver on it because they want to kind of get ahead of the market and say well we're going to do something virtual or non bricks and mortar too. What are you hearing about that. Because I'll tell you first what I'm hearing which is you know the expansion teams are beyond excited and we can talk about that a minute why they are but the number of agents that I know that are not either wanting to play on that field meaning they're not going to be an expansion business organization or that's not their desire right. They're great mega agent they have a team they're in a market center they're concerned if they have to do execute on this about creating an unequal playing field what are you hearing.

Jon. So just got a big picture I could first. I mean my first reaction to that was is it it's something that the 12000 agents.. that 13000 owners or whatever ever we have now compared to 180000 that Keller Williams is not reacting to what seemed to me to be bigger threats to them like better funding like compass right. Some of these places that are taking market share and gobbling up the world right. It's like you have these players out there and Keller Williams isn't really talking about them not publicly bashing them anything like that. I've never heard the company like publicly bash or publicly oppose an organization especially one that seems so small and insignificant. Right. So it's like that's very telling by itself is the fact that they're reacting to something that is so small compared to them. I mean it's less than 1/10 the size you know. Is there any other... like is Amazon reacting to you know it's like little little startup online e-commerce store. Well you know not as a big deal but they probably have it seems like it about it but they're not out there publicly bashing this little thing that doesn't seem like much of a threat. So unless we're we're a real threat or a real reason why would there be public bashing and why would there be so much copycat stuff going on. So that was just an interesting sort of twists right. As you said it's like the expansion teams they're thrilled because it's essentially removing a lot of the politics that you get in a franchise you know it's just a lot of headaches if you're trying to expand your team to new market because you have to get approval from all these different levels and you have to get buy in from all these levels. You have to get because otherwise these these owners and these managers that are either short sighted or they want to remain the kings and queens of their franchise territories or whatever stand in the way or they just don't understand it. They don't take the time to go to their expansion classes and all this other stuff. And I was one of the few dozen people in the company who was certified to teach that team expansion haptic course. I got to interact with a lot of these folks and I got to talk to a lot of OPs and team letters about it's like just getting there understanding what's going on. And I've heard a lot of opposition people will like this expansion stuff is kind of a headache. We got a lot of people run around or supervise big risk to our license. So the expansion teams are great because it kind of clears the runway for them. They're happy that they don't have to interact with the problematic franchise owners and managers anymore like they can just go around the system. So where that all falls apart is because you have these layers of ownership you have the local franchise owners you have the regional franchise owners which the are last time I counted 33 of them. So basically they cut up the US the 33 territories. So all these people are getting a little piece of the action whether it's the local company dollar or franchise royalties or some combination right. So those folks are the ones that I've heard the most from because they're terrified. I mean they're locked in these either five year tenure agreements with their franchise and they can watch the whole thing unfold. You know if they've had a monopoly in their area.. you want to work in that city you're going to work with Keller Williams and you're going to be working with that markets that are like no options. Well now people have an option and that's scary to them. And what's even more scary is they might not be able to get out of their franchise as well as the housing value. So it was like they might have four years before they're up for the next renewal before they could feasibly sell it or dissolve it or whatever they need to do.A lot of people they'd planned on there franchise ownership being a retirement plan. So they wanted to build it to a certain point and sell it and hire someone to run it or whatever. But if all of that value has a risk of going away like who's going to write a check for that now. Like you know like I was around during the last boom that looked like this when we were buying up market centers like crazy we paid top value for a lot of these things where we could see the opportunity it wasn't necessarily there was like There's no way we'd be writing those checks today. It's like considering what's going on if there's no real value to the franchise territory if you're going to be stuck with these huge leases that's all your risk. I mean the way the franchises work is you give the franchise or person who's selling you the franchise give you permission to use their name. You give em a bunch of money for the privilege of taking all the risk for signing all the leases with personal guarantees for hiring all the people who are signing up all the insurance all that stuff and then after you paid for that privilege you got to pay the franchise or a percentage of your revenue before you even get paid. They're getting money off the top. So they take no risk. They get paid before you get paid. Which I think suddenly has caused a huge bump and interest in EXP because we don't have any of that. We have no franchise fees. We have no franchise territories. We have no regional territories none of it. So you've cut out all that nonsense. So it's not just the politics. You don't have to navigate anymore you know the money makes sense and the technology is good. There's no limit to it. You don't have any problems sort of convincing the local ownership that you're a valid person and you need to be in that market. So the virtual thing was a real interesting one and kind of lit up my inbox for a few days so people be like OK you know if I needed to walk away from my Keller Williams franchise How do I join you. Like what's the cleanest way to do it. Like know I'll talk to your lawyer but just like the fact that people are asking those questions is certainly eye opening for me.

Kevin. Well I have a little bit of a different take on it. You know I've talked about this before and I think you know the story is the average Agent Market Center. It could be a rainmaker for a small team that's not going to go expansion or a agent that just knocks out of the park with lead generation those people even within a market center have the ability to disrupt things they end up doing so much mass lead generation that they could disrupt things we did this in St.. LEWIS Right. I moved in from out of the market I got ramped up and I had five buyer agents we were launched the real geeks Web site I mentioned in St. Lewis we were getting 500, 600 leads a month on that organically. This is before you know Zillow, Iconic etc took those No 1 slots with some changes in the organic world so you could imagine that if you walked around the market center and queried agents of their biggest frustration the answer was that control team has all of our leads and we're not very happy about it. And this is where my concern would be for an agent. If you're listening to this let me tell you what happened and then let Jon tell you what will happen in the New World. I was talked to by the OP and the team leader and I was told We love you. You're doing fantastic things but this is so disruptive to our market center. You need to leave. I was kicked out of Keller Williams for knocking it out of the park with lead generation. So now if the franchise system sets up a statewide brokerage operation the model for expansion is you know that whether they call it a grid or a big MSA. Each team brings in.. And the model is bring 10 to 20 people in right. You hear Adam talk about it that's certainly his model and you know Tim and everybody else and Ben all do the same thing. So now what Kevin did in St. Lewis is on steroids with multiple teams now the difference is as you know and I'll ask you this Jon because you actually taught expansion if the brokerage is state wide and it's not the franchise, Who are they going to complain to if I'm the agent the market center that is actually gonna be doing do anything.

Jon. Well that is the question I can only guess what the rollout will look like but if it's anything like what I'm thinking it's like so you have certain legal and compliance things to just think about right. So you know each state is going to have a broker kind of like how we're set up at EXP then that broker it's really that brokers licenses the one at risk if somebody misbehaves. So I have a feeling that that person is going to get a lot of this pushback or whatever where I think it's going to be real telling is what is going to happen to these franchise owners like they were sold one set of circumstances and one set of things right. I can't speak to what is inside the franchise documents because it's been a while since I looked at one last time I looked at it. You know it's very clear that you know they're like phonebooks incredibly thick things. So it's like there you know you have these big application and then whatever whatever. There are certain representations that are made by the franchise or that if there's a virtual thing takes off and they executed the way people think they're going to execute it. That's I mean that sounds like class action territory to me. I don't know there's that has been a term that has been used by several existing OPs at Keller Williams Amazon and they're just friends of mine who are like What do you know about this. My dad's not a lawyer I can't give you any advice but sounds like you should get together with your friends to see what you can do because it just doesn't make any sense that a dramatic shift from.. OK... You have a franchise territory and it's totally under your control and we're not going to let anyone open up anywhere close to you to protect that territory to now they've just erased all of that with one announcement.

Kevin. The point that I'll add on top of what John said is where the agents could have political power collectively within the office in a franchise model if they're complaining about somebody they might as well work for another brokerage which they will technically. And so the mount of influence that OP or a team leader would have over a statewide virtual brokerage operation. I'll just go out and say it. My expectation is it'll be zero. And so the agents that I'm hearing from and you and I both knew a lot of them. This is what they're terrified about. They're terrified about the fact that hey I've been in this market for 10 years. I'm 15. I built up a great reputation and I don't want to have unequal playing field that I'm competing on where they've got better economic terms better caps better structure and then I have zero say over it. And here's the number one thing I'm saying is like I'm hoping that this is something that they announce that they'll have such a difficult time executing on that it'll never come. But I don't know that I can stick around here and support this if they basically bring in a competitor under the same flag in a different brokerage that's going to try and crush me in my operation.

Jon. Sure. And that's the part that was unclear or like just objectively not bashing their plans by any means but objectively I don't know how it made any sense to only be opening up that virtual brokerage option to the chosen ones. I mean that's the kind of political stuff that is again filled by inboxes since I moved people out like I'm just so tired of the regional stuff and the Nationals that all this stuff being pushed down on us is like we just want to sell real estate like we don't want to talk about you know it's like how many bodies can we cram at the door etc. etc.. So it's like I just don't get how you can continue to be such a massive player when you're still ordaining people as worthy or not worthy to be part of the new generation. All right. And agents aren't stupid they're gonna figure that out and it's like they feel like they're being shunned we're being insulted twice like first when they weren't invited and secondly now that they're you know all of the advantages that they had from being the local expert are starting to evaporate. What's that going to look like. Like I have a pretty good guess and I moved my license accordingly but I don't know.

Kevin. Yeah it'll be interesting. My expectation is we're at least 12 to 18 months out before you see any significant traction if even that early.

Jon. Yep another big question it's you know put fear in a lot of people is what happens the profit share right. If you keep whittling away at these caps and everything goes cheap or free it's like oh there's no company dollar. That means there's no local profit. That means there's no local profit to share. So all these people that a you know bet on their property are continuing to grow... Again maybe there's some sort of elegant solution they thought of that I didn't think of but it's a real concern with a whole lot of people so I know I'm not the only one asking that question. They're smart people they run a good operation they built something pretty amazing. I have a feeling they'll figure out something. But I just don't know if it'll be in time or sufficient enough because they're working with a fundamentally obsolete model in the first place.

Kevin. And I would echo what you said which is they have some of the best and the brightest both at international and in leadership that if there is a team that's going to figure out how to execute on that they'll figure it out. And I have the utmost respect for them. So I think that we'll figure something out. My bigger concern is the better they figure out the more chaotic it is to the actual franchise system right.

Jon. Yep. Again I like to take the long view on these things because I'm still fairly young. Hopefully I have a lot of working years left. So I'm looking at 10 15 20 years in the future. If the result of all of this is that fees are lower for agents and service is improved for agents which allows us all to do a better job at servicing our customers than I think that's a net win for everybody. Right. There's always going to be competition. It's never going to be everybody works for one company. Right. It's never gonna be anything like that. So if there are five big players and a bunch of independents kind of like what we see now that would be OK.. if it raises the bar for everyone in the industry that we're going through this process and figuring out the virtual model and figuring out compensation packages that are more favorable for agents like I think that's great. I think it's healthy competition is healthy. I mean it's just part of how capitalism works. You know if we had no competitors that's what we get lazy that's when he get sloppy. So you know that your next competitors are always right on your heels should you take a rest and stop innovating when you're in trouble. So overall this whole thing is going to work out well for the industry and you know time will tell. Who were the big winners are.

Kevin. Well absolutely and you know you can look at it on a broader basis and obviously there are announcements coming out that big franchise system may try and create a consumer facing portal that'll take on Redfin and certainly they may get better fruit their overall long term because they've got a better agent base. I mean if you look at specifically Redfin and you dissect their financials one of the things they have to struggle with is finding enough people internally to work as an employee. You know if you look at a system like EXP where we're adding 1500 and growing agents per month the growth rate the exponential growth that we've talked about who basically overtakes all of these entities in a very short a time and you know as we start to get better traction. Talked about earlier on the independent side that just doesn't stop. So when you look at what the overall industry should be worried about is you know if bricks and mortar is going away and I believe that is I'll get your take on it the second there's going to be a number of big huge shifts in the marketplace in this model where you're a non bricks and mortar better service better tools better platform is a great hedge against somebody trying to force the industry into an employee dumbed down comp pie on limited earnings model and because we're growing so much faster they can't get enough people to take them up on the offer to go sit in their model and make a lot less money than the top people in the industry make sure.

Jon. Well no particular example you know or I think is going to would help them actually find some people would be a major shift in the market. So I remember talking with a team owner. She's had a team for a very long time. I won't mention her name. I have permission. But anyway clearly prolific you know we'll call her real estate famous lady. So she's got a team heard decades like before teams were fashionable and she figured it out and she said when the market was hot all of our agents wanted to be on a commission structure so they could make more money. And then when the market cooled off and it took more effort and more time to sell the house everybody wanted to be on salary. So she sort of goes through waves right. But I can see you know if you're running a salary model which you know the people drawn to it are generally not high producers that you would benefit if the market were to soften. And it takes more effort and skill to get deals done because people are going to sit on that salary. They'll be OK. Like having a salary and a small bonus versus keeping most of the money. So I think that would be interesting to see. I mean we're not seeing signs of the market really slowing down. Besides the regular seasonal stuff right now it still looks like we have money is still cheap cash still way more buyers than houses of most metro areas in the U.S. there seems to be no clear immediate solution to that. So yeah so is it getting away from bricks and mortar. I mean that's inevitable. It's happening in every industry. Like I don't know why you wouldn't expect that in real estate just because you have so many people who have built their lives and their brand around a physical location or they're just owners who aren't tough enough to stand up to their agents and say No you don't get a big cushy corner office anymore because you don't need it. It might say they think they need it or they think they deserve it but it's really it becomes a retention tool for some of these these brokers to just absolutely spoil their top producers because they know they have all kinds of better options out there and they're willing to pay to keep them engaged.

Kevin. Yeah absolutely. Absolutely. I mean it's definitely something where I don't let those going to be 5 years from now or 10 but I think you can easily project out that bricks and mortar virtually nonexistent. If you're an agent thinking that this is all about your awesome office that you rarely go into. It's a great convenience now that you pop in there every once in a while. But between that and staffing and duplication across multiple offices it's the reason the brokers don't make any money.

Jon. And it's eliminating all of those layers of expenses so we are able to keep the things we charged or even so low. You know it's like we don't have a lot of over to cover. We don't have managers and owners and regional people or offices and everything else. And we just did all of that has been eliminated so we can return those savings to the agents. Makes perfect sense to me.

Kevin. Absolutely so John I ask this of every guest that comes on here and I know you know this I'm going to have you give me some final thoughts and then I want to get your contact information in the best way to reach you. If somebody is listening to this and wants to have a chat with you directly what are your final thoughts. What have we not covered the one to hope that we talked about today.

Jon. Let's see. I think we had a pretty good chat. The whole revenue share versus share stuff. It's been interesting to hear people onstage and once they do talking about how well we tried revenue share and it didn't work for us Back in the 80s and 90s therefore it's never gonna work for anyone like we've already figured out that that's not an option. It's like OK that's fine. Like if you want to defend the property system because revenue shared and work for you. That's fine except there's a hole in that argument and that's not the whole story. So when this particular company went overseas a few years ago they rolled out a new program that wasn't profit sharing. It was a revenue sharing program. So if it didn't work in the 80s and 90s and you're saying that anyone who tries it today is going to fail because it doesn't work then why in the world would you have rolled it out five or six years ago. It's like that's way past the 80s and 90s and it was championed as an improvement on the current property system. So again that's not a story that's told in any of the groups that are fiercely defending their way of life but it's just one that I want people to hear.

Kevin. And that's a great point. I mean the other fact when you and I were around I think I was around a little bit longer than you and certainly Gene Frederick's been around even longer is the detail that's left out which is that was based on bricks and mortar and a fully staffed operation and it was done when you have a couple of hundred agents at most. And you know I think most people would agree and I know you would and I would because we've talked about this that somebody tried to do a revenue share model with physical location of bricks and mortar staffing and all of the overhead. It's not going to work.

Jon. No. The simple way to think of it is like the math doesn't work because you have too many expenses you'll never be able to keep it afloat unless you're a massive organization right. And even then I'd like to be massive with a traditional model you can have a massive space and more staff people so it breaks every time you try and make the argument for it. So but with a virtual setup it's wonderful. Like I've seen the number. I know we're not allowed to share it. I'm hoping they're significantly bigger than the ones that I was seeing with the previous system that I was part of.

Kevin. Absolutely so John you know and this is for anybody here that's been looking at EXP. They're excited about potentially talking to you. We're all agent shareholders we're all pointing in the same direction. I'm going to have you give your contact information and for anybody out here, Here's essentially what you don't see behind the curtain which is we're all here to give you the best available information. If you want to reach out to John he's going to give your contact information and he's going to send you right back to whoever you've been talking to and whoever introduced you to EXP. So don't feel like you're doing anything you shouldn't be doing there's plenty of people out there to talk to you feel and reach out to me and get a hold of Gene or anybody else. We're all here to help you finish your due diligence. So John how would somebody reach you and connect.

Jon. The fastest way is to text me by phone number is area code 720 605 1063. If you prefer to write a novel. Via Email that's fine too. It's Jon JON so no H. [email protected]. And just as a side note. As like. I talked to people all the time. Who are probably not ever going to join the EXP. Can't say never but it's like they have no intention of joining they just want to do some research and get my take on it. I'm always happy to have those conversations The way I look at it is look like you may be completely happy your company have no reason to leave or contractually bound to them for the next 5 7 years whatever. All I want to do is be sure that you're getting correct information so you can make the right decision. Like don't make your don't make your decision based on propaganda or what a competitor saying. It's like I'll get the facts. Right. So. If we're not your number one choice I just want energy for the number two spot.

Kevin. And that's perfect because I can tell you that you know both Gene and I and everybody else that has a lot of conversations has had an interesting dynamic occur. You know sometimes it's not them but all of a sudden you get a call from somebody or a text and said Hey I talked to John Smith and I know you were speaking with him and he said hey you know what. I should follow up with you because I think this is a good fit for me because if it's not a fit for them it's potentially a fit for plenty of others.

Jon. So that's a small industry. We can all use more friends in it regardless of company affiliation. So I will carry that attitude with me forever.

Kevin. Absolutely John. Thanks for coming on and I appreciate your time today. Thank you. .

Jon. Thank you.

Joining us today is John Sterling. John's been in a number of markets and was previously with Keller Williams and most recently was in San Francisco California and is currently in Colorado. John's background is fairly extensive in real estate. John is known for his work in Europe and London as well as working with multiple team leaders and market centers and helping them attract agents. John talks at length about his challenges in real estate and really not really getting EXP at first. John I'll give you his insight in terms of why he ultimately moved from Keller Williams to EXP and he hasn't regretted it and never looked back.

Learn More about eXp Realty - Click here to watch a quick 7 Minute Intro Video.

Remember our disclaimer: The materials and content discussed within this podcast are the opinions of Kevin Cottrell and/or the guests interviewed.  This information is intended as general information only for listeners of the podcast. Listeners should conduct their own due diligence and research before making any business decisions. This podcast is produced completely independently of eXp Realty and is not endorsed, funded or otherwise supported by eXp Realty directly or indirectly.

• Why EXP is growing fast
• Why Successful independent brokerages partnering with EXP
• Keep your Brand, grow your income with EXP
• Big benefits of being at EXP
• Earning publicly held stock. EXP listed on Nasdaq
• EXP innovating and game changing technology made simple

Stay tuned for Part 2

Transcription

Kevin: Welcome back to another episode of the EXP explained podcast. I'm joined today by special guest John Sterling. John's been in a number of markets. He was previously with Keller Williams and most recently was in San Francisco California and is currently in Colorado. John's background is fairly extensive in real estate. He and I met years and years ago when I was a team leader at Keller Williams and he was doing some leadership expansion and attraction of agents. Certainly if you're listening to this and you're from Keller Williams you're more than likely will know John from his work in Europe and London as well as working with multiple team leaders and market centers and helping them attract agents. John talks at length in my interview about his challenges in real estate and really not really getting EXP at first. So if you're a little bit skeptical and you want to hear from somebody who was right there where you were dug into it didn't pay attention to the rumors and misinformation in the market and did quite a bit of due diligence over about 15 months. John I'll give you his insight in terms of why he ultimately moved from Keller Williams to EXP and he hasn't regretted it and never looked back. Stay tuned for my interview with John Sterling.

Kevin: Welcome to the show John.

John: Hey thanks for having me. Happy to be here.

Kevin: I'm looking forward to it. We are reunited again and I'm sure we'll get into a lot of that on the conversation today but before we do for people listen to the podcast that maybe you aren't familiar with your background and history and real estate and all that you've done. What did you take a couple minutes and just give a little bit of your highlights in terms of some of the stuff you've done. Because I've known you a long time and I know you've accomplished a lot.

John: Oh well thank you. Yeah I'll keep it short and sweet. So I started my real estate career in Chicago back in 2002 it was with a traditional firm then they had a great training program. So I got up and running very quickly. There were some changes there so I went off and started my own brokerage after about two years and then eventually merged that with Keller Williams back in 2004. My time at Keller Williams was mostly spent opening up new offices and markets where we didn't have them. And most of that work was before the financial crash and after the crash I was the guy who would go fix these struggling offices. So it involved a lot of moving. So I got to go all over the US and then even opened up our London office. So I was in the UK for two years. Packed my flat on Brexit vote day and came back to the U.S. and had been engaged in real estate and just sales in San Francisco and Denver ever since.

Kevin: Fantastic. And you're very modest. I mean I first ran into you I probably was about two thousand five or six when I was in St. Lewis with Keller Williams And you were part of the group that was essentially acquiring market centers and expanding and you guys were rocking and rolling and obviously lots changed for everybody after the market shifted. I was excited and it was a long very detailed due diligence process before you moved over to EXP you and I had conversations over I don't know probably 15 months or so. And I think for people listening because the whole genesis for this podcast is to allow people you know it doesn't have to just be a Keller Williams but people that run their real estate business like a business and are seeing all of these agents like you were changing brokerages and coming over to EXP. I remember like you like everybody else had healthy skepticism. You wanted to understand it you were from the outside you were part of a gigantic franchise system and there was a lot of misinformation and noise out there in the marketplace. What is it that you learned that really caused you to start to shift your mindset and say I need to dig into this further.

John: That's a good question. As you mentioned you know it was a long process for me it wasn't an overnight type of thing and I'd been paying attention to EXP for a long time. In fact I remember when Glenn the CEO was with Keller Williams back in the late 2000s and he left the start yet. And it was you know I just thought it was an interesting move and I was doing some unique things in the business but didn't really give it much thought. I was happy. Keller Williams still think they're an amazing organization. So I don't have any you know any issues with Keller Williams. It seemed like a better opportunity and fit for the future that I want to create and kind of where the business is headed so the things that got my attention over the past few months and ultimately led me to making the move is that you know I had ignored EXP for a long time as you mentioned a lot of people do this. And the people I've talked to who are in the process of joining you know people who are my friends who never would have given it a second glance if it wasn't me calling. You know it was or someone else. The gist of it was there is a lot like you said misinformation or half truth is I'd like to explain it which is understandable. You know it's like EXP has come out of nowhere. I have never seen growth like this in the real estate business and I was with Katie when I early days when it was growing like crazy. But even they didn't see growth. This is great. So there's just a lot of fear from the incumbents that they're going to get squashed because if he keeps up this pace then they're going to have some serious problems.

Kevin: So it is interesting I want to touch on one point because that is something that you know you hear the comments of well they can't keep up growth at this pace or I can't believe they're growing that fast or there's no way they could be growing that fast. And I'm going to touch on something in the franchise system you know there's very well Gene Frederic knows it well I know well we'll come out of the same franchise system when somebody goes to expand a franchise system, this is for listeners to understand and why EXP can sand grow so much quicker. I'm going to contrast the two let's say that John and I are in the franchise system and we decide we're going to open up an office in Palo Alto California and we get a conversation going with a great great huge player hugely influential big producer and the producer says hey John and Kevin I'm ready to join. I want to do something with you. How do we get started in Palo Alto. And that starts the clock in the process right. And they have to go through the approval process and there's a whole bunch of steps involved in the point that I'm making here is from that conversation assuming you get some sort of a green light go I'm willing to do it. There are steps like getting an investor getting it approved getting the franchise awarded in the net net on it is on average it's 14 to 18 months before mega agent key influencer walks in the door of an office or can announce that they're part of that Palo Alto location hypothetically. Now when John and Kevin have a conversation with that same agent in Palo Alto. And assuming they're excited about the EXP and they due to due diligence. We're having them change brokerages in as fast as 10 days. I mean you listen to Brent Gove's interview. He made the decision in 10 days or less with one hundred and fifty million dollar team. It's unheard of. In the franchise systems. Now the follow on to that is when like we had in San Diego we had Daniel beer Carl Wessel and Mary Maloney and all of the others joined in it like a really short 10 day period EXP because they're influential has tons and tons of agents joined after it. So for somebody and I want to get your perspective on this from the outside we you're seeing these mega numbers of agents right. You know a thousand plus fifteen hundred plus agents a month and you are. In the franchise mindset or a bricks and mortar mindset where you're used to being in a physical location. Many many people. And this is why I think that they talk about this. Not being sustainable. Look at it and go. There's no way they're going that fast. We never did. We can't. How can they. And I think that that's the driver is John and I can go out and have hundreds if not thousands of conversations as well as every other agent that EXP. And if somebody says go. It's like when you say go it wasn't very long before you were alive and over at EXP. You actually were waiting for some things. To occur in your business world. But from the process where you're like OK good. I'm ready to go. It was fairly quick. It wasn't like the franchise world.

John: Yes. All of that's true. Interestingly enough probably the most fascinating part to me is the large number of independent brokerages so they're not affiliated with any franchise or big regional company. You know he could be one person or a few dozen agents. You know it's typically the size of these things of those types of organizations that are going to need EXP. That was eye opener for me too because it's a fairly common thing in our business for people to get a little experience and then decide they'd like to be their own boss. They want to be their own broker so they leave the company that they started with they got some training or whatever else they're no longer working under someone else's brand they start their own. So it happens all the time. So the fascinating part is how many people have gone through that process achieve their independence so they have their own business with their own branding and their boss their names above the door. I can tell everyone in our neighborhood that they own the company and they're still coming to EXP. So they are profitable businesses that are doing well. They're helping businesses that are growing. Everybody's happy. And even with all that they're still choosing to partner with EXP. So they just see that there is more value with EXP you know from a small item I'd have to pay every year through their split the system was just good for agents at any level. But it's the big winners are the ones who were showing up with teams which are essentially you know they could be standalone brokerages but these big agent teams are like you mentioned they're moving very fast. Then you have the small brokerages who are looking for some more leverage because if you're a brokerage that has 20 or 30 agents you're probably still selling right. It's probably not making enough from the agents splits in order to support yourself. You're probably still selling yourself. So that's just a lot of work. Like you have to manage all these people and you have to do your own business well with the EXP you get to leverage a lot of the stuff that's already built in for very low costs. You can send your agents the training or bird virtual campus any time you are reading online. You can then go hire more people because you don't have to babysit them all day like there's no 30 or 40 training events we have every week. I don't think you can just sit down in front of the computer and say OK here are the training you need to go to go to these and come to me with questions. It's much more leverage and just a much better way to scale. So that was an interesting thing that I discovered just as I paid attention to all the people who kept showing up.

Kevin: So absolutely and one of the things just to echo what you're saying and this is happening all the time in fact there's one by the time this goes live that's in the Dallas Fort Worth metro. They have ninety five agents. They're an independent and you know the model is almost this hybrid model which we're seeing pop up more and more where the broker/rainmaker is a weather pick your flavor. Right. Zillow preferred or premier whatever the program is and they feed their agents. And so the lead gen side they've got wired right they might be spending one hundred thousand dollars a month in this case. And what was interesting is she was so excited about EXP. Her biggest concern is I don't know if this is going to translate throughout my key people right? My leaders within my office and then the agents downstream. And what was interesting is Gene and the leaders were in town meeting with this Rainmaker and the key people and he called me yesterday afternoon and his conversation is "I only stayed half a day because they all get it. I met with a handful of people". I talked to him again this morning and he said we're done all ninety five or come and they're just basically working on the onboarding process with ninety five agents making sure everybody's applications and the revenue share piece is set up correctly. That is the wave of the future. I mean I've talked with people within the company they're talking to 25 agents smaller brokers and the driver for that. And if you think about the NRA numbers 55% of the agents aren't independents right. It's the biggest piece. We spent a lot of time talking about franchise systems. They're more in franchise system likes to tout that they're number one but you had the agents that are at independence. It's way bigger than they are. And so when you look at the opportunity this is the next big wave that's occurring. And you talk to these broker owners I'm talking to some in the United States in the southeast U.S. And the number one thing they say is they love being producers. They love mentoring and training agents. They love the Legion and helping people in the case of this this gal in the Dallas Fort Worth area. She'll be on the podcast shortly but what she's going to tell you is I don't like being a broker. I'd rather be brokered by EXP get out of compliance get all the systems and all of the things in place and just go do what we do well the brokerage stuff is not sexy. The brokerage stuff is not fun. The compliance stuff nobody enjoys. Previous to EXP it's been the necessity right. You didn't have somebody that said hey keep your brand keep your look and feel. Go do what you do well and then we'll take over all the other stuff.

John: So it really is the best of all worlds. And I think that's really I mean just spending years and years.... I mean all again all over the US and even in Europe. One of the hardest things to overcome when you're having conversations with people about joining your company is it's really just ego. They like that their name is above the door. They like to tell everyone in their world that they own the company and the fact that that's happening at EXP is very telling. We've overcome that objection. You know people are like oh it's like well I could still on my company. It's just kind of you know using some of the EXP stuff too which is great. I mean this is it's a huge advantage for us just because it's you know the more or people show up the more examples we have to point to and say See we told you everything worked just fine except you're you're growing faster and you have fewer headaches.

Kevin: Yeah. You know and part of what you did John is you talk to over the course of when you talked about turning around market centers and moving around there was a long period of time where I consider you a non team leader Team Leader. In other words you were having conversations with hundreds if not thousands of agents but virtually on the phone at conferences. So you've got a pretty good basically a take on mindset of agents. You personally were responsible for many many agents that went into Keller Williams When you look at this.

John: You wanna know my number?

Kevin: Yeah What is your number? I was going to ask you next.

John: I had my office lady look it up before I left Keller Williams. I directly recruited sponsors like brought to the company just me but named me as the reason they were with Keller Williams one hundred and sixty two before I left. And there were many many more of those that like top of a hundred sixty two that I recruited on behalf of other people because that was my job right. So it was really just a hundred sixty two that I found on my own. And then as you know it's like hundreds or like you said I don't know how we'd be able to tabulate that but we'll just say north of a thousand.

Kevin: You've got a great take on this you know so enjoining EXP and you know coming from a franchise system. If I'm an agent. Whether I'm a rainmaker on individual age a mega agent and I'm an expansion agent that's thinking about this. What are the two or three things that you think that. You learned about it that if you were on the phone with these people going forward you would say you really have a couple of options you could go to a franchise system or you go to EXP. And here are the big benefits of being at the EXP.

John: Yep that's a good question. So if I had to put it in bullet form first the money has to work right. You know it's a Financial decision this is a business like we're in business to make money. So we do other things too. There could be a bigger purpose for our you know working in real estate but like the math has to work. So the. That was a good thing for me because you look at EXP everybody is on an 80 20 split the 20 percent caps at sixteen thousand dollars a year no matter where you are compared to my San Francisco office with Keller Williams where I was paying fifty thousand dollars she here is a cap. I mean that alone by you know in two hundred eighty dollars a month in an office these you know it's just a huge expense to be there now. Sounds like you don't have to do to any deals the same let's go to cap but still like I can have that same environments like comparable stuff or even better tools and only pay sixteen thousand here. So that seemed like a much better deal to me. So that was part of that. There's you know a small transaction fee after the after the sixteen thousand but it's nothing substantial nothing to worry about. In addition to that there are certain ways you can earn a publicly traded stock. So it's not privately held. There's not a king of EXP it's all up it's on the Nasdaq. It's a publicly traded company. So for longtime I guess it's a good side note just as far as this goes that EXP was traded on the OTC exchange. So it's just another stock exchange out there. But the trick with that is that it's there's not as much liquidity because it's not like you know we'll call Big Boy exchanges. So really it's like you got to be a publicly traded company you want to be on one of the big exchanges in the US. That's the New York Stock Exchange with the Nasdaq. I go to the two that are reputable and that's where you want to be. So earlier this year another sort of catalyst to me opening up the conversation to joining. Was when EXP was Listed as what they call it. You get up listed to the Nasdaq. So they went off the OTC. Exchange and onto the Nasdaq. You don't get to do that just by choice. I mean you have to be performing well and behaving well and. Know. The analysts and everybody else has to be compliance people the FCC everybody has to. Agree that everything is legit. So I like that. I like that there is some third [arty accountability to everything that we do. Versus you know it's like we have it we have a board of directors into the people on the board of directors are agents that real estate people so they're not just the financial types and the bean counters that you would find them on a traditional board of directors. So when the board of directors of stock analysts and all those people get involved. You know there's some accountability. Versus when you have a company controlled by essentially one person. There's not. Any real accountability I have no piece of ownership and that's I'm contrasting with where I came from. And it's more of a dictatorial sort of environments. So. You know being able to earn stock being able to purchase stock at a discount. I mean. The portion of my commission checks can go toward purchasing. This publicly traded stock and I get it at a 20 percent discount. So basically every deal that I do I'm getting a 20 percent gift from the EXP. It's like I mean you know it's like if you invest in stocks like 8 to 10% consider pretty great. So if I'm getting an instant 20% regardless of how the stock performs feels like likely going to continue to grow then that's good news for me. So those were the big financial components. Oh and then I almost forgot the getting into technology which I'll come back to in a second but the Web sites that we get I mean these are some of the best lead generation sites you can get for your business. We work with Konversion. You don't know them check them out. I think last time I looked to their retail prices were a thousand dollars to set up and then 500 a month just for the system and then you have to pay ads and everything on top of that. But at EXP that's all included in the 50 dollar month technology fee. So it's a 500 a month I'm paying 50 a month. So you don't like anything else about the EXP or you don't care about revenue share and you'll care about the training you care about the virtual world. If you don't want to do your own business whatever you could make an argument that it's just the Web site by itself basically pay for your affiliate vision with the EXP if you want to do any of the rest like you're going to stumble across other great thing that you expected. I'd like that by itself is a good enough argument to make the move so. So that was the money piece as far as the technology goes so we'll continue that thread just for a little background there. I've been involved with tech startups as both an adviser like a formal advisor and an investor for years. In fact I looked it up the first one that I did was back in 2007 was a property portal that was competing with like Zillow to really realtor dot com didn't make it as far as those guys did just it was funding and leadership and whatever else. But you learn a lot through that process. A lot of people understand kind of the dynamics. So I'm very comfortable vetting technology and more importantly not just the technology it's the teams working on the technology real estate in general as an industry as a late adopter for most technology things even today. So for example there's a zip code valuation thing that's clogging my Facebook timeline right now with people asking their clients you send me your zip code I'll give you a valuation. Well that technology has been around for about 10 years now for many years. I was a customer of the company that developed first just as a real time market valuation estimates are now 10 years later everyone's acting like it's some revolutionary thing. You know.. Give me break... it you know if it's fancy tech that's going to disrupt the industry and that's the fancy tech then there's not much concern for me that like that's what I'm competing with. So going back to the teams that worked with technologies I mean the technology itself is great. It's like there's the wonderful stuff I get to use. Everything works fine. I have to worry about it like of course the EXP is going to continue to expand those offerings of course are going to develop their own proprietary stuff. So right now we're just growing so fast that you know the priority it seems to be like we need to be sure our basic system scale. So the people that are joining to get deals done right. Like we'll worry about dressing it up later. But really the team behind the technology is the most important piece for me not just in real estate but like everywhere because technologies involving at such a rapid pace that we're going to have to pivot we're going to have to make changes we're going to have to make decisions that are going to alter the sort of trajectory of the technology that's being used and developed. And it's like I have the full faith in the team the technology team at EXP to get that done. Again it's like we're not a real estate company pretending to be a tech company right. It's like technology's been built in from the very beginning. Right. So it's like yes real estate sales is our focus but it's not a sort of copycat thing after the fact. Thinking hey we need to get on this tech train. I'd like to know I've been tech focused from the beginning. That's where the team's focus has been and so with the company's focus has been that's been our game from the very beginning. You know I trust the team to be able to make the right decisions and keep us ahead of the curve and those sorts of things.

Kevin: A lot of people know this because I've mentioned it before. You know I was one of the first sites up on real geeks when Jeff Manson rolled that stuff out and S. Lewis from my team. So you know you and I are fairly tech savvy and we do this and that was a huge draw for me as well. I also find the whole post your social media and give me your zip code I'll give you a report. This just shows that the average agent who's wowed by that doesn't realize that as a member of the National Association of Realtors they have an RPR account and that functionality is built in there too. So everybody has this not just the EXP agents everybody has it. So it's fun for some of us to understand technology to kind of smile at that but you know a lot of agents are not as tech savvy and certainly when they look at the suite if you look at the you know the platform for conversion you look at the enterprise application all of the back office stuff the workplace platform and the collaborative tools. You don't have to be super tech savvy to plug into EXP. And then again that's another misnomer that you know this is for you know super tech savvy agents. We have plenty of agents come through the onboarding process hit the ground running and they're like very commonly saying Wow I had no idea I could use all these tools and you know raise my hand get answers that super easy if you could use an iPhone you can use everything we have. So it's not that big of a deal. Sorry. Or Android. For those people out there.. You know I'm not overly concerned with today's hottest apps on stuff. Right? It's like it's just not really that much of a concern for me. My clients choose me because of our relationship not because of my fancy shiny tools like shiny things are going to change my relationship. It's like Sure it might make it easier for me to keep up with all my clients. Like give me some leverage but it's really about me and the value I provide to my clients. It's like that's you know that's not going to go away. So that was the answer to the technology.

Today with us is Kevin Kaufman. Kevin along with Fred Weaver are the leaders of the 46:10 Real Estate Network. Kevin shares his story of his journey in real estate and success in operating as an expansion team in multiple markets. He also talks about why he came to the decision to move from Keller Williams to EXP and how the EXP system has helped his business grow. He also touches on how other systems are now moving in to EXP alike systems and why they are still set back while EXP is already big. Kevin also gives advice to those who are thinking to make the move.

Learn More about eXp Realty - Click here to watch a quick 7 Minute Intro Video.

Remember our disclaimer: The materials and content discussed within this podcast are the opinions of Kevin Cottrell and/or the guests interviewed.  This information is intended as general information only for listeners of the podcast. Listeners should conduct their own due diligence and research before making any business decisions. This podcast is produced completely independently of eXp Realty and is not endorsed, funded or otherwise supported by eXp Realty directly or indirectly.

In this episode

• Expansion Bussiness
• EXP Validation
• How EXP is a win compared to franchise systems
• EXP tools for agents
• EXP is already where other systems want to be
• Equal opportunities for everybody
• Revenue Share
• Income streams
• Kevin’s those thinking to make the move to EXP

Take Away

"EXP's virtual platform gives us the opportunity to explore the environment that helps us be the most conducive environment to us being productive.."

Want to Learn More about eXp Realty?

If you are interested in learning more about eXp, reach out to the person who introduced you to eXp or contact Tom to inquire or ask questions.

Contact Kevin:

Email: [email protected]

Facebook: https://www.facebook.com/KevinKauffman0

Facebook Group Next Level Agents https://www.facebook.com/groups/nextlevelagents/

Links: www.EXPCloud.com

Transcription

Kevin : I am host Kevin Cottrell joining me today is Kevin Kaufmann. He is the leader along with Fred Weaver at the group 46:10 Real Estate Network. Previously with Keller Williams. Kevin's gonna share a story today not only of his journey in real estate and success in operating as an expansion team in multiple markets but why he came to the decision after looking very carefully about moving from Keller Williams over to EXP Realty. I'm sure you want to listen to this episode Kevin's got some great insight. Whether you're a team leader for a team, a solo practitioner or in actually another expansion team I think you'll find Kevin's insight into why he ultimately decided to move to EXP very very interesting. Welcome to the show. Kevin.

Kaufmann: Hey thanks a lot I appreciate it.

Kevin : Well I've been looking forward to this conversation. I know not only when you announced and we'll get into that a little bit you changing brokerages but I see all over social media but for anyone listening to this podcast episode that doesn't know what a rock star organization you run why don't you give a little of your background and information about your network as well as your business.

Kaufmann: Yeah no problem so I'm based in Phoenix Arizona in Tempe actually as is where our office is and we.. I say "we" because I've got a business partner Fred Weaver him and I started working together in February of 2008. So I've been licensed for about six months at that time with him and I had done a few things some short sales actually because he had introduced me to them and we'd kind of teamed up on those early out of my career like literally a third transaction I ever did was a short sale listing of Fred's because he was leaving the country and going on his honeymoon. And so I sort of took over and handled a short sale is my first short sale and we ended up closing a couple you know probably good thousand or so 800 to 1000 short sales over the next few years and you know we started building our business around that and it was obviously like anything else very slow at first but in Phoenix short sales was it. So I can remember getting into the business and there being almost 60 thousand homes for sale at that time and put that in perspective here we are in late 2013 is about fifteen sixteen thousand homes on the market. So quite a bit more inventory right. Prices were dropping every day but that and we started building a team and we started taking some mentorship and learning as much as we could and built this real estate team. We ended up naming group 46:10 quite frankly because we didn't want our personal names on the team which didn't wanna have our names on the sign or our phone numbers on the signs and so we started working together and really out of just trying to help each other and it just became this thing we built this team named a group 46:10 and kind of evolved and shifted through the years and definitely have had our kind of that reincarnation where we had to shift from you know going from a short sale or distressed market to a more normal market shift in our models where we went you know kind of like a millionaire real estate agent model if you've ever read that book which I know you have and running that business model too. We actually had salaried buyers agents on our team for for about a year and a half and then to a newer model where we you know just blew it all up again and really started growing and then eventually started selling real estate more than one market more than one city and more than one state. And here we are 2018 and it's deftly been quite a ride.

Kevin : Yeah you're in the parlance of that large franchise system before you made the broker change which we'll talk about over to EXP or an expansion business in multiple markets in multiple states were you not.

Kaufmann: Yeah yeah. And we still are Phoenix like I said his home base we still operate in Denver Colorado which was our first expansion location and next expansion location was Nashville Tennessee where we still are to this day we also still sell real estate in San Luis Obispo California kind of central coast that we started there in the middle of 2017 started work in there and we still sell it in other parts and Arizona a little bit in Yuma and Tucson Arizona which is obviously outside of Phoenix and not quite the reach that we used to have. We've certainly had our growing pain lessons of opening up stuff too fast and too quick and then having to shut it down and things like that. But you know we still cover four different states and how about six or seven different markets.

Kevin : Fantastic well gives everybody a good background and obviously you know I've seen your stats right you guys are a big producing operation you're in the top 250 way way up in the list. And so when you decide to do something with your business this mission critical like change brokerages it's a big deal right it's not an inconsequential decision and for people listening right because with what's going on we'll talk about virtual brokerage or expansion operations in the industry because there's a lot of news that's come out and I want to get your take on it but for you personally and your partner you and Fred sat down you said you know what we're going to consider EXP. What drove that. In other words you certainly couldn't miss it. Right. We've been on fire for I call with two friends. My business partner for the last thirty nine months since he's been here it's like the news started accelerating last October when was it that you said you know what we need to dig into this and figure it out.

Kaufmann: Yeah. You know it's funny it's not what it's who. And that who is Curtis Johnson so I'm sure you know Curtis he's a dear friend of mine and has been for 10 plus years. And you know it's funny because you look at Curtis Carson always got a suit and tie on and I'm always in shorts and flip flops and can't even find a shirt with a collar. And so we're kind of the Odd Couple and yet at the same time you know I absolutely adore Curtis and look up to him and a lot of ways. But you know Curtis moved he came to Fred and I in December of last year so he had been strongly considering the EXP and at that point he was pretty sure he was going to make the moves. Curtis came to us because we'd had conversations in the past about trying to find a way to work together. I mean we've tossed around all sorts of ideas. We talked about merging our businesses. We talked about starting a title company together we just were always looking for a way to get into business together and couldn't quite find that thing. And so he comes to us in December he says hey I think I'm a go to EXP I want you guys to come. Truthfully we kinda laughed at him and said Man you know go for it. You know wish you well but that's not my gig. But I obviously want to root for your man. I love you. Come back and let us know what you think after you've been there for four or five months. And so he did. And thank God Curtis you know never gave up on us. And he came back and we had lunch like we do every few months. In May of this year and I'll never forget it was the first week of May and sat down for lunch with Curtis and he started telling us about his experience so far at EXP and it just literally blew my mind and I guess what's worth noting Kevin is that at that point Fred and I had been looking for a new opportunity we'd been looking to leave Callaway homes for quite a while and we'd been doing quite a bit of due diligence on a lot of other companies that actually hadn't done any on the EXP. You know Curtis he runs a massive business. You know they sell 300 plus transactions a year and have for 15 20 years now in the Phoenix area. And so it's not like him moving also. It wasn't inconsequential. We realized it was a big deal and he's someone who is close to us. We went OK what's going on over there. Like what are you seeing. And so he told us what he saw. He shared his experience with us and quite frankly it really grabbed our attention and we said we got to consider this and it wasn't even a six weeks later that we were moved and quite frankly we had a move center if we could but we couldn't. We had our number one guy the guy who runs our Colorado operations and has for four years now from day one. He happened to be out of the country for four weeks during that timeframe. And so we literally couldn't move any sooner. So we saw the opportunity we saw how great of a system it is how awesome expertise platform is that what it could do for our business and our sales business and we saw it as an opportunity to grow and something that could actually be sort of the model and system that we had been seeking out yet hadn't found anywhere yet.

Kevin : It's interesting because for listeners what Kevin has shared is the most common response is mostly for something that has a significant business that Hey I'm gonna watch what you're going to do I'm interested. I love you you're a great person I'm going to mastermind with you etc.. It could be anything from an informal relationship to anything like that but it's pretty incredible in other words you listen to the interview with Jay Kinder in his line is what's been seen can't be unseen and that's the message that I think Kevin you would agree with me is there is so much misinformation out there there's so much noise it's getting less because it's getting invalidated right. It used to be. Well you know there on the pink sheet there over the counter then on May 21st we went up listed on the Nasdaq sets. You know and the financials I've been out there for forever and a day so you know the franchise systems try and put that fear out there that it's not going to happen and this is just a silly operation especially with the announcement that the number one franchise system is going to do their own state wide virtual brokerage in all the states. Right. You know that is something that will jump in to in a second but I love your message which is "don't give up on me" right? You know Curtis did a great job of having that conversation and you have to share his story and you're fairly new to the system. But I want to get your take coming out of that large franchise system from expansion right. There's lots of people right now is mostly what we can talk about in a minute with the announcement about the virtual brokerage operations they've got to figure out what they're going to do right. The industry is clearly changing my prediction and what you heard Jean and I talk about is we get 5, 7 years from now in bricks and mortar are going to be either the minority or all but virtually gone for brokerages. It's going to be hard to compete when so much of the industry goes to I don't have bricks and mortar on every corner. We're all over the place. So what would your advice be based on what you've learned from Curtis and what you know about the system now that you're in it for somebody that's maybe got a expansion plan they want to a multi market or they've already started another trying to figure out hey before I go roll this out and really complicate my life you know what would Kevin's advice be if we locked you know five or 10 of these people in a room and you say hey this is where my perspective is.

Kaufmann: Yeah. You know my perspective is number one don't go that fast. And that's probably the advice that I got that I just didn't listen to quite frankly as I think like most of us out a victim of my own success right? We hit it out of the park in Denver and while Nashville at first was certainly not a glaring victory it over time it's really become a big one for us. And you start developing these systems you start to believe you can just kind of go everywhere. I'm just gonna say within the constraints of working in a Keller Williams which is a franchise system and KW is not right or wrong good or bad in my opinion. But you know what it is for sure that we can't say is the franchise system. And there is a lot of constraints for real estate because of the way real estate works the way things work with the Department of real estate advertising laws you name it. Like there are so many things that have to be factored in. What we found is we're putting these little bandaids over all these little things that we had to keep working and eventually we just got so big and we're paying so much money to be there that it just we couldn't avoid it. And the minute having the minute we looked at the EXP. We went oh my gosh this is what we've been asking for and what was we've been looking for for so long. In fact the thing I don't mind sharing with you is we were challenged early on in our search for a new home by a gentleman very good guy who was extremely intelligent. He's now the CEO of NRT. Ryan Gorman very smart guy. He said you know why I didn't know what perfect is for you. So that forced us to really think about perfect and there was two things that Fred and I were very clear on from that day forward we were never going to make a move. Number one it had to be one brokerage per state. And a lot of people don't realize how big of a benefit that is. But once you operate in more than one city and more than one MLS and more than one brokerage within the same state you quickly realize what a blessing that is. And then number two is it had to be a financial win for the folks on it in our business who are really on the ground for making things happen working with buyers and sellers. Those two things have to happen. And obviously when you know the EXP model you realize those two things are like that. It's kind of again no doubt. That's just part of it's built in right. That's baked into that because blindside too you know that's the thing I got when I talked to Glenn first time I talked to Glenn I realized oh my gosh this guy he's solving or solved all the same problems I've been trying to solve. That was my biggest takeaway within about five minutes of being on the phone with him the first time. And so when we look at EXP That's amazing. And the truth of the matter is I love Keller Williams. I'm extremely. Let me rephrase that I loved. I'm extremely grateful for what I got there and for my time there and for what I learned in the relationships and that just isn't possible inside of a franchise system.

Kevin : And that's great wisdom. I come out of the same system right. I was a team leader there. I was with Andy Allan and Aaron Lancaster you go pull out your original first edition of MRA book. Those guys are in the mastermind groups right. You know Glenn was there too. So if you look at it and you listen to the interview with Brian Culhane he talks about Glenn's expansion teams and Brian helped run those right so that the predecessor to EXP even being formed was essentially expansion business in multiple states. So it's kind of an interesting history. And now here we are even though you know people like Gary Keller he's a visionary. I mean I sat in meetings with him and Dave Jenks and Andy and Aaron where he's like here's how we're gonna get you to go multi market. That was in like 2003. So he was way ahead of the time you know flash forward the complexity you describe in the franchise system and I want to get your take on it right the big announcement at maybe camp was statewide brokerage operations right virtual operations as an overlay on top of franchises. Now you know for people listen to this here's what happened. I'm not gonna make any judgment to this comment. I'll let people read between the lines. A franchise system makes the franchisee review and sign and an underlying review in sign the FTD it's a federal disclosure every year. Right it's a part of being a franchise operation. Do you think that most of the LPs actually read that thing.

Kaufmann: Well listen man I was a regional director for KW for like 30 seconds. I couldn't get past the like the first four pages and a couple of hundred pages or whatever.

Kevin : So I'm not gonna make judgments of this. We were approached by some of our good friends and like you I have lots and lots of contacts and love for Keller Williams. There's great people there. Well here's what happened. I was sent as it was Gene and a number of other people the FTD and specifically a page reference well somebody read it. They were able to do what they're doing and this is why a lot of the LPs are scratching their heads. Now they're like well wait a minute I got a franchise awarded and I had a territory. Where's the bad news for you go read your FTD. They took the Territory restriction out last September in the edition they put out last year. So most people don't even know that in and maybe that for a lot of people and the listeners for this podcast this is the first time you're going to realize if you're an LP at Keller Williams you probably want to go pull out your FTD if your scratching your head has to wait a minute. How do they do this. Well that was something was put in there and they did this the first time ever they did it. So this big announcement and all the noise and you know I like Adam I've known Adam a long time and he's talking you know he did his Facebook Live I'm sure you watched it too. Our was sent to you and you watched it and the message is they're very aware that this is going to be disruptive we're already disrupting it EXP right. So now you've got the franchise system doing it and you know God bless him. It's complete validation of the EXP right. They've been saying this doesn't make sense does make sense. It's not going to work but we're the number one franchise system on you know transactions et cetera et cetera et cetera age account and then they come out and make him they go statewide virtual operations you know. So what is your take on it right. You know you described something about operating in multiple markets let's just take it within one state right. You know you go into a big market let's say you were going to expand to Dallas. You know there's multiple owners and multiple offices. Each one's going to have a different ownership group or you know potentially overlapping and you're going to have to deal with that. And like you said in an EXP world that doesn't exist right it's state by state there's a brokerage operation that covers the entire state and multiple MLS is. So what is your take on it. Based on the virtual brokerage operation let's pretend hypothetically you were still at Keller Williams and now you can join the you know you qualify right because they've certainly made it clear you have to be at an elite level you qualify and you're going to be able to expand. It's going to be a win for expansion operations it simplifies your growth. Correct?

Kaufmann: That's assuming that they can actually pull it off. So I think what's really important Kevin as we look at the fact the plan's not there yet. If you go back and listen to the CEO speech they'll have the details. The actual setting up of let's call it 50 brokerages because there's 50 states maybe they don't need 50 I don't know. But let's just call it 50 for sake of an argument setting up 50 brokerages higher shitty brokers doing all that stuff like first of all there's some logistical nightmares there that have to happen like you know EXP didn't get to thirteen thousand agents overnight it was launched in 2009. Here we are it's 2018 and it feels like they just burst on the scene over the last couple of years. But you and I both know it's been going on for you know since 2009 and it's not to say that this is going to Keller Williams nine years to get going. However there are quite a few things that have to happen. What I'm more concerned about is changing the FTD is one thing but in a franchise system you've got five and 10 year contracts for your franchise. And so changing terms and conditions on like page one hundred and thirty seven at four hundred and two in the third paragraph second sentence there can be some legal ramifications there. And so they've obviously got to be really careful in how they roll this out. My opinion is that was a statement to say hey please bear with us we're working on this we're trying to we're trying to fix it we realize it's a problem now they've known it's a problem for years it's been at least over two years since since they've been aware of this issue and it just now decided to come public with it which definitely was funny. Interesting timing but the reality is is it's going to be still really hard to execute and then when they do execute. My guess is there's probably going to be consequences from legal ramifications from the franchise owners. That's my guess and unfortunate that'll probably end up in court. And you have to choose you are Keller Williams international or any other franchise. Are you going to choose the group of agents that are running these and this expansion business or are you going to choose the people that you have a franchise agreement with.

Kevin : Absolutely. I agree with you. I mean I think that it was definitely something that when you look at it it's definitely doesn't have the detail at this point but what was interesting that came out in Adam's video was they were already fielding calls of 40 or 50 LPs at a time and having people I would expect being concerned. So my take on it is the bigger concern I have. I mean Jean and I and you and others have a passion for agents. That's the culture and foundation of EXP Realty. And I worry about creating an environment of sort of the elite expansion businesses having preferential terms and the average agent in the market center right let's say that I don't ever want to be Kevin and Fred and have a gigantic multi market business. But now I'm competing with the let's say it let's us hypothetically flash forward and I figure out some of the details and they don't end up with a mess and they're able to execute let's say even if they take a state like Arizona and they roll this out. Now there is a dichotomy in the market right there's the haves and the have nots right? If I'm an expansion business and I'm able to do this I continually cut a deal in the way that they framed it out in the preferential terms in terms of how I do this. And now I'm an agent in the market center and unless I graduate to the elite level and qualify I don't get even on the playing field and I don't like how that feels from an agent standpoint right. Because there are great agents in the KW systems with a lot of them. You and I are friends with lots and not everybody wants to be the gigantic multistate operation to qualify for that elite level and I don't want your take on it is I heard from a lot of people. "I don't like how this feels. I don't want to have that business." "That's not me. I've got a great business. I've got a small team here but I'm really concerned that I'm going to be competing on a level field".

Kaufmann: Not only that the other piece you got to look at here Kevin. And let's just say that the LPs overall are our quote unquote OK with it. So if you go look at these top expansion teams and I'm not going to name names there most of them are my friends and people are highly respect and in some cases really love So we're talking about they're gonna get to go to this extra brokerage this new brokerage this virtual brokerage and and those agents on their team will now get this you know call it a half cap if you will and special treatment. But the problem is is those teams are comprised of other capping KW agents. And so what's going to happen is. So if I am one of these you know mega team X expansion teams when I grow color wins doesn't grow like it stays the same because I'm just they're just recruiting other KW agents to their team. A lot of cases they're recruiting another Keller Williams team to their team and it's what I call their acquiring teams they're not even recruiting agents they're acquiring other teams. And I don't see how that win. So if I'm on the local market center owner and I've got no. 6 or 7 capping agents in my company. And now they've been recruited to these six or seven different mega expansion teams and now they're going to leave my brokerage. I can't go to the other brokerage. Not only are they going to pay a lot less money in company dollar but then that's going to get shared back. But I like am I going to get all of that back? and I get even if I got all of it it's still not even half of what I was getting. And so again you run into legal ramifications that I think clearly haven't been thought through and that's why it's not rolled out and why it won't be rolled out for some time because they will have problems like that.

Kevin : I couldn't agree with you more. My personal story which we talked about before we started recording is the fact that you know even in a market center right let's forget about the statewide brokerage operation for a minute and you're highly successful right. I moved into a marketplace from out of state. I didn't know anybody and I went in less than three years from zero to 240 transactions a year. This was before the online stuff was dominated by real track common Zillow in most markets. We set up a real geek's Web site was one of the first ones we rolled out in a massive way. And I knew Jeff Manson pretty well and so I roll out this Web site. I hire a whole content team and we knock it out of the park. We're ranking for a gazillion things. We're starting to get everybody's leads right. We're doing what expansion teams do as well from the lead generation standpoint right. They start to dominate the markets right. You know the really big ones come in like you said they roll in teams and otherwise and they turn on massive Legion. So I run into a problem right. I'm brought in in the open and the team that are like you are causing so much chaos in our markets center. We've had 15 or twenty five agents complain about it that this person and that person are working with your buyer agent. This is going on and that's going on and we can't have that. And you know the bad news is the way they resolve that in a franchise is I was asked to leave and I was told I mean I have 57 active listings 30 paintings and I was brought in an hour before and a I'll see meeting and told you've got till Friday you move. I didn't right. I negotiated a more orderly transition out. But if we look at that now flash forward to statewide brokerage operations there is going to be no remedy for the agent market center because they're open to too are going to say well I don't know what to tell you. That's a state brokerage issue and we have nothing to do with them. If you're a franchise agent and you're worried about this just I can tell you from personal experience you know you've reach out to me if you want to have an offline conversation. But the net net on it was I wasn't given an option. I even talked with the regional director and his answer to me was I do not know what to tell you this is a franchise issue they can resolve things how they see fit. We have nothing to do with it. And the region can't help you. Well that's kind of going to be the dialogue with somebody complaining about a giant expansion business. It's going to be you know sorry. They're in a different brokerage and be like you complaining about a different franchise and that's my biggest concern. When I talk about the unlevel playing field is I've seen how this is resolved. And so my word of warning for people is you know Kevin's very very astute on this. It's potentially not going to be rolled out for a while but if you're looking at your business long term just realize that this is an issue you're going to have to cross and it may or may not be an issue for you but just know that you know potentially an unlevel playing field is being created and it doesn't feel good to me right. Because I know how they resolve the issues and the ability to get it resolved is going to be messy. Number one you know as far as execution but you know the good news is there is an environment in EXP where you know we've always allowed you know the rainmaker to come in on a team and they've got you know one cap nationwide and they can go build as they see fit. We don't have the complexity in the issues we've done the hard fight of opening offices you know in terms of a state brokerage operation in each state for 49 states. And that takes a while. Right. We've learned lots of lessons. You know when you see Glen message about this it's like Oh my God we've learned so much since we started in 2009 to do this and the reason we didn't open all 50 states immediately was that it would be virtually impossible to tackle all the complexities that are different in every state. So I share your view Kevin that this is not happening anytime soon. So if somebody were listening to this and obviously they're trying to get the you know two or three main drivers let's talk about a couple of different audiences. You are you know running a Facebook group and I will get all your information out here in a minute before we get done recording so people can find you on Facebook and you know some of the stuff you sharing your masterminds and some of the stuff you do. But if you were advising let's just talk about a couple of the different constituents out there right. Somebody in the franchise system there a capper and they're looking at this potential for a future unlevel playing field. What would be the two or three things you'd tell about what you know about EXP for why they would want to probably strongly at least take a good look at it.

Kaufmann: The reality is EXP is an awesome company in what you look at it. You start to see that. So I'll speak for where I was like I just didn't look at it I didn't give it a fair shake and I just decided you know my brand better than your brand. Blah blah blah. And I fell in for that whole thing. Which is just dumb right. I mean when I look at like what all everything I have inside of enterprise which is the backend system everything from the marketing support to tech like Sky slope the ability to have the different Web sites through the technology agreement. There is a lot. Therefore it. Agent who quite frankly especially looking at the marketing platform you can build a bigger business for less money because of the tools that are already included. So this is not EXP talking about we're gonna have it one day. It's actually already here today it's been here for a while. Then you take a look at the fact that it's virtual which is awesome. And if you want to have a physical space you can do that. I'm a physical guy like I literally like to show up to the office every day. I bought an office building about a year ago long before I ever thought I'd be at EXP because I want to own commercial real estate and it's flexible. And so you can go to an office if you want. There's obviously the Regus agreement but there's also the opportunity to go buy your own building or go rent somewhere else and rent your own space whatever it is. The thing is is we're not all the same as real estate agents. We all want something a little bit different. We might be doing the same thing because we're told we're supposed to but we haven't really explored that and EXPs virtual platform gives us the opportunity to explore the environment that helps us be the most conducive environment to us being productive. One of the things I always loved about KW Was the ability to mastermind to share things with other agents and I just have never seen anything more collaborative than what happens here at the EXP and that is supported obviously because of things like the financial incentives to do so when you introduce somebody to the company whether that's through the stock plan or through the revenue share plan etc. This is like truly open book. Let's share let's help each other let's grow in a big way way beyond anything I've ever experienced my life and I've been in every circle there is to be an inside of the other company and it was great. Don't get me wrong but I like this a little bit better a lot better in fact and so I think no matter what your thing is whether that's the ability to create other income streams besides buying or listing another house or building another team or a bigger team or buy more leads etc. or the ability to leverage the technology that already exists that isn't just coming one day maybe. Or the ability to do business across multiple states and have the level playing field like just the simple fact that the split is the split no matter what state you're at. No matter how big of a producer whether you've sold 500 houses last year or five I think that's amazing. And I think that's great. And I think that it shows that there is an equal opportunity here for everybody. It's truly equal opportunity that everyone's here to take advantage of it the same way you look at those things and I just want you know I truly believe that this platform gives not just me but any agent who wants to be honest about it and really look at it and give it a fair shake it gives us the ability to grow a bigger business than we ever knew was possible. And it gives us the ability to create other income streams besides just selling more real estate and growing a bigger team. And it's kind of hard to not like that.

Kevin : Absolutely. You know you and I have been in a franchise environment in growing teams and when we are on point we recruit talent. Right? And so that dynamic that you talked about that i'll just touch on for a minute is guest after guest on the podcast talks about the fact that in the previous franchise system or in their office some of them were in the same market center and they're like we never collaborated on one single thing right. We were number one and number two in this market center in the Dallas area and now we collaborate. Now we mastermind how we talk and so that sharing which is not necessarily very transparent outside is something that I love hearing you say because it is nothing short of incredible and the retention strategies around building wealth for the talent that we recruit. Even if they decide to go off on their own we're in a lot of the franchise systems that's something that creates strife sometimes people leave and they unfortunately go to other brokerages. I'm not seeing this develop at all at EXP. I mean you know there's these "let me help you grow and then if you decide you don't want to be in my operation my team anymore" you know because of the other streams of income the fact that we're all shareholders it's basically encouraged and you know I haven't found anybody that doesn't just get blown away with what they see once they're in the system.

Kaufmann: It's pretty remarkable what it is when you actually look at it.

Kevin : And I agree with you. And so your advice of digging in is absolutely spot on right. In other words you can't go by what's posted in the you know thousand comment streams in the large Facebook groups right where somebody says What about this versus this and I called the brokerage bashing that goes on in the comments or you know if you cut them off after a thousand comments you know some agents some poor agent reading that would have no idea. And it's so far from accurate because what you said which is everybody's got their version of their business and it's going to mean different things to different people. So my advice always is what yours is which is you owe it to yourself to dig in and at least look at it right even if you decide to stay at your brokerage wherever it is you can be an independent. You can be a killer Williams You could be at Remax no matter where you are. I think the biggest mistake somebody would make and only get your take on it. It would be to be close minded and look up and go. I'm not even looking at it. This is not for me because I've seen people come back around. I've had people basically start out with a "I'm not interested. Not going to work for me" and we're starting to see them stop doing that. And then when they do look at it they join. I mean one of the guests I have coming up on the podcast is John Sterling you know. And he was a big deal within KW right. He supported numerous team leaders. He had relationships with hundreds and hundreds of OPs and team leaders and agents across the country. And once he dug into it he's like Oh my God I can't believe that I didn't dig into this before. And you know he recently and when I interview and you'll see and you know this you saw his post on Facebook that you know he's joined in. You know he's you know Jean and I are supporting him and he's going to come in and you know he sees the value as well so I was glad to hear you say that. Let's talk a little about your social media stuff your masterminds because I want agents to be able to get plugged in. It doesn't matter what the flag they fly. Brokerage wise. Right? You know you give back to the community you create a lot of value. You got a large Facebook group. You do masterminds you do in person stuff. So wouldn't you detail a little bit that out so that people if they want to get plugged into your world can.

Kaufmann: You know the truth is is that I'm a big fan of people and relationships and those always trump company to me. And so while I do love EXP I did love Keller Williams didn't love either one more than I care about my relationships with people and one of those relationships is obviously my business partner Fred but also our good buddy Kody Gibson who runs a large large team over at Keller Williams and almost two years ago we just decided to start a Facebook group. We just want to start a mastermind online you know brand agnostic for people to come and share ideas best practices do webinars things like that. So we started a group it's now called the Next Level Agents about twenty 23000 maybe 24000 members in there and we just do our best to bring really good content to the real estate community regardless of brand. We try to keep it very brand agnostic and try not to get these two entities brokerage wars conversations that break out unfortunately you can't stop some people from saying my team is better than your team but that's another subject. But for the most part it's high level conversations right. We started putting together some live events like we did one in May this past Las Vegas called NLA Live. You go to NLALive.com you can kind of see the promo from last year or the highlights from last year as well as the information for next year's event where we just brought in speakers from all different companies different subjects and just said hey let's get back to the community today. And that's really what that's the essence of the brand of that group is let's get back and let's share best practices and help each other. Check us out on Facebook if you haven't already it's Next Level Agents. You can go to Facebook.com/groups/NextLevelAgents I believe it's how you can find it easy or just search it. Yeah. That's just kind of a project. You know we've got a mastermind event coming up this October in Portland which we're really excited about. We're looking to do one or two live events a year and so this will be obviously a little bit smaller than the Vegas event where we had a couple hundred people show up and next year we're expecting more like four to five hundred people in person plus the all of the live streams. So we'll just see it as an education platform and a platform to be able to communicate with the real estate community because that matters. This is a relationship business at the end of the day no matter what. And quite frankly if I'm representing a buyer or seller I could care less what brand has the listing or the other side of the transaction. I've got to make sure that a good relationship with the other party and we can get this deal done together in a win win scenario.

Kevin : Fantastic. Obviously I have every guest give their contact information so that if somebody listen to this and they want to basically get in touch with you and talk about it. This is another thing that's not very transparent from the outside of you. We're all shareholders. We all want to provide best information. So Kevin give your contact information and basically you can reach out. Does it matter who introduced you to the EXP. We're all here as a resource. This man is me Jean. Kevin does it matter who it is John Sterling we're all here to get you the best available information so you can make a good decision. Kevin. How would they reach you. What's the best way.

Kaufmann: Yeah. Best way is by email [email protected] just comes right to me and my business partner Fred another really good way is Facebook. You know Facebook Messenger is always a great way. Easiest way to find me. I'm sure there's more than one Kevin Kaufmann on Facebook. So if you got our Next Level Agents it be pretty easy to see who the admins of that group is connect with me that way. Facebook Messenger is always a really good way too and by all means reach out. We love referrals too. So Phoenix San Luis Obispo Denver Tucson Yuma Nashville. We definitely love real estate referrals. We sell a lot of real estate. We want to sell a lot more.

Kevin : Fantastic. I appreciate you coming on the show any final thoughts before we drop off today.

Kevin : Now you know I'm just I'm so excited to meet this company and be in business with my partners like Curtis Johnson and Walker and so many of the other that we are in business with here and looking forward to a very very bright future.

All right great. Thanks for coming on the show.

In this episode Erinn Nobel from Bellingham Washington joins us. Erinn has been a real estate agent for 20 years and she's a successful high volume producer.  She is one of the early members of EXP and today she talks about the growth and momentum build up from the early stages of EXP until now. She gives us her perspective on the power of EXP's technology and how it is being an industry game changer. She explains the myths about the EXP system and culture and touches on how fast EXP is growing through out Alaska and Canada. She gives us her advice on due diligence.

Learn More about eXp Realty - Click here to watch a quick 7 Minute Intro Video.

Remember our disclaimer: The materials and content discussed within this podcast are the opinions of Kevin Cottrell and/or the guests interviewed.  This information is intended as general information only for listeners of the podcast. Listeners should conduct their own due diligence and research before making any business decisions. This podcast is produced completely independently of eXp Realty and is not endorsed, funded or otherwise supported by eXp Realty directly or indirectly.

In this episode

• EXP growth and monument buildup
• Real time support through Sky Slope and the EXP platform from assistant brokers.
• Access EXP technology throughout your own brokerage branding. 
• EXP's culture standpoint vs the classic franchise and MLM or Pyramid systems.
• Releaf from "bricks and mortar" and administration work through EXP's cloud based system and lead generation programs have groundbreaking technology programs that have transaction management tools.
• Revenue share,  team growth and the disinformation and myths about them.
• Attracting agents and growing your revenue share.

Take Away

"We are not a recruiting company if we're recruiting company. We would be out of business. We are producing company. We want agents that are in production that are building the revenue so we can all take part of it and share the revenue revenues. Sure it's just for expense."

Want to Learn More about eXp Realty?

If you are interested in learning more about eXp, reach out to the person who introduced you to eXp or contact Tom to inquire or ask questions.

Contact Erinn:

Call at 360 398 3883

Email: [email protected] 

Facebook: https://www.facebook.com/ErinnNobel

Voxer: Erinn Nobel.

Links: www.EXPCloud.com

ERINN NOBEL FOR SONIX.mp3 KEVIN: Welcome back to another episode of "The EXP explained podcast" I am host Kevin Cottrell joining me today is Erinn Nobel from Bellingham Washington. A special guest she's been with EXP almost since the beginning. Not quite as long as Brian Culhane who you've heard in his episode share his story about the founding of the company but Erinn has been in regional leadership. She's a successful high volume producer including a member of the CRS community. And Erinn is going to have some great insight to share with us today for agents looking to understand a little bit more detail why agents are coming over from other brokerages and joining EXP realty. Stay tuned for my interview with Erin Nobel. Welcome to the show Erin.

ERINN: Kevin thanks so much.

KEVIN: Well looking forward to our conversation now they're going to be plenty of people that listen to the podcast that may be not familiar with you. And from the Pacific Northwest. Can you take a minute and give a little bit of your history and background in real estate and also touch on the early days of the EXP because you've been around for a while haven't you?

ERINN: I sure have. Yes. It's been a fun ride. That's for sure. Yeah I'd be happy to. So in a nutshell this is my 20th year as a residential real estate agent right here in Bellingham Washington where EXP was founded back in 2009. I have been practicing residential real estate here in Bellingham Washington since 1999 and made the leap over to EXP four years ago as agent number 337. We were only open in 18 states at the time and it was just kind of a wild ride.

KEVIN: Erin when the company started and obviously you knew Glenn because he's from the same town as you and you were familiar with him from his days probably back at Keller Williams is what would make you even take a look at EXP I know you were involve CRS you you're pretty well-known the Pacific Northwest and you had a successful real estate practice. What were the drivers for you if you look back in the early days of the EXP. Because it's a different company now and I know we'll talk about that that caused you to even look at it initially.

ERINN: Yes it's a much different company. For me it was really just the vision that Glen had and the future of what the real estate model really looked like after coming through the recession and building my business back up in 2010 11 and 12. I was just really identifying what some key factors that were not working in the business anymore. I was working at a small local boutique brokerage and it was very well branded here locally. But I noticed that clients were calling in and they couldn't even pronounce the name of the brokerage anymore. They were really trying to just identify an agent and we didn't have the agents in the spotlight. Were at the forefront. It was all about the real estate broker or that brokerage. So I just noticed a shift in the thought. How can I align my business and my skill set and be in the forefront and be able to attract clients that I want to work with instead of having them funnel through my brokerage model first. So I sat down with Debbie. She had just made the leap over the EXP from a large local real estate franchise here in the Pacific Northwest. She and I were actually originally licensed together back in 1999 and I had known for her for quite a few years obviously but she was telling me about this new business model EXP and how it really is promoting the agent at the forefront. It's empowering the agents and showcasing the agents in a way that I had never heard of before so she really lined me out with that. And we met together with Glenn for dinner and he basically took me through the entire story in the process of how EXP came to be how he had been working through Keller Williams and running mega teams throughout the Northwest here and I believe in parts of the Southwest as well. But he was looking to expand and trying to find a solution for an expansion team that would not only financially be beneficial for the agents but helped to scale his business and scale through a basically recession proof model. That's what he created and I thought my goodness he's really on to something here and I want to be part of this. I joined immediately that day. That was four years ago.

KEVIN: What's interesting about we're EXP is today and you know your interview and part of that discussion would be well for people listening to go listen to the two part interview I did with Brian Culhane because Brian was in fact working with Glen in the Southwest US and had the big teams down in Arizona and the markets there and so I think he was the first agent call it the sort of the de facto co-founder in the early days and you know right in the beginning and forefront he talks a lot about everything from the name of the company being selected in a lot of the early thoughts. And so it doesn't surprise me. You and I have interacted a fair amount that you had enough vision for this especially with your passion around the agents you've been heavily involved in stress and it's a different company today. You know if you look at Jean-Frederic and he came in I think it was agent for 77 or something like that was when he came out and he came in a little bit after you. Not much. And you know it was just over three years ago at this point. So what's happened since then and I know I don't want to talk about your role as an RTL and working with lots of teams and brokers and people that are interested in the EXP to talk a little bit about the early days versus now because you talk about a new business model and being more agent centric the offerings and the value proposition is so much more robust today. It's so much more developed the systems the cloud all of the offerings are such. How do you see it playing out in other words you are an early adopter. You came in early there wasn't a lot if any of the systems that are in place today. In other words there was a vision and the company certainly was operating in a you know a handful of states 16 or 18 states at that point versus where it is now. And so what were your thoughts on that versus what if you were talking to somebody who's listening to this today you know in other words there are still people out there especially compared as they're saying oh there's still a startup company they don't have anything together in terms of systems.

Absolutely. And I wanted to be part of that momentum. I saw an idea and I knew it was going to be big and I wanted to jump in fully and help out you know contribute in any way or form that they could. And we did that fully. My husband actually left a 20 year career at Microsoft to come over as CEO for the company to build out our enterprise system with Glenn. We just loved the idea of the company and the promotion of the company and doing it in the right way. But especially it's achieving that momentum now which has really shifted the company. Everybody is talking about the EXP Realty. It's kind of the local latest buzz because it is real. It's providing agents with agent ownership it's providing a way for agents to not only excel in the business but to get out of the business at some point and retire and have a nice lifestyle. That's the type of momentum that we wanted to be part of in the early days we didn't have the momentum right. It took a massive had turn Turner agent or many brokerage to come over to the model and join with the EXP to get some local attention. And the frenzy going that other people would identify with and start questioning hey what is this. You know I want to learn more. Now it's almost on a hourly basis with people reaching out to me asking questions wanting to learn more about the model and the interest is peeked. Let's just say that.

Well absolutely. I mean it's one of those things where you know to give people some perspective you know you were talking about you know being in the mid 300 ads as far as Agent count. You know when Gene joined I think it's 37 months ago 37 - 38 months ago there were just under 450 470 agents. Texas had I think if I know the number correctly I don't have every one of these numbers memorized but they're either at 7 or 12 agents in the entire state of Texas. You know now we're at about 2400 in less than 38 or 40 months. And so you know what Erinn is talking about is a massive amount of momentum the company has built out you know for all intents and purposes the entire North American content from the standpoint of United States as well as most of the provinces in Canada. When you look at the operation the footprint is at the point now where even if an agent who is listening to this know somebody in Kansas or know somebody in Florida or even in British Columbia which is a recent addition to the EXP's footprint they have the ability like you talked about from a standpoint of referring them in and having them join. That is much broader than it was when you were involved in other words you could do things in Washington state you could do things in certain areas. But both from an MLS footprint and a state being opened it was very limited initially. So for any agent listening to this it's a whole different world now and I'm seeing a shift and I'm wondering what your perspective is on this Erin. And people no longer thinking about this as early adopters in other words not only are all the top brokers from a lot of the big franchises joining. It used to be it would happen you know last fall Jay Kinder joint right? And there was a huge amount of momentum generated by that at this point. It's almost weekly that somebody is joining from a big franchise because I think that the risk either perceived or actual In other words for a while it was perceived. And then from an actual standpoint they can look at it and if they do due diligence and I'm wondering if you're seeing this change in the perspective agents now if they'll actually look into the due diligence the risk is out of the switch at this point. There aren't a whole lot of holes in the value proposition that they may have heard about that even exist anymore. Don't you agree.

ERINN: Yeah absolutely.

KEVIN: Well let's talk a little about some of the stuff you mentioned from the standpoint where you use terms about you know coming into the real estate business people might be sitting in independent like you were or a big franchise and they're thinking God the only way on a bill to retire is to sell my business my team or build it up to a certain size and replace myself or I might be able to make enough gross commission income and net enough that I can buy properties. EXP is different than that. So let's talk a little about your perspective on that. I know you have this conversation from a wealth standpoint quite a bit.

ERINN: Oh yeah absolutely. And that's where I really see the model shine. We've got a lot of mom and pop businesses out here in the Pacific Northwest that are seeing the shift in the model and the change. And agencies are not coming into the office anymore. And here they've got so much money invested in not only bricks and mortar but in a phone line that the fax and the copy machines for the office staff that's sitting there to support our agents who are not going into the office. So they're trying to find a new way to invigorate that business by offering some education basically any sort of new technology to offer lead generation to their agents. But all of these are piecemeal add on products that those broker owners are having to absorb. This is where you can come in and power that company. It's basically like a bolt on product to a brokerage and power that brokerage where they keep their own branding. So say it's you know Thompson real estate. It would be Thompson real estate with the EXP realty or brokered by experience. They're able to fully branding in place and intact because they worked so hard to build that brand in their local area and add on our EXP product essentially which they can then offer to all of their agents. We have a lead generation programs have groundbreaking technology programs that have transaction management tools. We have education easily accessible through our cloud based environment. We have mastermind's lead almost daily. It's just incredible for these agents to now be able to access its technology throughout their own brokers that they're already familiar with. And this is where I'm really seeing the future of the real estate models as we know it make the shift and adopt the EXP technology.

KEVIN: Well certainly the interview idea with Mitch Ryback he talks about that right here. He had Tropical realty down in Florida and he was going to do a seven figure sale and then stepped back from that and went with the EXP to be powered by EXP instead. And one of the things in addition to the economics of the change he talks about the brand he talks about the tools you know things like Cavey core and Web sites. And what's interesting about it is he also touched on something that is sort of the dirty part of brokerage I don't mean that in a bad way but just what they don't like doing right. They like to wash our hands of this which is the actual brokering compliance the in and out of licenses the transaction management looking at the contract review making sure ENO is in order all of the stuff that so many people who have built up these independent brokerages just don't like to do. Now this also applies and I don't know if you've seen this but Gene and I haven't heard this from a lot of the rainmakers because there's a logical progression whether you're a big rainmaker for a team at a franchise or you're independent quite often. You know if they're at a brokerage their next step they start thinking about hey do I go out on my own. And what they haven't thought through is exactly that. In other words you can do it and then they look at how much was I paying in company dollar to my company. But when you start to pull back the curtain on all of the steps needed and all the staffing needed to do all of that sort of the dirty brokerage part the compliance pieces all of the admin stuff they haven't thought that through and typically from a behavioral style right these are driver personalities a profile and they don't even want to touch that stuff and so I know one of the things that I'm seeing and Gene is seeing when we're in meetings is the rainmakers and if you're a rainmaker and you're thinking that's your next step. This is probably something you want to look at because the economic model and the way you EXP sets things up in a team environment even a large team environment and even if you're in multiple markets right you're an expansion team. The tools that Erinn is talking about provide you with a great platform where you don't have to staff up and handle all of that admin stuff because that's just a cost center. There's no there's no real value or leverage in that side of the business is there.

ERINN: No. No there really is. And one thing I really wanted to touch on which is one of the most common questions that I'm asked is how does EXP provide that type of support. How are we able to review transactions. How are we compliance. How does this work. And really what we've created is the perfect system for transparency between that broker or managing broker or broker owner and the agents. We've created a system that is completely paperless which is also obviously economically friendly and we're using sky slope transaction management to review each and every file that transaction that an EXP agent is party to. So the broker has complete access to these files checked for compliance. Make comments and no edit anything in there as necessary prior to the agents closing or finding that file. We've also created a system for agents to get instant or immediate access to help with any sort of transaction where they can reach out to their broker where they can reach out to the assistant managing broker in place and just have instantaneous help there's no more waiting in the office or your broker to be free or to get back from lunch. You just reach out it's simply either through the phone app or EXP world and get answers at your fingertips. I think it's just brilliant.

KEVIN: The other part of all of that is from a system standpoint and agents are painfully aware if they're at a franchise locations for example and let's say they're on the East Coast right or the West Coast right. Here's the two examples. And you go do a walk through on your property and invariably something comes up and you've got to do an adjustment. Something wasn't fixed. There is something that is still a defect or something that was discovered. And now you're going to do a 5000 dollar price adjustment or some other thing like that that affects your D.A the ability to have the transaction and the accounting team available in the cloud is a huge game changer. Right. Imagine you're in the East Coast. You do your walk through at six thirty or 7 at night and you discover this. Now you've got an agreement you've got an amendment and a modification. There are accounting and payment people in the EXP cloud so to speak just to use basic terms that are going to be available there are going to be less cost people because as Erinn talked about we're on Sky slope and a common system nationwide the ability to affect that change to a contract in a DA and have you not have it turn into a scramble to text major broker at night figure out how to do this and get it done for the title company in the morning is a game changer for a lot of people now if you put that in the context of high volume for a rainmaker. That stuff happens every week every month right there doing enough volume that that stuff's happening regularly. Now an agent doesn't do a lot of volume may not have that happen but once a quarter or a couple of times a year. Now the rainmakers and the big players and we have a disproportionate amount of those higher volume players coming in the EXP are painfully aware of what a huge value this is and the system you're talking about Erin is huge. The fact that Sky Slope is available nationwide the staffing is available in multiple time zones and we're not anchored to an old school model of a bricks and mortar location is a game changer like you said most agents don't go into the office a emergency which somebody will go to the office might be to go get a DA fixed. If they had to and they hate it.

ERINN: Oh yeah yeah. And it just allows you to have the opportunity to scale their own business. It allows EXP to scale and expand. And quite honestly if we need more help if our brokers are needing support we add brokers we add assistant brokers we've got people in place there to support our agents just through EXP crowd and our other technology. And it's just fantastic it's a tremendous system.

KEVIN: Absolutely. So let's talk a little bit more about well from the standpoint of revenue share and equity because I know this comes up right. The reason I want to touch on this in general terms is there's so much disinformation out in the marketplace. I know this was a factor for you. You're one of the early people that came on you've had this conversation hundreds if not thousands of time about what does this revenue share and why would I even pay attention to it. Tell me a little about the equity awards. There's so much. Even today I saw something posted on social media this morning about stuff it's just plain inaccurate and it's based on old information. They're talking about the fact that you know this is pre NASDAQ listing and the fact that there's all sorts of issues. What is your answer about revenue share in terms of how you explain it and why it's a big game changer for agents.

ERINN: Sure. I mean I look at revenue share as the company EXP paying me a referral fee for bringing great quality agents to EXP. It's as simple as that. And I can build my revenue share family my revenue share trade as deep and as wide as I want to by attracting quality agents that all they want to do is sell real estate. It's pretty simple.

KEVIN: And that's a good way to put it. I mean one of the things that I tell people that have broad reach. In other words sometimes people will show up and they're pretty active in the training community right they attend events because of their franchise or otherwise they know lots of agents all over the country. You know I talk about this being no different the payment methodology is different but it is like a referral fee and you hit that on the head in terms of the way I explain it but it's almost like your a virtual region. In other words when you hear people talk about like Pat Hayes or Mitch Ryback or Gene their region I mean in the case of some of these big revenue share groups they're in thirty forty or fifty states. Some people are five to six states pretty quickly because they end up knowing agents and then those agents no agents in other markets. And it didn't matter if it was a relationship that was done just on social media or it's somebody from an old franchise that's in a different market. It's one of those things where you know we're certainly not looking for people to come in and like in my old role at Keller Williams I was a team leader right. I'm not looking for people to become a team leader right. We're looking for people and the way agents are doing this is the natural progression of their business right. Either the fact that they have relationships and they do referrals for transactions or they know people because of previous trainings in that is the way that they attract agents right. They may attract a few or they may attract many. I mean Brent Gove is a perfect example of somebody who's got an enormous amount of agents in a short period of time. And I know you because CRS and otherwise have a lot of agents in different markets do don't you.

ERINN: Oh absolutely do. I've got agents you know connected from Alaska to New York and my revenue share group and it's fantastic because it's a great way for me to build out my referral business which is a good 50 percent of my business that I generate every year. But now my revenue sharing group can benefit from that referral base business as well.

KEVIN: For people that have heard that this is like some crazy MLM or a pyramid thing. This is no different than the franchise system that collects a royalty and gets paid into a pool and then it's paying regional owners. That's effectively a referral fee too. Right? Actually the same thing so if you've been misled to that you probably want to look back at this again. You know it's not anything that occurs or anything other than as Erinn said production right. The only way it works is if agents are with the EXP and they're in production and this is paid into a pool much like the pool that is paid off of the top with a franchise that's royalties. We don't collect royalties that he EXP. And so you can think about it somewhat similarly. And like you said it's a way to build out and grow your group over time and assist others to do it as well. I know I had a number of people on including an agent in Houston and he talked about the fact that a year into it that he was now starting to think about raising his splits for his team because the revenue share has grown to the point where he wanted them to get the reward on helping him build his business and he was helping them grow their revenue share as well. So for rainmakers listening to this if you think about this on a more broad basis this might prevent you from having that constant turnover and push poll conflict in the team environment right and a lot of the franchises I've had several guests on that said this is I never felt like I could retain people right. What was the next step for him if talent showed up. I'd always worried they'd leave. I want to go do something different in the EXP world. You hear person after person talk about the fact that they want team members to succeed. Brent talked about this tourney talked about this in Dallas and even if they want to go form their own team you help them. We're all shareholders. We're all based in the same direction and that's a big difference from a cultural standpoint don't you think?

ERINN: It's a huge difference from a cultural standpoint and I think that's one key myth that is pretty prevalent with people are the naysayers about the EXP. We are not a recruiting company if we're recruiting company. We would be out of business. We are producing company. We want agents that are in production that are building the revenue so we can all take part of it and share the revenue revenues. Sure it's just for expense.

KEVIN: Well and I think a big inflection occurred this spring when Brett Inman came up. And as you're aware was up in your town interviewed Glenn and a number of other people and the article came out and I think it raised more than a few eyebrows when he declared that EXP in his opinion based on his conversation with Glenn was going to be essentially the NRT of the cloud and you know put a stake in the ground and basically said 50000 agents. And I think what really blew people away was the 50000 agents and the date that he put in there and how fast it was occurring. You know with a company ending last year at 6500 and change being at 12000 now I think it's easy for people in the industry that have been around and seen this picture before to now look at and go yep 50000 agents this is in sight now. And if the company continues to execute they'll get there. And this is a whole different world right you at the top of this interview you were talking about three hundreds thinking about getting to 2000 agents was gone. How long is that going to take us.

ERINN: Oh my gosh yes and that was painful work. People don't understand all the work that goes behind the scenes to build out EXP not only in a new MLS but in a new state. It's monumental. I mean it can take a year up to two years to open in states. I we're still one state that we're not open and yet because of regulations we do everything that we can to be compliant and make compliance not only for the local and state boards but the MLSes in Alaska for example they require a very small bricks and mortar office with a sign facing the street. So it can be a very long and painful arduous process to become open in every state and now we are not. This is another reason why we're seeing such success in such monumental growth. All of a sudden it seems it's because we're able to add agents and almost every single MLS across the nation and Canada.

KEVIN: Well absolutely and I think if you look at the franchise system that has profit sharing right. There's enough former members of that company that are here now that have been here long enough. Sherry Elíott is one I did an interview with her and there's a number of others. There's probably hundreds at this point. Now we're making comparisons right. And so the conversation in the marketplace used to be it's not going to work. Nobody is going to make any money with revenue share it doesn't work. You know you're making a huge mistake and that was almost a quote verbatim from Sherry Elliott. Right. And she's now able to have a conversation and say here's why I used to make. Here's what I make now. And here's how I did it. And Brent Gove can do the same thing. You know a number of them can do that and there's literally hundreds of them. And I think that's helping as well and for scaling perspective we're throwing a lot of numbers around what you talked about having in the entire company four years ago. The company is adding more than that per week at this point right. Yeah. Way more than that at this point. And so some of that is the build out and the success we've had and all that hard work that's occurred. But I also think that we've hit that inflection point. You talk about the hockey stick where at this point especially after the Nasdaq up listing we've got enough disclosure information out there. We've been accepted on the Nasdaq. You can point people that are those S and C in the disk profile they say just go read the filings you'll see all of the data there you'll see all of the full disclosure and it takes away a lot of those concerns. Plus they can look in the marketplace and go wow that was the number one agent for that franchise that actually just left. Oh there's another number one agent Northern California for that franchise. There's a number one agent from San Diego. It doesn't take too many of those for the trickle down effect of you know ending up at 350 or more agents a week coming in nationwide and we're headed to a much bigger number than that. It's going to be the opportunity and the challenge for the company but the good news is you talked about the systems are all in place now to take advantage of that. So Erinn I have a question for you. Now there's somebody listening to this right. They've listened to the first part over 20 25 minutes of us talking. If somebody is interested in some of the key factor right they called you up on the phone and said hey why EXP what would be the two or three things from a due diligence standpoint you would say you definitely need to think about this this and this.

ERINN: Oh absolutely definitely due diligence read about you EXP on the EXP world holding site. We have a lot of information there that talks about the very most specifics about the company about exactly how the revenue share program works about how agent ownership works look into our stock. It's EXP I is the ticker symbol. And we're now traded on the Nasdaq. Seek advice from your accountant or your CPA definitely have them look into the background of it. You know also meet with an EXP agent has been in the business for a while get perspective find out what their pain points might be. Find out what the huge benefits are for them about working with the EXP and just find the story learn the background.

KEVIN: Which is fantastic. Erinn what I would like to reiterate and I've done this on every interview is it doesn't matter who introduced you to the EXP right. It could have been a fairly new agent. That was the same franchise you were and you're a mega agent ask that agent to get you in touch with Erinn, Gene-Frederic myself anybody. We have every guest on this podcast give their contact information. Doesn't matter how you heard about the EXP. We're all here to make sure you get connected with the right people to do what Erinn suggested and there are plenty of people some of them would be peers. Some of them maybe a little ahead in the business of where you want to build to that we'll be happy to share their story of coming over. It's not a matter of them having any kind of concern about the fact that they didn't introduce you to the company. That doesn't matter. As we've talked about there is a shareholder program and we're all shareholders. We want great agents to join the company so I know Erinn you have these conversations with people all the time you talk with somebody in the Pacific Northwest. For me the very first month I joined the company. And you know it's one of those things where it's just part of the culture of the business and this is something that from the outside I don't think it's very well known. So again if you've not been introduced to EXP you need to get in touch with somebody. Erinn will be giving her contact information at the end of this interview. You can certainly reach out to somebody in the marketplace if you look in your MLS and you see somebody you recognize may be happy to chat with you about it. If you have been introduced to EXP and you want to chat with somebody ask them to get in touch with their sponsor or go to the podcast look in the notes or listen in the end here where Erinn gives her contact information or any of the other guests on any other podcast interview. We're all happy to talk with you or get you pointed into the right direction if there's somebody else you should talk to beyond us. Anything you want to add to that Erinn before I get your contact info for and listeners?

ERINN: I just have one favorite story that I love to share with people about the EXP. One of the biggest pain points for people is where do I go to work. What do I do without an office space. You are not bricks and mortar. Well I encourage them. OK get creative. Think about this. Why do you need to work in a real estate office in competition with other realtors. Rethink this. We have one guy with the EXP who did something bold and I just love it. He opened up shop in a car wash a drive through car wash. And I just think this is brilliant. He branded his cards with a car wash. Basically a little punched sticker thing and hands them out to people as they come to the car wash. Once they hit 10 he gives them a free carwash. He's got a constant steady flow of business coming through it's like a revolving door and he's actually built his business up through patrons of this carwash. So if you need bricks and mortar space. Get creative. Now part with an attorney partner with a title or escrow company or one of your local lenders. We encourage you to branch out reach out and really expand your network that way.

KEVIN: Absolutely. That's great information and that's a good example. I mean we also have agents that are pulling together like in San Diego where they have 3 regional sort of we work type of locations that they've set up collectively between the entire big groups of rainmakers and teams and agents as they come in to join the EXP. It can get in and subscribe and get either a hot desk or a regular place to work. There's lots of solutions. I have yet to find anybody that's a hard stop for there are so few agents that if you don't walk through it they can't figure it out sometimes but when you talk to about it they're like oh yeah I could do that or I could do this and as you just described there's a great business case for why you would want to do something different. I mean sitting in an office where nobody is going to come in. So Erinn before we drop off help somebody reach you if they like to talk with you live about the EXP.

ERINN: Oh sure plenty of ways you can reach me either on my cell phone which is 3 6 0 3 9 8 3 8 8 3. I'm on Facebook as Erinn Nobel. You can also reach me via email. It's [email protected] and I'm also on Voxer as Erinn Nobel.

KEVIN: Fantastic and just kind of a hint for listeners. Erinn didn't mention it but if you're looking schedule a call or connect with her one of the best ways would be to text. And then you can catch her that way and do it or send or an e-mail. We're all fairly busy but we're all of the culture that we want to make ourselves available and sometimes rather than leaving voicemails or chasing people around that Sims tends to be the easiest thing. Any final thoughts before we drop off today?

ERINN: Not that I can think of top of mind but if you're in the Pacific Northwest Alaska Canada I'm local and I'm more than happy to talk with you.

KEVIN: Fantastic thanks for coming on the show.

Thanks so much. Kevin's great.

Today we talk with mega agent Tom Daves from Sacramento Califonia. Tom was previously working with Keller Williams being a top world wide agent. As a team leader he runs a large successful real estate team. Tom talks to us about his decision to move to EXP, why he did, he touches on the real estate market change, equity, growth and revenue share and explains how much of a game changer his transition has been to his life and business. 

Learn More about eXp Realty - Click here to watch a quick 7 Minute Intro Video.

Remember our disclaimer: The materials and content discussed within this podcast are the opinions of Kevin Cottrell and/or the guests interviewed.  This information is intended as general information only for listeners of the podcast. Listeners should conduct their own due diligence and research before making any business decisions. This podcast is produced completely independently of eXp Realty and is not endorsed, funded or otherwise supported by eXp Realty directly or indirectly.  

In this episode

• Being Sceptical about EXP
• EXP in Nasdaq
• Market Change
• Why Join EXP
• EXP as an Exit Strategy
• The EXP value proposition
• Equity and revenue share opportunities
• Marketplace disruption
• Due Diligence 

Want to Learn More about eXp Realty?

If you are interested in learning more about eXp, reach out to the person who introduced you to eXp or contact Tom to inquire or ask questions.

Contact Tom:

Call at 855 Tom Daves.

Or email at [email protected].

Links: www.EXPCloud.com

Takeway

The pain the other great mega agents that are coming on board and as well as the alignment with amazing team members that we have. So yeah it all came together at once.

Transcription

KEVIN: Welcome back to another episode of EXP explained podcast I am host Kevin Cottrell joining me today from just outside of Sacramento California is Tom Davis. He is the team lead from the Tom Dave's real estate team. If you're in that Keller Williams system you undoubtedly recognize Tom's name in his team's name. They were the number one team for several years running in the Keller Williams system nationwide and Tom runs a business on the team that does multiple hundreds of millions of dollars per year. A very very large business very successful businessman in the real estate business he's been in the business for quite some time. So when I heard that Tom had made the move from Keller Williams as a large multi hundred million dollar producing team I wanted to find out his insight on why he made the decision to join the EXP. What he shared with me, I know he's going to be insightful whether you're a team lead on a smaller team or your team lead on a large team like Tom's including expansion teams. Please stay tuned for my interview with Tom Daves.

KEVIN: Welcome to the show Tom.

TOM: Hey Kevin. Thank you.

KEVIN: Oh I'm looking forward to our conversation. Excited to share your story and talk a little bit about the big change you made over EXP. But before we do that why don't you give us a little of your background. Obviously a lot of our listeners probably know who you are but once you get a little bit of your real estate background talk a little about your business before we dive into the big change here.

TOM: No I appreciate it. Absolutely. I've actually been in the business for 40 years. Kevin I started when I was 12 at a very young age and started right away and worked with traditional real estate sales and got into management and had a couple of different Remax brokerages and also worked with Oreo's with Flip's, Blackstone private equity team so pretty much seen every single economic cycle and it's been an amazing tour so far. I'm really excited that I'm now at EXP and I always say real estate you know is very very exciting and you can go from the hype of exploitation to the depths of defeat within the same 60 seconds. So it's fun it's exciting and it's all mindset right.

KEVIN: Absolutely absolutely. So I think the question and certainly for me and everyone else when you announced you were leaving Keller Williams. You were the top agent worldwide for five years so this is the question I have someone who has that big business right. It's Mission critical it's important you're the top guy at Keller Williams worldwide for five years. This is an important decision. It's a strategic decision. What led up to walk us through a little bit of the process and why EXP.

TOM: Okay great. So as I briefly mentioned I think my favorite saying is Wayne Gretzky you have to skate where the puck is going to be. And I've been blessed enough to position myself in most cases ahead of the curve and I head of that economic cycle whether it was traditional Oreo Flipp's you know hooked up with Blackstone private equity sold them like 600 homes in a year and a half. And the team and don't get it wrong. You know the team was amazing and Keller Williams was amazing. I was there for 18 years. I have nothing bad to say about them. But being a top agent is not always what it's cracked up to be. Candidly the margins weren't always that good. I had some great years and I noticed over the last few years that the margins were definitely shrinking and the market is starting to crown the market is starting to change as well. And there's no doubt that the market is shifting and it's technology based cloud based you know with all of the different companies that are coming online. Zillow, Redfin, Purple bricks, Amazon and they are all engaging in real estate. There's no doubt that technology is the future of our industry. And plus the consumers that consumers want and instantaneous communication at their fingertips. So that was you know one of the main reasons was the economic model and the cloud base. I literally when I made the move and changed over to the EXP realty I cut my expenses in half which was pretty amazing. And my very first month I had a 42 percent profit margin.My first month here which was pretty awesome. Pretty excited about that. Not to mention you know the stock EXP were publicly traded company as well as the revenue share and really having an exit strategy as a leader. I always feel that we need to seek out opportunities for our talent for our organization. And one of the problems that I've always had is to keep that ceiling of opportunity far greater than what anyone could achieve if you don't you're not going to be able to keep any talent. And it was becoming a little bit of a struggle for me whereas with EXP with the three types of income the commission income the stock for building are well as well as the revenue share it really truly provides an exit strategy for myself, anyone on the team and anyone that seeks to find it with literally no capital risk which is pretty cool. And the final is to have the opportunity to partner and align myself with you know Don Yokum, Randy Bird, Brent Gove, go and Gene Frederick. I mean it's just amazing that to align yourself you are the sum total of the four or five people that you hang out with. So that's pretty cool. And there is a saying that I really like is not always the assignment it's the alignment and that's quite frankly why I made that change. It wasn't easy. It was tough. But that's why I made change and that's why some of the biggest minds in the business are going after this thing.

KEVIN: The question I have for you. I'm glad you brought up the margins. And one of the things I want to talk about is and I don't know if you're involved in the early MREA early 2000s when they had everybody in Austin for those mastermind's. I used to be with Andy Allen and Aaron Lancaster and they had that one of those mammoth early teams that was doing 600 transactions a year more. And what we found was exactly what is talked about which is there's a lot of sexiness to high volume and high transaction volume but the margins can be rail thin. You're subject to market conditions changes keeping talent attracting and recruiting and all that becomes a big machine. And I found most interesting your comment about instant profitability and margin increase because really if you look at it from the standpoint of the originals called the core value proposition in the MREA book about what you should be making your numbers went from where they were which undoubtedly was a lot less to you called it 40 - 42% which is sort of the lauded number that the best of the best in that model should hope for. Now one of the realities is you know I'm from Austin you know I joined Keller Williams very you know probably pretty close to when you were involved with them as well. And you know Gene was my mentor and trained me and then I was a team leader so I was around a lot of this and that was my first observation. I'm glad you brought it up because I think the marketplace is trying to figure this out right. You know there's a couple of challenges with big teams. You touched on one which is you know like you said it's not always awesome to be the biggest guy on the block with the most volume of people and expenses because the margins can get thin. But for listeners. Here's an example of an enormous operation that suddenly had 40 percent whereas before and you don't have to tell us necessarily what it was. But I would imagine you were probably down in some pretty low numbers where you had to watch things carefully and things could go south I'm assuming.

TOM: Oh absolutely. And like I mentioned the margins were definitely shrinking. Yeah I was top agent with KW And you walk across stage and get your plaque but it's all about the bottom line of the profit and it did take me a few years to learn that realized that I think the first half of my career was all about success and walking across the stage and kind of all about me. But the second half is about significance. About pouring into others adding value and the bottom line right. They get significant.

KEVIN: Tom the question I have is in the traditional teams that the retention of talent sometimes is hard right. They want to go do their own thing because they can only grow to a certain capacity and income level and they don't have the buckets of revenue share. They don't have stock. And so the comments that I'm getting from guests again and again are that my environment and my team from a standpoint of wealth creation for team members is different now because I can help them and mentor them. So it's not just one bucket production in their income that comes from that they can build revenue share they can have stock. Are you looking at that in your operation as being something that you're going to basically utilize for team members as well.

KEVIN: Absolutely. And I think one common mistake that real estate agents do is they don't treat their business like a business and they don't think long term. So many agents and brokers are on the real estate cycle. Good month bad month. But if we begin with the end in mind and we think long term then we'll be able to build a plan and a strategy with a vision to achieve the goals that we really want to achieve to live that big life. And that's what it's all about you know whatever that is.

KEVIN: And that's true. And I've heard from guest after guest and you know Jean and I and you and and Don Yoakam and others are talking to a lot of people and the ability for people to create the different income brackets that you talked about is a game changer it just doesn't exist right there's nothing wrong with the franchise systems. They just have not created an environment where that exists in other words. I've got a key team member and they want to go off and do the next big thing, normally and quite often it is go do their own thing have their own team. Well in the EXP world what we're seeing again and again and again is they start looking at the bucket of revenue share. They start looking at let me accumulate stock the way that we can accumulate stock and so it's creating a different dynamic especially for the teams that are coming into the EXP envelope where the rainmakers and the leaders who are in these teams are saying everybody's trading everything different. They're not inclined to run off and go do their own thing or even talking about it like they were they're talking about you know hey Tom tell me how to go do this. I want your help. I want to go get revenue share and I'm assuming that was part of your equation too you know to reward talent and attract people because not only are you known throughout the system that you just came from but you're well-known enough in the industry that lots of teams are going to pay attention to what they're going to hear on this interview and what they hear from you and Don Yoakum and others which is this is a game changer isn't it.

TOM: Oh it really is. And EXP just totally provides the structure and the ownership opportunity that most brokerages don't. And this structure vital to maintaining a profitable real estate business and creating additional income just being in a constant state of growth.

KEVIN: Which is absolutely true. So imagine rolling back to when you were observing and you were in sort of the big franchise system and you were starting to see significant movement because it has been going on for a little over a year where we had really big movement among teams including large teams. A lot of listeners are in that same position today. And I want to kind of talk a little about due diligence and key things that if you were sitting down and having coffee with them you would want them to be thinking about in other words you were where they are before now you know what you know. And as Jay Kinder says once it's seen it can't be unseen. So let's talk about some of those things from the standpoint of putting you back in your you know "I'm the number one guy worldwide at Keller Williams. I'm seeing this happen". What are the things you know now that you'd want somebody listening to this to say if I'm a team leader for a real estate team a big production team what should they be paying attention to how should they approach this from a due diligence standpoint.

TOM: That's a great question. So I would take a look at the books. Take a look at the numbers. Take a look at the economic model. Talk to others that have gone before you. And you know things that to be honest I was a little bit skeptical that I mean I just thought EXP with all of these ways of creating wealth and opportunity. It just sounded too good to be true. And I just did not believe that it was sustainable. But when the Federal Trade Commission approved EXP to go on the Nasdaq and will become publicly traded. It was a game changer for me. I'm like OK well that's it. It's a done deal. So definitely a way to go.

KEVIN: The other thing that's a factor obviously the up listing on NASDAQ is huge. Right. It's a credibility thing you don't get uplifted in the Nasdaq if there are holes in your business model and things are not sustainable and you can't go essentially out in the marketplace if they look at it and go oh this is never going to work long term. Right this is not the way it works in Nasdaq. So the second thing that I think you mentioned it's important to circle back to is the fact that too many it looks too good to be true. And you know my advice always is you know there's guys like you rent go Jean-Frederic, Pat Hays Scott and Tracy Lewis, me. There's a number of people that are available to you as resources Don Yokum will be another one. And you know that's why we always before we wrap up in these interviews get the best way for contact information. Most guests will say here's how you reach me and text me and I'll be happy to talk to you because they'll be other people that are in similar situation to you regardless of how they learned about the EXP they're going to be like well "I'm skeptical too. I need to talk to somebody" and that is in my mind a key due diligence step. In other words don't sit there in an envelope either hearing the words you're in a vacuum or an envelope you don't see any outside information and looking in the envelope going this doesn't make any sense to me. It looks too good to be true and you're trying to make your decision in a vacuum. You need to talk to people that have come before you like Tom said you need to have those reference calls and that's part of the process. And so part of the reason we do the I guess interviews so you can hear in the parties like Tom's words why they did what they did. But I would imagine that in this process Tom that you didn't just do this and figured out on your own you did talk to people did you.

TOM: Oh I did. Absolutely. I did a deep dive. I spoke with two different business coaches both my coaches spoke with several different people many of the agents that have already come onboard with the EXP and asked them what they would do differently. You know if there were any snags or any concerns and every single one of them told me the main mistake that they made was they should have joined sooner.

KEVIN: You know I mean frankly that is the number one thing that we tell people which is even if you decide it's not for you. I mean if you're a rainmaker and a team you know whether you're similar level and scope to what Tom is or maybe you have a team that's a much smaller team. The biggest mistake you could make is being skeptical of not doing something because definitively if you waited three four or five years it's going to be a different opportunity. It's kind of like the people that were at Keller Williams When you talk to Jean-Frederic and others that got in in the early 90s and got significant profit share built up and they are at the top of the tree. It's the business opportunity with a rapidly growing business. EXP is growing faster than the franchise system ever did because of the way it structured its a cloud based brokerage. So that would be my advice too which is even if you ultimately decide to not do it take Tom's advice and dig in and talk to those people do those reference calls. Figure out if it's a good fit for you. And then dip the decision but do it sooner rather than later. Because what ends up happening is more and more of your peers and your competitors in the marketplace are going to be over and they you know look up and if you waited you know God forbid three four or five years you're going to see a lot of people coming over and I'm sure that was part of what you saw. You started see what started slowly last fall. You know and then you had like Jay Kinder or Michael Reese and some others come over and then mega team after team came over in the last 12 months. I mean it's a crazy number of teams after Jay came over in November and I'm sure it will be hard to miss that in the marketplace.

TOM: Like I said many of the best minds are going to after this and also I think one of the things that was happening was my pain was increasing you know as I mentioned the margins were shrinking. Just different things were happening with the growth of the team and the numbers and you know the only way for me to keep the numbers was just to you know we closed 350 transactions last year. Okay keep these margins we need to do 450. You know let's just do more volume let's just do more deals hire more staff to crank up. And so the pain I believe was getting so great that this opportunity was a no brainer for me. You know it all kind of came to a head all at once. The pain the other great mega agents that are coming on board and as well as the alignment with amazing team members that we have. So yeah it all came together at once.

KEVIN: Tom here's what I would say too is because your business is so gigantic is the top guy worldwide Keller Williams. You look and act a lot like we're also seeing. And you know this because you and Yokum are talking about it is lots and lots of independent brokers whether they're small at 30 40 50 agents 25 agents or hundreds of agents are all waking up with a similar problem what you had which is margins are thin. The industry is shifting. God forbid there is a big market shift and they're caught on the wrong side of it with EXP growing around them. And I know you're seeing it and I'm just saying this for listeners benefits what Tom saw and Tom accomplished is not unlike why the independent brokers are what Gene and I see as one of the huge trends that's going to happen in the next three years is the conversion.

TOM: Oh absolutely.

KEVIN: So one of the things I always like to ask is Tom before I get your contact info for listeners in case they want to reach out to you is there anything that you hoped I asked you on the podcast today that you really wanted to get out about EXP and watch what's going on over here that I didn't ask.

TOM: No that's great. I think we hit the high points.

KEVIN: Okay fantastic. So again I always give this preface. It doesn't matter who got you interested in the EXP Tom and Jean and I or Brent Gove or anybody you hear on these interviews is there as a reference to help you make the right decision. Tom's the same way I'm going to get his contact information as far as the best way to reach him. We're going to turn right around and send you back to whoever introduced you to the EXP that's the cultural agent's point in the same direction. So don't feel sheepish if you're a team leader on a big team and this is mission critical for you as well and you feel like Tom's e-mail shoot straight with you and he's enough of a peer that you think he's the right guy to talk to, Tom how do they reach you.

TOM: Great the best way to reach me is to either call me at 855 Tom Daves. Or you can e-mail me at [email protected].

KEVIN: Okay perfect. I appreciate you coming on. And thank you so much Tom.

Thanks Kevin. Have a great day.

In today's we have Nicki Gregory from Amarillo Texas. Nicki was previously with the franchise system first starting as Mom and Pop and further working with keller Williams. As a team leader she runs a real estate team. Nicki talks to us about her decision to move to EXP, why she did, she touches on equity and revenue share and explains how much of a game changer her transition has been to her life and business. 

Learn More about eXp Realty - Click here to watch a quick 7 Minute Intro Video.

Remember our disclaimer: The materials and content discussed within this podcast are the opinions of Kevin Cottrell and/or the guests interviewed.  This information is intended as general information only for listeners of the podcast. Listeners should conduct their own due diligence and research before making any business decisions. This podcast is produced completely independently of eXp Realty and is not endorsed, funded or otherwise supported by eXp Realty directly or indirectly.  

In this episode

• EXP as an Exit Strategy
• The EXP value proposition
• Equity and revenue share opportunities
• Marketplace disruption

Want to Learn More about eXp Realty?

If you are interested in learning more about eXp, reach out to the person who introduced you to eXp or contact Nicki to inquire or ask questions.

Contact Nicki:

Phone 806 316 4498

email. [email protected] 

Links: www.EXPCloud.com

Takeway

Everyday we say that we're just blown away. We say mind blown every day.  It's been a big blessing for my team and for my family. Now we're happy. Nicki Gregory

Transcription

Kevin: Welcome back to another episode of In The Cloud. The EXP Realty Explained Podcast. I am host Kevin Cottrell and joining me today is Nicki Gregory from Amarillo Texas. Nicki was previously with the franchise system and as a team leader she runs a real estate team made the decision to leave the franchise system and join EXP realty. It's going to talk about her decision to do that. What drove it how revenue share and equity in the EXP realty model is making a game changer difference in her business and her family's life and the ability for them to fund some charities they're interested in. I think you'll enjoy the conversation as Nicki shares why she made the decision to join you EXP realty. Stay tuned for my interview with Nicki Gregory. Welcome to the show Nicki.

Nicki: Hello.

Kevin: I'm looking forward to chat with you today. For listeners that may not know your name and where you work why don't you give us a little bit of background in terms of her real estate history.

Nicki: Ok my name's Nicki Gregory and I'm in Amarillo Texas. I went to real estate school in 06 and I did not get my license until 2011. My husband and I flipped houses for landlords and I didn't want to get it until 2011 so I started selling houses for other people at that point. Started as a Mom and Pop here in town. And then I moved over to KW in 2012 and I've just been selling ever since.

Kevin: We've actually had a couple of people on the podcast that started out in the investor side flipping property and working on that side of the business and that went into residential production. So let me just ask you some questions about your business because I know a lot of people listening to this will be real estate agents. Do you have a team. Are you an individual agent and kind of volume do you have.

Nicki: I do. I have a team here. The Red Door group and we do about around 10 or 11 million.

Kevin: Excellent. So you mentioned that you were with Keller Williams most recently before joining EXP. What led you to the decision to take a look at the EXP tell me about how that happened.

Nicki: I kind of you know you start thinking should I look elsewhere or should I be looking at other options actually really exit strategy was probably the biggest thing that was coming into play with conversations with my husband and I and so we have a friend who does some mission work in Thailand and we have been fortunate to be able to bless them and help them a little bit. There she has homes for orphans. Well rescued kids from their rescued from human trafficking. And so we had been able to help her some but we really have been discussing more and more how could we do more. And also our exit strategy on same conversations and we were looking and thinking or towards us maybe opening our own brokerage me getting my broker's license. So I started researching that and looking into whether that would be a good fit for us and not just always seems like where everybody thinks they're going to end up. And so I started looking into that and in the process of looking into it I saw a video with Jay Kinder announcing that he had to EXP and Gene Frederik's video about him owning the blockbusters and several of those videos were coming across my news feed and I'd stay up late watching those and realized I don't think at my age that this is you know if this is what's happening to people who already own brokerage's that's not the right direction for me. And so I don't want to be in a year or two you know having to make the same decisions right after I just started up a startup you know brokerage so that is how it happened. So I just signed up under Jay Kinder where we are.

Kevin: Excellent excellent. Well you know you echo what a lot of people say especially if they're in a franchise system you know if you're looking at exit strategy or what the next steps are usually it's sort of unidimensional and I'm sure you went through some of this challenge which is if you're coaching with somebody they want you to do more production and eventually figure out how to get out of that and have a team that you just lead and I think that that's sort of a challenge for many people. Right. You know I certainly had a team in St. Louis previously and we did like 250 transactions a year and I had lots of volume but it wasn't something that was going to be easily converted to me running it passively or just leading only. And you know what. So when you talk about exit strategy I wanted to tie that down for a lot of the listeners because there'll be plenty of them that are out there thinking "well I don't want to be doing listings" if that's what they do which a lot of our listeners will. "And I want to just be listening and selling houses 15 years from now" so exit strategy in my parlance and I'm assuming it's the same for you is trying to figure out how to not be so dependent on others if I stop working my income goes away or it dramatically reduces because team members are not as proficient as me and or if I want to start setting more money aside and net more I going to really ramp up my production and I would assume that's part of your challenge as well when you were looking at that initially.

Nicki: That was the challenge that was presenting itself and that I was seeing people who were actually moving over to EXP because they tried to sell their brokerage's and or surprised at what they were the offers they were getting were not you know sufficient for retirement and so that became a concern for me.

Kevin: So you're heading on another topic we're actually seeing and I've interviewed several of them lots of independent brokers who are decided to become powered by the EXP and so what Nikki's referring to is lots of the independent brokerage community is looking at exit strategy as well in other words. There has never been a time in which independent brokers unless they're enormous have gotten great offers. Right? You have to be of huge size to get anybody that excited and interested in you and other than that your margins and your income are to the point where you're going to get basically just somebody who says I'll do and earn now or I'll give you some nominal amount of money and you can stay around for five years and help us run it. And most people don't want to do it right?

Nicki: Right. No thank you.

Kevin: Yeah exactly so because of the branding and and you know Mitch Riback is an episode that somebody can go listen to out of Florida. Mitch had a huge multimillion dollar offer on his brokerage and he still elected to become powered by EXP. So what Nicki is talking about is something that's sort of an industry dynamic right now. You know if you own a franchise and you listen to this you've got a little bit of a different challenge right. You're going to have to make your own best decision on what to do. But everybody that was excited that I've ever met that actually opened a franchise location unless it's coming up for renewal and they're in the window in the last six months where they can get out. They're not very happy right because they're are sort of stuck with it unless they can find somebody to buy it. So we don't have a lot of great advice for you of your franchise so that although we would tell you that there are plenty of them who have decided to sell and cash out who have come over and join EXP. So there is a path for you to get out of it you'll have to do your own due diligence and figure out how to make that happen. But you're in a little bit of a different spot than an independent broker. So you know just work your way through that process will probably at some point in the near future have somebody that was a previous franchise owner and they'll talk a little about how they were able to unwind there by selling their operations. So Nicki I want to talk to you about the EXP value proposition because you know you you came through the process and you looked at wanting to be able to work with that organization and you know make donations and help them with that awesome thing they're doing to get people out of human trafficking. And then in addition to that you wanted to look at retirement. So how long was it before you kind of analyzed the equity opportunities and the revenue share that had kind of hit you up the side of the head and you went hmmm. This is completely different than when you know what I'm in now..

Nicki: A day or two. I mean it's like Jay says all the time when you see it you can see it. And I was one of those that had the EXP Somnia you know watching the videos the first night and thinking I mean I can think of a reason that you would not do that and then also to see that opportunity for the people on my team which that does exist really you know elsewhere for team members not just team leaders to the same level. And I wanted to be able to offer my team members more. And so yeah it didn't take me very long.

Kevin: And what Nicky is talking about is the EXP insomnia or sort of just diving off the cliff into the information is a phenomenon we've seen. I've interviewed another independent broker who joined EXP where he was a previous client of mine on the consulting side. And I didn't go to him because of the way he ran his business. He wasn't potentially a good prospect. And his quote when I talked to him about it was he came to me on a Thursday. He knew I acquired a lot of independent brokerages and asked me who I knew that might be a good conversion fit. And I got a email from him and a text like midnight on Sunday and he's like I haven't slept. Can we do a chat tomorrow. It's interesting because as Nicki said the phenomenon is that once you get into this it's hard to fathom not digging into it and figuring out validating how you actually the world and I want to come back to something she said because we hear this a lot from rainmakers of teams. One of the challenges in addition to the one we already looked at is it's hard to think about an exit other than people and the this goes back to the star power days right. Everybody talked about will how much did you get for your business and what was in that era was selling your list than your database and they would sell them and they would potentially get the effectively referrals or referral fees or other fees on the back and based on that volume and everybody a few years into that figured out that that wasn't very much money. But by the same token there wasn't anything available for team members. Right? You know if you're in a franchise system and there are some of them Nicki and I come from the same one right there all about teams. But what they don't talk about is sort of the dirty little secret which is it's all about conflict right. The Rainmaker owns the team the the team members are there. And there's a built in conflict if they get to be what you two like to be attracting which is talent. And now you can't offer them the huge opportunity in those cases that they want to go start their own thing. Then one of two things happens they either leave the market center and go do it on their own somewhere else in the marketplace or they stay there and there's a little bit of strife and conflict. Well in the EXP value proposition because of revenue sharing equity and the ability for teams to actually develop talent from within. We've seen people tackle this a couple of ways. I mean certainly with revenue sharing stacking I'm sure this is the direction you went Nicki which is you were able to actually create wealth for them in the process of attracting more and more agenta and well we'll get into sort of your success with revenue sharing a quick period of time in a second but the second thing that we're seeing people do and this is just meant to be a comment for people from the outside. And this may or may not surprise you. Nicki there are a lot of people across the country that I'm talking to that are going to above market average meaning typical for market splits with agents and this is one of the ways of rewarding agents in addition to revenue share because they can afford to pay it right there are some in Houston Texas where over time as their revenue share grows they're doing a retention strategy with team members where they're paying higher splits and this what's just keep going up because their primary wealth over time is not dependent on getting as much money as possible on their team production.

Nicki: Yep. There's So many different opportunities that we can cover probably enough that we find new ones every day. I can tell you that.

Kevin: It's something that in a production business and these are some of the things that are not intuitive to people while we have this podcast from the outside is not only do you have the non conflict right in other words there is equity opportunities and if you watch some of the information and there's a link in the podcast notes the shows an intro video when we're talking about ways that people are in equity and revenue share. Team members can actually start to create some wealth by helping attract agents to the company and they do that because they interface with a lot of agents so you have a prolific team. They're out there doing transactions with their agents on that on the team's business and or are meeting agents at events networking events or just out in the marketplace. And now is that a retention tool but it's a wealth tool for them isn't it.

Nicki: Yes which is the exact opposite of what you were just talking about that we're finding now making friends with no direct competitor are now were able to work together as even a larger team in our community. And it's been pretty amazing to watch and to experience people that you've known for years but now it's a different thing it's a different relationship a different environment that we are all helping each other. It's pretty pretty cool it's fun. We're having fun..

Kevin: And that's something that if you listen to Gene Frederic or about 90 % of people that I interview on this podcast everybody uses the same phrase which is we're having fun again and again. And because it's disruptive and we're all owners of equity in the company we're agent owners if you will. It's causing a different dynamic. One the politics are gone and you know she just talked about this in her marketplace. I had a guest on that I interviewed recently and she was the number two team in a Dallas Fort Worth market center. The number one team came over like a week or 10 days before her. Right. So she made the comment she said We are collaborating so closely now in our marketplace and for the years that I was in that market center we didn't ever hardly ever talk if at all. And it's interesting because that's a dynamic that occurred moving from a franchise system and their culture and the way the business operates to the EXP system where people are all pointed the same direction. It's a culture that you shouldn't ever let anybody from the outside convince you doesn't exist. It is in one of the things that every guest on this podcast talks about is doesn't matter where you were introduced to the EXP by. If you listen to one of these episodes and before we wrap up today Nicki will give her contact information. Like every other guest does. It doesn't matter how you heard about it. If a guest resonates with you you want to talk to them and you want to get that you know and dive in a little deeper on it. It doesn't matter it's not a matter of you being sponsored by them or you being in their revenue share group. Everybody is pointed the same direction we all want to help each other and I'm sure as you said in your marketplace that's what's happening we're overall whether you were previous competitors or not you're disrupting the marketplace aren't you.

Nicki: Yes we are. That's why we call yourself the disruptors club here. So that's exactly what we're doing.

Kevin: And that speaks to the point of somebody listening to this podcast will be in a market you know whereas we're recording this the company between active agents and people and process onboarding is way north of 10000 agents. So we get a lot of well joining you might be on a state or a market where there's a handful of agents maybe looking around going well you know there's not a lot going in my market and I'm not sure what's going to happen. And I wonder if it's going to work here. You know it doesn't matter if you looked at two and a half three years ago in Dallas where Sherry Elliott talked about being the 16th or 14th agent when they have over 800 now. It's a matter of time in your market and I'm sure in your market things have started to accelerate since you've come over versus where it was when you first looked at EXP. It starts to go fast doesn't it? I know you said you've started to collaborate your marketplace. So with that as sort of a precursor to the conversation about revenue share even with the EXP for only a few months.

Nicki: Right. Just under four months.

Kevin: You came from a system like I did where you were and profit share system and it was hard to figure out you know when and if you're going to make money because it's a more complicated formula and it really varies by whether the franchise location is profitable and the person does production now in a revenue share model you and I first connected because I happened to notice that you were talking about the fact that you were blown away from your revenue share checks compared to what you used to see in the other world. Let's talk about that for a couple minutes.

Nicki: Yeah my post that I made that I think your are referring to is.. I'm a little shocked because I you know I was at KW all these years. And the first couple of years I was there I worked really diligently on recruiting and I got a couple of good checks and then you know lead dwindled down to I think my biggest one last year I can't remember. It was like 120. I think under 150 most checks are my last one I got was 18 dollars. OK. So this system works a little differently in which you're getting paid off the top that's the revenue share. And honestly I underestimated what my checks would be. And my last I don't remember what it was when I posted it but it ended up at the end of the month being about 14.44. Right at that. So the way I'm looking at that. To me I'm working at EXP for free. It's you know you take your cap and you figure with that is per month. Again why would somebody not want to do it now. You know anything more than that they're paying me to work there to be there. To me he brokered by them so I was amazed.

Kevin: Most people don't realize and people listening to this may not have a good perspective on and I come from the same franchise system and there's nothing wrong with Keller Williams it's an excellent well led company they have great agents there but they live by the formula and the structure they've set up. So the story you just heard is not an outlier. There are plenty of people even people with large amounts of people in profit share that don't make very much money. You're dependent on the particular market center or market centers to be profitable person and not be capped at it all to occur at the same time and it doesn't mean you won't receive profit sharing or certainly not representing that. But what I can tell you very definitively is there are plenty of people that have success in the profit sharing system that now come over and been around longer than Nicki has and they are typically at about 10 times the pay out. And you after a couple of months are already at ten times what you were making before. And it goes up from there. In other words because it's so much of a larger number off the top and it's certainly not representing that everybody gets the same results. Right. You know you have to have an agent. They've got to be in production. But this is not a typical right. You can look at the formula and you can make your own calculation. Her comment of it being a surprise as to how much bigger it was and how quickly is not anything other than her success in attracting people to the company and people asking that question because I'm sure your phone rang when you made that announcement you're moving in they're like whoa wait wait you're going to be why? And then that resulted in some initial retraction and then because you're visible in your market you have influence more agents came over and that number will typically for most of the people including everybody we've interviewed on these podcast episodes grow over time. But for tying this down it's not unusual that it doesn't happen very quickly right. If you're influential in your market or you are active in your market production you're going to have people right off the bat don't be surprised if it's not the first week or two that they ring your phone and say I want to talk to you. I don't know how quickly it happened for you but I bet it was quick.

Nicki: A day.

Kevin: I have another guest it's coming up in an upcoming episode. He's on the East Coast and he said if I didn't have a conversation with somebody in the first couple of days I was getting a text or another message saying well you don't like me how come you're not going to call me and talk to me about why you went over the EXP.

Nicki: Yep. Well I don't know if it's typical but that is what happened to so. Exactly.

Kevin: It's a pretty interesting and fun dynamic. And you know just for comparison I gave you the examples listeners that you know people were joining EXP in Dallas a couple of years ago and there were you know 16 14 15 agents something like that and now it's over a hundred you know they have markets like San Diego they went from somewhat the neighborhood of 15 or 20 to 100 in 30 days. So it tends to accelerate quickly. Don't get confuse that if you're a particular market whether it's large or small it doesn't have a big presence of EXP agents. That's not the norm for it to stay like that very long. In terms of any other things you want somebody to know about EXP and sort of what you know now that you've been here for a couple of months. Any other takeaways that if somebody... doesn't matter if they are at Keller Williams and a franchise like you and I were or they're just an independent agent what would you suggest that from a due diligence standpoint they should be paying attention to.

Nicki: I mean probably a little bit more for team leaders but also solo agents and that's the fact that you are not you know with the profit share we weren't really you know geographically limited but it did have that going on as far as my experience a little bit more but the opportunity here where I think it's going to really.. I mean it already is taking off but I think.. I keep telling my team you watch when everyone starts to understand that they can grow that revenue share anywhere. They're not limited to their market. So yes the market locally here is growing fast and this is a huge opportunity for us. But the fact that we're not limited really to this market and that we can... I mean there's we can.. any agent anywhere you know you can put in your revenue share so. When people start to get that I think it's going to blow up when they really start to get that.

Kevin: Absolutely I was a team leader like Gene Frederic in the Keller Williams system right so I can speak to this directly. I mean the norm for how I would receive an agent that would I'd be in discussions with me as a team leader was much more heavily weighted in the local market and in the process was set up and oriented around that. Right? I was in South Florida and I would from my own agents in my market center get the vast majority of any kind of referrals. Every once in a while they be somebody coming in that was referred from somewhere else. But that was certainly not the norm. Now if you listen to interviews on this podcast it doesn't matter if it's Pat Hayes or Mitch Riback or Gene they'll talk to you about the fact that their revenue sharing group if you will is now multi state and also in the provinces of Canada and in the case of many of them they didn't have any direct relationship with a lot of those agents. In other words Pat said I haven't directly interfaced with any of the agents although I've helped people that are in Canada for example or a lot of these states and he's that I think in his case he was in you know some worries about 800 agents now and his revenue share and they're in like 33 states including two provinces of Canada in addition to that. So what Nicki is talking about is a phenomenon that EXP is very distinctly growing agent agent. In other words the islands of a franchise system like I used to run of the market center where the vast majority of the opportunities are presented to a team later and they convert and it could take a while right. Or it may not convert. It's very different than for example Kevin or Nicki having somebody that we've done a referral with in Nebraska or Florida and or we know them from a C or S training event or some other thing or Gnomon line. Right. And they've they've heard about EXP and now they see that Kevin or Nicki announced they've joined the company and they ask questions. They're much more likely because of the process by which they're onboard it at EXP to convert. And it's a whole different thing than what occurs in a franchise system and so what what I've done is kind of restated the dynamic that Nicki is talking about and it is something that until you see it start to happen agent agent and sort of virally from a social standpoint I don't think you're going to have a good perspective on it. It is not unusual for somebody to be with the company for a year or two years at least half if they have a decent sized revenue share group. They've been purposeful about it. They brought in their own set of some number of agents. They then will have agents in multiple states. It's almost like they have their own little virtual region as a Gene Frederic and I like to call it anything else we haven't covered today and then I'm going to have you get your contact information in case anybody wants to reach you.

Nicki: I mean again and or just everyday we say that we're just blown away every day like we say mind blown every day because there's so much more we could cover but we're talking about mostly revenue share right now. But I mean just the fact that they make the splits to where people can afford to be on a team you know which is where some people need to be to get the idea that they need you know to learn the business. I could go on and on. It's been a big blessing for my team and for my family. Now we're happy.

Kevin: Great. I mean some of the stuff that like you said we can go on and on about is the company is highly highly focused like you are on productivity and lead generation right they're set up to support either solo practitioners or producers and teams both from the standpoint of the CAP system the splits and the ability to structure correct and then the tools right. As a matter if it's the technology tools including things like conversion are core or anything else is in my opinion second to none. So if you're an agent out there listen to this and you are productivity based and you are serious about your business you owe it to yourself to dig into it you know and go back to the person who introduced you to EXP. If you want to talk to somebody within the company ask them to find you somebody that's a peer producer whether you're a solo producer or a big producer or with a team you're a rainmaker or listen to this. There are plenty of us right does matter if I get the call. If Nicki gets a call or Gene Frederic or Pat Hays no matter who it is you'll hear it on every one of these guest episodes. We're all here to help you make the right decision. We're not perfect for everybody as far as a fit but we certainly are perfect for a large majority of the real estate producers. All right so once you give them your contact information just somebody listens and they want to reach you.

Nicki: OK. You can reach my cell phone 806 316 4498 and you can reach me by email. Nicki.Gregory [email protected] Those probably the best two ways to get me quickly.

Kevin: Excellent well thank you for coming on the show.

Nicki: I appreciate it. Thank you so much.

Today we have Dallas based agent and real estate investor Ian Flannigan. From an investment real estate agent to Ian has been in the real estate industry for over 15 years and has come a long way gaining a diverse background around investment property sales and distressed properties and has become an expert at it travelling around the country speaking on creative financing and topics. 

Ian talks to us about what attracted him to EXP and his transition coming out of a franchise system and joining EXP. He touches on the things that led him to decide to move all of his businesses including his investment business his brokerage business etc. over to EXP Realty  He brings a business owners perspective not just a listing and selling agents perspective. 

Learn More about eXp Realty - Click here to watch a quick 7 Minute Intro Video.

Remember our disclaimer: The materials and content discussed within this podcast are the opinions of Kevin Cottrell and/or the guests interviewed.  This information is intended as general information only for listeners of the podcast. Listeners should conduct their own due diligence and research before making any business decisions. This podcast is produced completely independently of eXp Realty and is not endorsed, funded or otherwise supported by eXp Realty directly or indirectly.  

In this episode.

• The Investor & Business Owner's Perspective 
• Creating Cashflow and building assets
• Benefits the Cloud provides
• Equity and revenue share
• Being the exponential earner
• Getting awarded EXP shares and becoming an EXP icon
• The compound effect on my revenue share & referrals 
• Predicting your income

Want to Learn More about eXp Realty?

If you are interested in learning more about eXp, reach out to the person who introduced you to eXp or contact Ian to inquire or ask questions.

Contact Ian: Text at  214 213 1737 

Links: www.EXPCloud.com

Take away

"you borrow capital you'll leverage it against a property and then you receive that cash flow. The reality is not too many people ever get to that point" Ian Flannigan

Podcast Transcription

Kevin: Welcome back to another episode of In The Cloud the EXP realty explain podcast I am host Kevin Cottrell. Joining me today is Dallas based agent and real estate investor Ian Flannigan Ian is going to tell us about his transition coming out of a franchise system and then working for a transaction based brokerage to decide to move all of his businesses including his investment business his brokerage business etc. over to EXP Realty and why he did that. He brings a business owners perspective not just a listing and selling agents perspective. Ian and I are going to talk about things ranging from equity revenue share and the other things that attracted him to EXP realty. Please stay tuned for my interview with Ian Flannigan. Welcome to the show Ian.

Ian: Hey how's it going.

Kevin: It's going awesome. I'm looking forward to our conversation now for any of the listeners the podcast that may not be familiar with you once you take a minute and give your background and history as far as real estate.

Ian: I've been in real estate for almost about 15 years and I was a young hairdresser in my past life. We all have that story right? So you know I read that book Rich Dad Poor Dad and made me realize that I was you know spinning my wheels as a self-employed business owner. I didn't own a business I owned a job and just like you know we have friends that are attorneys you know real estate agents. Well you know all that stuff that they had these commission businesses and stuff like that so I knew that I had to make a change so I started studying real estate and I started flying around the country go into seminars was like a lot of people I didn't come into the business through the licensing side I came through the investing side which I really cherish that information because I have a very intimate knowledge of how the legal process works with pre foreclosures. We know probate houses people losing their houses the tax liens. I mean I've bought fire damaged houses all kinds of very interesting distressed property situations. I've become an expert at it and I've traveled around the country speaking on creative financing and topics like that because I ran a big seller financed real estate model for quite a long time and like I said I wasn't licensed I leveraged to brokerage's one in Oklahoma City one here in Dallas and we used all of our marketing and we ran all of our leads through them. I learned the business on both sides so when I was drafting my own contracts two years before I ever got a license so you know the market changed and I felt like I left a lot of money on the table so I started. I realized that like look I'm going to get go ahead and get my license because I'm processing so many deals through my investment company. So I might as well do it so you know I got my licence I hung out with Keller. Keller was a great company at the time, for me it wasn't a good fit. When I moved my licence over to a 100 % shop and it was a much better fit for my needs at the time but I had a big exit out of my investment company and everything that I had built over the last nine years kind of came to an end and I knew that I needed to buy and sell houses I knew I needed to list and sell houses but I also knew that I had to build more cashflow and I needed to build more assets because I just made an exit out of a company and it was a very interesting time in my life because I went through a legal divorce. You know I went in business with these wealthy individuals that were coming out of it luckily everything the dust settles all right. I came out OK but you know I knew that I had to build something again and when I saw the model with the EXP I was like oh my gosh this is interesting because there have been nothing like it that I've ever seen. So that's how I got to be.

Kevin: Great! So you have a diverse background especially around investment property sales and distressed properties. When you looked at EXP you mentioned like myself I was a team leader at Keller Williams for a long time great company but the EXP is.. You know especially and I want to chat about this for a minute. It's a different model. When you talked about Rich Dad Poor Dad in thinking like a business owner that I think the industry has seen so there's a lot of noise and information out there that is confusing for real estate agents. In other words I want you to take a few minutes and talk a little bit about how you process this as a investor slash business owner because for real estate agents listen to this a lot of them have a commissioned sales job and they need some help understanding how to think like a business owner.

Ian: You know that that couldn't have been the more perfect way to explain that because you know being an investor we have to think about OK how are we going to get money out in the market. This is how our thought processes we have X amount of capital we can leverage capital and we're going to put that money out into the market either short term or long term and then we're going to get a return on it's going to be a four month timeline a six month timeline. So that's what we're doing when we're buying and selling houses right we're thinking of it as a business it's not on the other side of the track where when you're listing agent it's a different experience because you don't own the house you're not responsible for the repairs utilities all that other stuff it's just a different ball game but it's a great way for someone to be able to get into the market and that's what almost drives me crazy about getting a real estate licence. Was I did that in a couple of weeks it took me almost a year to get a licence to cut hair in the state of Texas as it was mindblowing how different it was but my point is you know getting into real estate is the barrier to entry isn't that you know it's not very difficult. So there's a lot of people coming in and they don't really think of it like a business. They don't know that they have to put themselves out into the marketplace and sell themselves as a business owner so they get stuck in just that hamster wheel of the commission side of the business still thinking of it from an investment standpoint is like like oh my gosh this company... Forget the name forget all of it just look at your balance sheet and what are you doing on your balance sheet. Right you've got income expense asset liability what are you doing to create income in your business that you only have a commission type of business you only have one source. So this is the way that I see it because I built a seller financed model by leveraging capital we would raise millions of dollars actually. We didn't raise millions of dollars until after we placed it because one of our limited partners was our lender. So we had in-house lines of credit and I was buying you know five to 10 houses a month that I was selling them on owner financing and carrying back a note and we were archiving basically building a big huge spreadsheet of notes right. So once my mind opened to that like I knew that there were so many different ways to make money in real estate but once you find one model that you can't replicate and duplicate... And that's what exactly what I was doing with seller financing I was buying a house. I was renovating that house and that I was selling it and carrying back a note. And the more notes that I could create the more money I could borrow because we had we were building. A balance sheet of. Assets. Yes we had debt on it but. Our cash flow was compounding. Our interest was compounding. So having that experience with selling houses in volume like that and then carrying back notes like a bank that's what expanded my mind into understanding how to create massive amounts of cash flow and that's traditionally how you do it you borrow capital you'll leverage it against a property and then you receive that cash flow. The reality is not too many people ever get to that point even when they've been in real estate 15 20 years especially if they're coming from the licensing side of the world unless they have some mentors and coaches that were great that helped them put money back in you know build assets outside of their license that would be great. But most people never experience that. So when I saw EXP I really understood like oh my gosh like I got it immediately. Not only could I you know sell houses I could get you know software and technology to plug into to sell more houses because the training in EXP is you know second to none which people don't realize is the support and the training in the cloud is 100 times more effective more efficient. I mean the words just go on and on and on that describe how well you know it is and how easy it is to plug into the cloud. It's... The support and training is you can access it from anywhere in the world any time. There are no restrictions on getting in your car driving down to the road like that is gone that is over we plug into the cloud. So. That's one of the biggest takeaways of you know. Jumping into that is the time right we're all trying to... Maximize our time. So you know not driving down to offices. I had a huge office on the eighth floor overlooking. Downtown Dallas and I hated it because I had to get my car. I had to drive down to the office. Much more efficient with the home based office than I'd take my laptops and I got my Wi-Fi. So when I travel. I'm connected so. That I was the one thing is offloading that big expense of an office so that's the biggest thing that the cloud provides. And you know. To grow business you've got to reduce your expenses and grow your cash flows. And grow your transactional cash flow too.

Kevin: So let me ask you a question regarding the business small as a business guy. You know so when you're traditionally a commission based business you know like you said that's one stream of income. When you look at the two big plays that EXP let's talk about the one being equity and the other being revenue share. The market really doesn't get this from the standpoint of the way startups work in Silicon Valley that's where I come from. You know so they look at it. I'm a real estate agent. I'm at XYZ brokerage I'm at independent it could be a big franchise. I go through my business I sell own a bunch of houses every year and either take listings and so on will get buyers at the end of the year or if I run my business well like you said I make a little bit of money.

Ian: Yeah.

Kevin: Now meanwhile there are people like Sherry Elliott who you know because she's in your marketplace that come on the podcast and go Hey by the way I'm buying a EXP stock for 20 % below on the commission plan. I've also been awarded it as an Icon for several years. You know I look at my account and I've got seven hundred thousand dollars in equity and if you'll look around a big franchise market center or office I would challenge you and you know this because you're in the marketplace. This is where the market doesn't get it right. There are not people running around with 150000 like I met an agent here in Austin or 700000 like Sherry Elliott where this is just occurring on automatic investment because the average agent just at the end of there like oh how many units did I sell.

Ian: Exactly. That's you know the biggest part of about the business model is. Having that that potential to be what we call the exponential earner right. How you can scale a business. And adding stock and equity to your balance sheet. You know it's like sitting down with a financial planner and saying hey we're going to take a little bit of your cash we're going to put it here again take a little bit more your cash. We're going to put it here and then over time we're going to let this grow. And that's what people don't understand is. EXP offer's.... It's almost like a 401k for real estate agents. So as they're closing transactions moving forward paying into the brokerage we're actually getting a return on the money we're paying in. Right. Especially with the stock program that we have you know there's actually you know there's six different ways to get stock. One is to buy over the counter. Another is when you close your first transaction with the EXP you'll get awarded I believe it's 50 shares right now that could be off because the numbers are changing so fast I can't keep track of them but you'll get awarded shares of stock when you close your first transaction and then when you cap once you sell you know two point six six or about three million depending on what commission structure you're on 2.5 or 3 % whenever you cap you'll get more shares of stock I believe around 100 shares right now and then here's the cool part is if you sell 20 houses after your cap which a lot of team leaders do and a lot of brokers do they do a lot of volume or if you're a commercial and you sell about half a million then you can qualify to become an Icon. And then there's a panel that vote you and once you get qualified. You can receive your entire cap backing company stock which is sixteen thousand dollars just awarded back to you in company stock and that is pretty darn amazing. Because think about that. All the other franchise models that are out there there are great companies. You know. Nothing has changed in real estate in the last hundred years. Now the Internet has finally caught up with the brick and mortar real estate model. And no longer are agents being you know paying every dime in you know into their brokerages and not seeing a return on it. So it's a completely different mindset from this day forward of technology and growth and all that it's just changing the game in you know the billion dollars in expenses that all the big companies have. What do you think they're going to be in five and 10 years. I mean the internet has completely changed everything. But but that's why it's so important to build a future. And we haven't even talked about the revenue share. I mean you know as you're closing transactions you can be accumulating stock just through production. So every transaction you close your laying stock you have to think about that is building assets on a balance sheet. So back the very first thing we first started talking about where is why is what attracted me was understanding that I could build and compound more and more line items of assets on my balance sheet like in a spreadsheet. When you see cash flow coming at you in a spreadsheet and you see a total at the bottom and that total gets bigger and bigger and bigger and bigger and bigger by adding more line items of assets to your balance sheet. When I saw the revenue share model my mind was blown. And I've been in the company two years in what I've seen happen in the last two years. I mean I just stopped telling people the numbers because they're so big it just It's not relevant to them right. How does anyone relate to the kid that won the 450 million dollar Powerball in Florida. Like how is that relevant to me right. That's a massive amount of cash. It's like you know it's just one of those things. What do you think about that.

Kevin: It's exactly what people miss. I talked to somebody last weekend. She's in Southern California and I'm glad you brought up the Icon program because as I started to ask her questions I could see that because she comes from a big franchise system that she was confused by the noise and information and other words they're trying to basically make it not clear that you're getting an equity award if you qualify for the Icon program of 16000 and that that's highly highly difficult to actually obtain that. Well as you mentioned either based on GCI or 20 transactions above capping.

Ian: That's right.

Kevin: There are very clear terms on how you qualify for this. So in her case she's got a big presence right. So I asked her some questions and just to clarify for our listeners in her case I said well how many referral fees on top of capping right she does about four or five million dollars a year. So she easily qualifies based on capping and she's in a high priced market in Southern California. I said well how many referrals did you do. She said I did I think somewhere around eight or nine referral fees that I got paid back to me last year. I said do you do any leases you're in a pretty high price market you've got to have people that are looking to lease houses and she goes I did it at least 10 of those on top of my real estate transactions. I said well just the referral fees and the leases are 18 transactions. How many did you do above. Approximately three million in volume. She goes well I have like another six transactions on top of that based on her pricing. I'm like OK well in our model you would be an Icon.

Ian: That's right.

Kevin: She's like I have no idea. I'm like yeah that's exactly how this program works. And assuming that you want to participate you're going to get all of your money back after you basically qualify based on transactions and you know the other structure and then for anybody listening to this you can certainly reach out we'll have some more information about the Icon program in this and other episodes. But don't let the marketplace confuse you. This is a real program. We can refer you to plenty of icons within EXP to talk to them about qualifying. Some of them have qualified for more than one year. In other words this isn't some promo special like you'd have at the car dealer where they're doing it once right. We have icons that have been here for more than two years that have qualified. Every year their hair. So the whole purpose of this podcast and I'm glad you brought this up is to have people understand because as a business owner at most brokerages there is no way to qualify to get your company dollar back. Right they just don't offer programs like that specially around equity which is an appreciating asset in most entities like this. So you absolutely are in a position to create value. I mentioned two numbers and now I want to tie this down. There is a agent I met at one of the meet greets right one of the EXP explained meetings and when this came up about Sherry Elliott in the conversation she said well I don't have a big mega team right. I'm a Capper. I do business and I've been investing in EXP stock through the program that Ian talked about where you can divert 5 % of your commissions. She said I have a hundred and fifty five thousand dollars in less than two years in my equity account. I would challenge any listener here if you're in a franchise or even an independent brokerage. Go look at your equity account and go ahead and send me a message if you have a hundred and fifty five thousand of your company's stock in there. And I think you and I know the answer is not unless you're buying at the market and you happen to work for a company that's traded right there's companies like Real Ajee or Remax or others out there that you could buy stock but you're not buying it for 20 % below market.

Ian: Now you've got to buy it at today's value which it's been going down.

Kevin: Let's transition a little bit to revenue share I'm going to give you my perspective and then I want to hear yours as a real estate investor so Gene-Frederic and I come out of the team a role or the regional owner role if you will at a big franchise system Keller Williams in particular but they all work the same way right. So one of the big things that were trying to basically make sure that agents understand is in a franchise system and if you are lucky enough to be around Keller Williams in the early days and this would be in the 90s right Gene-Frederic and Susan joined in the early 90s. They along with others had the opportunity to invest and buy regions right Gene-Frederic in particular with a couple of partners own Northern California Hawaii.

Ian: I actually hung my license at DPR and live right down the street from where they used to live in Plano Texas.

Kevin: That's awesome. And so for anybody looking at this the way regional owners are paid in franchise system and I'll speak specifically for Keller Williams is the royalties are taken off the top and they are paid half to the regional owners and have to the regional operating company in Austin. Right. So half and half. So one of the interesting variants of information out there in the marketplace is taking money off the top. It's not sustainable. Well if Remax does it if Keller does it. If all of the real Ajee franchises do this and if they have a regional operating partners or owners they're all paid this way then I challenge anybody that has been told that to go back and ask the person that told you this is this not how our franchise system the regional owners get paid. And the answer I'll just give you the answer is yes. So don't let anybody tell you that paying money off the top out of the revenue stream is not sustainable. This is exactly what EXP is doing. They don't have regional owners. From the standpoint of anybody buying in and owning Northern California Hawaii like Gene and Susan did with their partners. You are paid as a regional owner any EXP so to speak and I'm using that term broadly and loosely but it's the same concept off the top. Based on agents that are attracted to the company they become like your regional owner group. So with that as a precursor so people understand the concept here. This is not any different than what the franchise are doing. Ian what's your perspective on this as a business opportunity.

Ian: So the way I see it and then you can correct me if I'm wrong that you know this is a big referral type of based payment right. Everyone understands. Getting a referral you mentioned the referral a moment ago. I have someone in California. I have a lead in California. I'm in Texas. I contacted agent say hey I have a great lead for you. They're jumping up and down because it's a five million dollar acquisition. So they think I've hung the moon. And I come and I go back to that same age and I say Hey. Here's the business model. That I'm operating around the entire country if you're interested in it and you're attracted to it and you like it. I could sponsor you into this model and then I could show you how to expand that. Across the entire United States as well. So now I sponsor that age in California. Now every time they close the transaction I'm going to get paid a referral fee. How cool is that. Right. And then every time they attract somebody. Into the company underneath them they could be in Seattle they could be and. They could be in. WASHINGTON They could be in Florida. They could be down in Alabama taxes Arizona. Every time those agents close transactions not only is that agent that I sponsored in California are going to make a referral now I'm going to make a referral fee off of another 20 agents. And wow the crazy thing about this model is every single person is on the same plan and they all want to expand their business so now I get organic compound and kind of like compound interest. So I'm getting a compound effect on my revenue share because now I've gone from two agents to 4 agents to eight agents to 12 to 24. I've expanded my revenue share business into 14 states and Canada and I just hit 84 agents and almost 30 of them hit my team in the last 60 days. So I'm now getting the organic compound effect of the duplication of what makes this lucrative revenue sharing model so amazing.

Kevin: I've interviewed several independent brokers because their business owners right? They get blown away with is all of a sudden like Mitch Ryback and Florida they wake up and they're in 32 states in two provinces in Canada and they're adding more people per month than they had in their brokerage when they converted to EXP. Now you started from scratch right. You didn't convert a brokerage but for any agent listening here it doesn't matter if you're a single solo or and an agent that operates by themselves. You're a team and you're the rainmaker. You have an opportunity just to have when people ask you and I'm sure this happens right. And they like Tell me about the EXP. Why are you with EXP. You know somebody is going to listen to this podcast or other episodes and get it right. You're going to be able to have people have an understanding of the reality of EXP and to tie this down. From the standpoint of my comment earlier in the down markets right there is a several franchise systems including a very large one that operates on profit share. The regional owners and I'll speak to Gene-Frederic and his partners in Northern California. We're making a enormous amount of money in that 0 8 0 9 downturn. Most of the market centers we're not profitable for obvious reasons right. People's production were down however... because it's paid off the top the regional owners were making money like they were printing money and they felt guilty frankly about it. If you ever hear Gene interviewed about it he talks about the fact that they felt fairly guilty about the fact that if you're out there and you're thinking that it's all about profit share that's your reality check. We are going to go through another business cycle correction and you're going to see that when something is paid off the bottom at a profit. There's nothing wrong with that. It works. I'm invested removed partner. I was at Kellems for more than three years so to speak. And so I'm vested. I get paid profit share every month. So does Gene-Frederic. So do plenty of people. Now the difference is we're now comparing revenue share the profit share and it's a completely different model revenue share. Just to make it really easy is paid off the top like original owner. Like. I described earlier.

Ian: And it's 100 % transparent.

Kevin: It's very predictable. In other words..

Ian: You know exactly how much it is you can calculate it on your own.

Kevin: And you can build a business around it in other words you've got to look at it like Ian talked about if you've got 80 people you've got 100 people if you've got like Pat Hays you have 800 people. You can predict very accurately. But here's what I expect at a minimum I'm going to make. And usually the numbers end up higher than what people are estimating. So let me ask you this before we wrap up today if somebody is listening to this and they want to do some due diligence obviously they can listen to this or any of the other episodes they can click on the link and watch that seven minute intro video that's in the show notes. What would you advise them to do as far as due diligence to really understand what the EXP is about.

Ian: I would just refer you to some Web sites like you can really learn about the company. Number one is we're a publicly traded company right. That's one of the big game changers about this and why Glenn Sanford created this because he wanted everyone that was contributing to the growth of the company to be an owner and to be rewarded with it. So EXP world Holdings Inc. Is the site that you can do your due diligence and you can see our balance sheet. You can see everything about the company we're very very transparent. That's number one and that's the myth that everybody that's listening maybe for the first time or have heard something negative from someone else about the company like just forget all that. Do your due diligence were a publicly traded company EXPworldholdings.com The next thing that I would say is maybe we could take him over to the cloud side so they can see the training schedule they can see the agent handbook at EXPCloud.com. That's what I like to refer people to you know if you scroll down on that site you can see the agent handbook and you can read this and you can see exactly what the financial model is. And you can read through it. There it is it's right there in PDF form you can download it you can read it all the contact information for everybody in the company not everybody as far as the agent count goes. But now it's got Vicki in there it's got Jason Guessing in there. It's got you know Glenn its got their e-mail addresses in there. Everybody in this company is 100 % transparent. That's the great thing that I love about it so EXPCloud.com that you can see the agent handbook there.

Kevin: Excellent.. which are the two suggestions I would give. I also would like to state this and I know that we're going to get your contact information before we wrap up. And when you're introduced to EXP the person that introduces you to EXP can get you in touch with Ian or anybody else or any of the people you interviewed on this podcast ask for references if that's what you need as far as your due diligence. There may be somebody that's from the same franchise you are with that you can chat with maybe you've never met them maybe you admire them and you respect them completely. That is the culture. As owners of this business that's also not apparent from the outside. In other words he and I'm sure you've had this happen we're all of a sudden you have somebody that needs to chat with somebody that's in another part of the country you reach out and say Hey John this person is from the same franchise that you were with. They want to talk with you. The answer I found 100 % is yes sent them my way and I'll be happy. Yeah. And it's not that clear from the outside. And so now with that even if somebody listens to this and they want to chat with you a little bit more directly what's the best way to reach you.

Ian: I mean best way to reach me is by text at 214 2131 737 and I'm in the Dallas market. This is my backyard and I've had a lot of fun. I still do tons of fix and flips I actually have some pretty huge renovations that I document put on Facebook and LinkedIn and stuff like that and I invite people to come out and check them out when I'm done.

Kevin: Fantastic. Appreciate you coming on the show.

Ian: Thanks buddy. Thank you.

Joining us in today’s episode is Hank Avink. Hank runs the National Coaching League and was one of the top coaches at Keller Williams. Hank has come a long way in the real estate industry in 2008 with success as a buyer”s agent and ran a mega team before jumping back in to sales, coaching and eventually EXP

Hank is known for helping agents with productivity and growing their businesses and gives us his perspective on the EXP value proposition, explains why he believes EXP is a win, touches on how EXP has changed his life and his family as well as the lives of other agents.

Learn More about eXp Realty - Click here to watch a quick 7 Minute Intro Video.

Remember our disclaimer: The materials and content discussed within this podcast are the opinions of Kevin Cottrell and/or the guests interviewed.  This information is intended as general information only for listeners of the podcast. Listeners should conduct their own due diligence and research before making any business decisions. This podcast is produced completely independently of eXp Realty and is not endorsed, funded or otherwise supported by eXp Realty directly or indirectly.  

In this episode

• New opportunities in EXP compared to other companies
• EXP’s solid foundation, growth and expansion within the past years
• Importance on understanding the EXP model
• Revenue opportunities and differences with franchise companies
• How and why other companies are trying to keep talent away from EXP
• What is the real risk when if comes to EXP
• Help and culture in and about EXP
• Due diligence assistance.
• Misinformation on EXP out there.

Want to Learn More about eXp Realty?

If you are interested in learning more about eXp, reach out to the person who introduced you to eXp or contact Hank to inquire or ask questions.

Contact Hank Avink on facebook www.facebook.com/soldbyhank

Noteworthy

"Whatever risk it is you are thinking about.. I think the bigger risk is not jumping on board". Hank Avink

Joining us today is mega agent Tierny Jordan from Dallas Fort Worth. Tierny has a had a very successful past in the real estate industry being the No 2 team in the Keller Williams market place. 

Tierny talks to us about her team, her important decision on moving to EXP despite being a very successful agent with Keller Williams and what has happened since she joined EXP. 

Learn More about eXp Realty - Click here to watch a quick 7 Minute Intro Video.

Remember our disclaimer: The materials and content discussed within this podcast are the opinions of Kevin Cottrell and/or the guests interviewed.  This information is intended as general information only for listeners of the podcast. Listeners should conduct their own due diligence and research before making any business decisions. This podcast is produced completely independently of eXp Realty and is not endorsed, funded or otherwise supported by eXp Realty directly or indirectly.  

In this episode

• Tierny's determining factors to joinging EXP
• Why Terny believes EXP is a game changer
• EXP's culture and mindset between members and collaborations opportunities
• EXP's culture standpoint - team work
• Tierny's du diligence ideas and tips
• EXP is not only for mega mega agents
• Personal business and team growth within EXP

Want to Learn More about eXp Realty?

If you are interested in learning more about eXp, reach out to the person who introduced you to eXp or contact Tierny to inquire or ask questions.

Contact Tierny Jordan by phone/text: 469 446 8971

Noteworthty

"you can have ownership in a company that is going to be the number one real estate company in the world" Tierny J

"So I would just encourage everybody to really sit down and understand the opportunity don't go off of what necessarily other people are saying because there's huge value here and I'm excited to help anybody and answer any questions that you guys might have". Tierny J

PODCAST TRANSCRIPTION

KEVIN: Welcome to the show Tierny.

TIERNY: Thanks so much. Just to be here.

KEVIN: Good. I'm looking forward to catching up with you. Why don't you before we start a little bit on your decision to move to EXP tell listeners some of your real estate background because you've got a fairly large business you run up in the Dallas Worth area.

TIERNY: Yes. So I've actually been licensed since 2006 and I did a little bit of flipping. Before that I was an investor. Up until then and got my license in 2006 got my broker's license in 2008 I had my own brokerage before I went to KW about four years ago. And then I went to KW for like I said four years and then excited about the opportunity to recently switch over to EXP.

KEVIN: Awesome. And so I know you said you did some flipping and had your own brokerage Keller Williams you had a fairly large.... I see you're very visible in Dallas Fort Worth. What's the size of your team.

TIERNY: So I have 15 agents right now. So we've grown significantly. Last year we had about four. And just with the opportunities that we've had and really changing over to EXP we've grown significantly over the last month or so.

KEVIN: Oh fantastic. And even with the four agents let's talk just a little bit about your business because I know the audience will be listening to this you know could be in almost any franchise or brokerage but a lot of them will be in exactly your position. They have teams. So what kind of business do you do from a volume or unit standpoint.

TIERNY: So we did a little bit over 200 transactions last year with four people and a little bit over 40 million in vilume

KEVIN: OK big business if you will. And I know for most people I had a fairly large team and did about that volume in St. Louis and I know that when I was a lead on a team the thought of changing brokers and moving around and you know with all that number of transactions and listings is a big undertaking. What made you decide to even take a look at other options.

TIERNY: I think the biggest thing was the ability to be in partnership with people like Brent Gove. Adam Bailey, Jeff Willams people that run really big businesses and being connected with them through the revenue share piece allows us to collaborate and help each other's businesses. That was the biggest determining factor for me.

KEVIN: So if you talk about collaboration for someone listening if they've gone through some of the other episodes one of the things that Tierny is talking about that has been echoed on other interviews is this really truly agent focused business model and I want to have you give us your perspective on it I mean in other words everyone whether they are in the same revenue share group or not is all focused in the same direction. I know that I've done this and I'm sure you have as well where somebody either from our former brokerage or elsewhere has questions about the EXP and they'll reach out everybody are shareholders and the EXP is all pointed the same direction and we're really agent owners and it's something that I want to get your perspective on this. It's not really visible from the outside and I think people appreciate it until you get inside and the collaboration is pretty incredible isn't it.

TIERNY: Absolutely. It's amazing it's something that can't even compare and I've had my own brokerage I've been you know with like a KW Where you have people in the office and the support and the collaboration that I'm seeing in a virtual world. It's awesome.

KEVIN: For anybody listening to this. You know I come from the same brokerage background that Tierny did. I was a team winner and I also had a team at Keller Willimas and it's an awesome company. I mean they do a great job with mastermind's and mega camp and all these other events. The difference that I saw after being around EXP is it happens every day. In other words there's a very active proactive collaboration. There's a lot of sharing of information. So instead of it being a couple times per year when you run into people in person at an event the cloud based system allows that collaboration to happen regularly. I know that for example you know you still have the person things I know Brent Gove was in Dallas last week at the end of the week for a mastermind session locally there. I don't know whether you were at that or not but there's a lot of face to face as well. So you know for anybody listening it's not just cloud based I mean we certainly have a couple events per year but in addition to that there are groups like Tierny referenced and Brent Gove is driving a lot of those Gene Frederic is as well where we're getting the best of both worlds and that cycle of time between the masterminding is much more frequent than it is if you have to wait for one or three mastermind sessions per year or somebody listening I got to believe that this was a big factor for you too. In other words you get to work with these high producers and others and this doesn't just apply to somebody that is your basis that you're doing 200 transactions per year. We have a lot of cappers and megas in the making that are also plugging into the system as well and I'm sure you're seeing that in Dallas.

TIERNY: Yeah absolutely. We have one of the first agents that signed up on to be part of the you know mind down line with somebody who was on my team previously. KW And he left to build his own team and it kind of cut off because he wasn't connected to me anymore. But at EXP you can still build your own thing and share your resources and build together. So there is definitely local support there. Face to Face. I'm excited.

KEVIN: I'm glad you brought that up because for rainmakers if you will or Mega's that have teams I certainly had a big team with my regions and listing specialists that is in a franchise system because of the structure and how the teams are normally oriented something that's a challenge right. You get talent on your team and then they want to go off and build especially if they're very talented. And there is no play for them where there's a win win between the rainmaker and that's causes necessarily strife right. You describe somebody leaving but in the EXP world you saw Brent do this. I'm sure you're doing this with your team. Between the revenue share opportunities and the stock and equity. It's really a retention tool that also allows people to grow and it's not that same sort of win lose if somebody decides that they're at the point where they want to branch off and do their own thing because for somebody and your revenue sharing group that also has grown up and wants to do their own team. It's not a loss for you. Right. You're still going to benefit by helping them produce so for somebody in a franchise system. This is absolutely revolutionary for the industry. I mean this does not exist as I'm aware in any other franchise system. There is no effective way to create revenue sharing or no effective way that they're going to get rewarded in a fashion that when they start their own team if you will if that's what they're doing that somebody like Tierny can go I'm going to help you grow. I'm going to help you succeed because not only that like you described this well in the previous brokerage they left because they felt uncomfortable potentially. I don't know about this case. How much do you see that affecting the industry. Because I think that's going to be a disrupter and a game changer.

TIERNY: It is definitely a game changer. As a leader you want to help other people grow. But because like you said the challenges with the current models the way they're set up it will sets you up where you can't do that. So you have to face the inevitable as you're helping people grow you know they're going to want to do their own thing. And the model that you speed just it gives you a freedom to say hey I'm here to support you I want you to get bigger I want your you know your business to grow and I'm going to help you do that. And it's really just because the model supports that. So I do think it's going to be an industry changer and like I said it gives us freedom to continue to grow and continue to help in an industry that's being challenged not only internally you know but also with these other companies like open door. You know that offer certain things this is going to allow us to continue to provide value and not just be for the top 1 % of people who are making it impact you know on our clients. I think with the model the way it's set up it's going to allow more people to be able to provide value.

KEVIN: It really does. I mean if you look at you know EXP was.... in April it'll pass 10000 agents so I mean we already have that many in process with onboarding and we'll be north of 20000 at the end of the year and these are all people that are cappers or better. And there's a disproportion about in the industry of those that are moving because they see this value in it and it's something that I'm seeing. Also I'm going to ask you this because you were on brokerage before we're seeing brokers do this too. In other words in a traditional independent brokerage model I mean this is not the case if you own a franchise because you got to figure out what to do with your franchise. But if you're an independent broker you have sort of more control of your destiny. Gene and I were in a meeting with somebody this week and she's got 100 agents. She got it immediately. She's like oh I could take 50 of my agents. Put them under me and then I could ticket the rest of the 50 agents and put them under my key people in the brokerage that are my leaders and reward them and help them benefit. And then they in turn will learn about how to now mentor and get more agents in. That doesn't exist in other models. In other words the synergy of people immediately getting wow i when they when we can all benefit together unless you're your own company that has the equity in the stock or if you happen to work for a company and I'm not aware of them I mean we can talk about the one that is the diametric opposite which will be somebody like Redfin. Right. They have people down to the level of being an employee right. There's really no upside for them right there just essentially an employee and they get some sort of incentive compensation but they don't have the stock play they don't have the revenue share piece. And I believe this is going to be what disrupts the ability for them to effectively field a large number of agents as employees because now the option exists in other words people are coming out of franchise systems and saying OK what's next. What do I need to do. And with the a large number of Mega agents like yourself and even cappers that are leaving. I mean Daniel Baer is a perfect example. In his interview we talk about him leaving Keller Williams as well in San Diego. And since I interviewed him they've gone from somewhere in the neighborhood of 17 or 20 agents in San Diego to over a hundred in less than three weeks. You're seeing that in Dallas right you're coming in a little bit later. I don't know an agent number you were with your team coming over but you know when Gene Frederick started there were a handful of agents in Dallas and there's close to 900 now and it's what I call the EXP effect. It's like people are sitting in markets and they're like well there's only a handful of agents there's like St. Louis is a market I know. And I think there's 29 or 30 agents up there and you know Gene and I are running a big event next month and they'll have hundreds of agents when they look up a year from now. And it's the effect so if you're listening to this and you're in a market that was like San Diego just get ready because there are agents like Tierny in your market that when they come the rest of the market just gets disrupted and shifts. Don't you agree?

TIERNY: Yes absolutely.

KEVIN: When you look at somebody maybe listening to this and thinking about well you know I see this. I'm not sure what to do. I've got you know 40 listings active in pending. I've got a big business. What would you tell them as far as due diligence or taking a look at this. What would be the best way that you think they should evaluate this.

TIERNY: I would definitely look at the current structure and agreement that they have where they are concerning their listings so most brokerages are going to allow you to close anything that you have pending out under your current agreement and then move all of your active stuff over with you. But I would make sure to ask about that first before you know. So that isn't challenged in any way. And then once that's figured out... really just sit down and look at the opportunity that's here a way you can have ownership in a company that is going to be the number one real estate company in the world. And from my perspective I did a very conservative growth projection with and when I sat down with them in Mexico and we looked at just 5 % of the agents told 35 people about the company in four years will be close to like 344000 agents. So looking at the opportunity to have ownership in a company like that that has disruptive technology that allowed you to build your business and provide value to the people that you're surrounded with. When you look at that opportunity for what it is there's nothing else that's better for us. So making plans to transition your current business would be what I would do and what I did.

KEVIN: And absolutely and you know you talk with Gene Frederick and others and you know Don Lawyer did the same thing you both were in the same market center and I'm sure you were paying attention when he was doing his due diligence. The one thing about you EXP and I would say this for listeners and you know attorney you'll give her contact information before we wrap up today is regardless of who introduced you to you EXP the culture of this business is we all win when we get great top producing agents which is what's happening at the company. So if you listen to tourney's interview or somebody else's it doesn't matter who introduced you to EXP you're going to talk to anyone who's a peer or somebody you would respect as a reference both because maybe you have a similar business or you have a need to get a couple of references. I'm sure Tierny you talked to more than one person. It's an important part of the due diligence so don't think that just because you were introduced by John Smith or Susie that that's your reference point the culture of this business as we're all here to help you it doesn't matter if it's me. Doesn't matter if it's Gene Frederick or anybody else we're here to help you it doesn't matter how you were introduced to the company and that's part of the reason we're doing this podcast is for you to hear in people's own words why they came to you EXP. Are you getting reference calls from people like you maybe have never met or didn't even have initial conversations with.

TIERNY: I haven't yet. One thing I can say is absolutely correct. What you're saying.. I have been with KW for four years and of course Don Lawyer and myself werw at the same market center I never really interacted with him a whole bunch for the four years that I was at. KW When he saw that I came over to EXP I did get a text message from him welcoming me to the company. He said he was very excited to be with the EXP and I didn't come in under his downline so we're not connected that way but he did tell me that if there was anything that I needed I could reach out to him and if he could answer any questions for me and he welcomed me to the family so I thought that was like to me it was a culture shift just from what I experienced with KW And Don. And then what I experience with EXP and Don it was just a totally different culture. So I wanted to make mention of that.

KEVIN: And that's a great example. And you know the audience listening to this podcast many of them are at a franchise or they're independent and maybe they were introduced by an agent their market or somebody that on a transaction with. And your point is very very valid. Just realize that if you're doing your due diligence and there isn't and your franchise office another person that just recently left to go to EXP this is a whole nation wide operation. Right we're going to be through 10000 agents by the time this episode is live. There are going to be plenty of people for you to talk to and as Tierny said from a cultural standpoint we're all here on one team. We're all here and that's a very different thing where especially in franchises like the one that you and I came from. There are great companies but they're all islands right. You were in one market center a big one that does a ton of volume and Arlington but you guys didn't interact you didn't collaborate. You didn't mastermind. Whereas now everybody's pointed the same direction and willing to help aren't they.

TIERNY: Yeah.

KEVIN: If you look at the market going forward you talked about doing some projections and where the company's going to go you know when you look at the company growing who do you think the perfect fit is. In other words there's a lot of talk in the market. I want to address the sort of the nonsense and I'm going to hit the first part of it and then I'll let you talk about who you see joining in Dallas and you know in your downline etc.. Because there is a number of people out there are trying to talk about people are coming to EXP and leaving right and I'll hit the turnover rate right over the head. I mean we have about an 8 % turnover rate. It's very low for the industry. You know a big franchise system including the number one is running 36 %. So you don't get confused if you're having somebody in your franchise system tell you that everybody is leaving because that's not the case. We have great producing agents is that not what you're seeing as you're dealing with agents in Dallas that these are cappers so to speak and better aren't they.

TIERNY: Yes and I happened to be on the Finance Committee at KW which was like a close group by invitation only. And we got to look at the books and we got to see how many people left and came. So I agree with you like that rate is high. And I think part of it is because of the structure and I'm not just talking about KW as a whole but just nationally for brokerage's because the value of actually bringing people in and providing them with a network of core people that are going to help them and give them value to build their business not only just with the same wash rinse and repeat where you're doing the same thing over and over but providing an opportunity to have passive income providing an opportunity to have retirement through the stock. It's just an amazing platform and model. And I think with the way that it's set up it allows people to connect more and help build more. And I've only been with the company for a month. I've brought in close to 30 people. I haven't had anybody leave yet. I know the person who brought me in hasn't had a huge turnover at all. I don't think anybody's left him and he is close to like 90 people. So I think it's just the value. Like we're plugging and and we're helping each other build and we're looking at this as a long term business and partnership and helping each other grow and making sure that our company is stable that we have ownership and with the stock. So I think it's a different mindset. You know we're not just coming to get what we can out of it. We're coming together to build something bigger than we could do without each other.

KEVIN: Absolutely and I'm glad you brought that up because you know for many many agents they don't want to. Good bad or indifferent. Right. There's no judgment in this comment. Have a 200 transaction 40 million dollar business. So you know they're plugging away doing listings and buyers and they've got a good business right. They cap and they run a great business. The stock equity opportunities you know to be a shareholder and do stock and the revenue share opportunities are something that just don't exist. And it's a game changer for so many agents because you don't have to bring in 100 people to change your life from a residual income standpoint you don't have to do anything other than cap and then if you do the 20 transactions on top of a cap which is not 200 transactions in markets especially on higher priced markets you're going to have the opportunity to be an icon where essentially you're getting the cap back in equity. So it's become such a huge game changer for people who don't want to have giant teams and I'm only saying this because somebody could possibly be listening and saying well you know I don't want to have a 40 50 million business. I'm happy doing 5 million 10 million 12 million and I see so many of these people coming in and I was in a meeting recently here in Texas where an agent that's been with the EXP for two years said I have 155000 dollars in equity in my account in less than two years. I don't have a 30 million dollar business. I'm a solid double capper I do four and a half million dollars a year. And I want that. I want that to sink in for somebody listening that that is them because I would challenge you to take two years look at your PNL look at how you run your business and come up with a hundred and fifty thousand dollars in an equity account. In other words she's not doing anything other than what's offered and what she will qualify for in the business. And this is a game changer because for so many people this is their frustration right there. Good producer but they don't want to be a mega mega giant team which is fine. The majority of the marketplace is that right. And previously they just didn't have that opportunity. They didn't have the opportunity to say why did to create wealth. I need to figure out what my residual income stream is you know and the traditional stuff is in a lot of the franchises is start buying property right. Go invest and get that and then they have to figure out in order to fund that. How to do a much more production. Right now we're back to the same problem again. They don't want to have a giant production business and team if this is you. This is why you need to dig in and talk to people like Tierny because even though her business is a larger scale than yours or any of the other episodes that we've done or if you want to reach out to me or gene we can explain to you how somebody can work here at two years and how they accumulated 155000. You know there's an agent in Tierny's market that's been here a little over two years and she's got 700000 equity and she's roughly at Tierny's volume. You know Sherry Elliott is her name and you can listen to her episode. That is a huge game changer. You know and if you're in a franchise system that does profit sharing there's enough people now that can point to. They had attracted agents at EXP and they had previously had agents they got recruited into the franchise system. They know the difference right in the revenue share off the top. In other words getting paid like we talk about on the podcast as a regional owner is a 10x or more difference. In other words you know what your number is. For profit sharing and you're listening to this. Multiply it by ten or more. If you're planning on attracting people like turny talked about being here a month and how many people have come over if that's you right you're listening to this and maybe you are active in your marketplace and you've got people in your profit share go take your last profit your statement and multiply it by 10. If you're going to be purposeful income over EXP that's a game changer from a residual income standpoint because unlike the complex formula and the unknowns and profit sharing revenue share is really easy is an attorney. It's a formula that you could put on a napkin and I could show somebody over coffee.

TIERNY: It's very the atoms that KW for four years and never really understood the proper share P and a lot of people didn't know how to explain it but I definitely understand the revenue share piece it's very simple and you can just explain it and write it down on a piece of paper.

KEVIN: Absolutely. So before we drop off today any final thoughts things that I didn't ask you that you think would be good if somebody is considering EXP to consider?

TIERNY: I think it's just an exciting opportunity. I would say take the time to really sit down and understand what our company is offering because when you look at it and you see the true value in our industry there's nothing else like it and we're really at a place where it's still the beginning. You can still get in to this opportunity and connect with what's right for you what's right for your business. And it doesn't matter. The majority of the people the 30 people that I brought in didn't have big teams. Their single agents who were cappers on a capper in our market or an icon in our market does about 28 transactions a year. So that's a little bit over like two transactions a month. It doesn't take a whole bunch to utilize the money that you're already investing at another franchise and get that back in stock ownership in the company and start building something bigger than just the standard business. So I would just encourage everybody to really sit down and understand the opportunity don't go off of what necessarily other people are saying because there's huge value here and I'm excited to help anybody and answer any questions that you guys might have.

KEVIN: Fantastic Tierny how would they reach you what's the best way to contact you.

TIERNY: So my cell phone number is 469 446 8971. And text is always the best way to contact me.

KEVIN: Fantastic. Thanks for coming on the show.

TIERNY: I appreciate you.

Daniel Beer Interview

Joining us today is Daniel Beer. Daniel is the CEO of Daniel Beer Home Selling Team in San Diego California and has been in real estate since 2005. In 2017 his highly leveraged team was the top producing team in Southern California.

Daniel shares his story about his business with us, talks about his decision to move his already successful business to EXP Realty and explains why he believes EXP is the most important opportunity that has ever existed in the Real Estate industry. 

Learn More about eXp Realty - Click here to watch a quick 7 Minute Intro Video.

Remember our disclaimer: The materials and content discussed within this podcast are the opinions of Kevin Cottrell and/or the guests interviewed.  This information is intended as general information only for listeners of the podcast. Listeners should conduct their own due diligence and research before making any business decisions. This podcast is produced completely independently of eXp Realty and is not endorsed, funded or otherwise supported by eXp Realty directly or indirectly.  

In this episode

• Why EXP is the most important opportunity in Real Estate 
• How easy it is to move to EXP
• Many mega agents are making the move to EXP
• Creating revenue and passive income through EXP
• EXP is currently the fastest growing company in Real Estate
• The benefits of moving to EXP in these early stages
• EXP is like buying in to a business without paying for it

Want to Learn More about eXp Realty?

If you are interested in learning more about eXp, reach out to the person who introduced you to eXp or contact Sean to inquire or ask questions.

Contact Daniel via his website www.fastforwardwebinar.com

Noterworthy

"It's killing the traditional model and this is the highest value proposition available today to people selling houses."

"Me being at EXP has nothing to do with wanting to move away from Keller Williams vs it actually just has to do with me wanting to move towards something that I see as being a phenomenal opportunity" 

Daniel Beer

PODCAST TRANSCRIPTION KEVIN: Welcome to the show Daniel.

DANIEL: Thanks Man. It's good to be here.

KEVIN: Looking forward to the conversation.. The market and the industry are a buzz when you made the move recently but before we jump into all that why don't you give a little bit for those that maybe are listening to this that don't know you personally and know what you do as far as your real estate practice a little bit of your background.

DANIEL: Sure. So having been real estate full time since 2005 and this past year 2017, my team was the number one producing team for all of Keller Williams and the Southern California region IGCI. And number two buy units. So we closed 222 houses for 164 million dollars in sales volume. We have what I call a highly leveraged fully built out team everything from operations, listing management, transaction management through company listing, showing agents inside sales and of course our sales agents or sales executives. It's been an incredible journey. And I went through the same Genesis that I think a lot of agents go through. I like most other stumbled into the industry. In 2005 I was 23 years old and my dad was about to sell a house and of course I got licensed because it's unfortunately are too easy to get licensed. And I started selling homes basically just doing friends and family business and that was cool. Up until the market crash.. The market crash happens we all know how devastating that was. All the friends and family business goes away. And I'm left to either make a decision to leave the industry or learn how to build a true business that can predictably systematically create leads in income for my family. So fast forward there were a lot of learning that you know that I went through is some winds some fails and here we are today having a ton of fun and now at EXP man I can't even begin to tell you how energising this has all been. I haven't had as much fun in a long time.

KEVIN: And that's great. I like Gene Frederick we're team leaders and in leadership at Keller Williams I was with Aaron Lancaster and Andy Allen in the early 2000s and they had a team and we ran and we were doing about 600 transactions a year and that was the genesis for the whole MREA and so we thought we were having a lot of fun back then but it's nothing like this. So tell me about the process. Obviously well before you decided to move you started to hear about the EXP and you start seeing agents moving. What was the genesis for you making the decision to take a major big business like yours and make a change.

DANIEL: Yeah it was an interesting journey. And so for me my personal story goes back to being in Gary Keller's mastermind of killer Williams so I have to say by the way it was a wonderful company. I was very very happy there and me being he has nothing to do with wanting to move away from kW vs it actually just has to do with me wanting to move towards something that I see as being a phenomenal opportunity. So anyway I was at Keller Williams. I was part of Gary Keller's mastermind. And you go back over a year ago. All of a sudden in our group we had a Facebook group. We suddenly started having people asking you know and making comments asking questions about EXP. And you know questions like "EXP just did this in my market" or "what are you guys doing about EXP saying this" or taking this person or "oh my god you hear we lost that one". And I found that to be really interesting because first of all I don't know who the EXP was. I had never heard of it. And of course at the time it was like a 2000 person company. And so I started to asking myself this is where do you think it's curious that the most elite group in the biggest company in the world or at least in North America is talking about some 2000 person company. But I have never heard of. So that's over a year ago and you know going back to say mid 2016. And the interesting thing about that too is that.. that group never talked about Berkshire Hathaway and they never talked about Remax they never talked about Coldwell Banker. They never talked about anybody. Yet they were talking about some little 2000 person company. So that's kind of interesting right. That was my first introduction to it all. I have another group that's a very very high powered mastermind. Everyone's number one or two in their market. There's about 35 or so people in it and that group all of a sudden three of them went to EXP. I'm talking about big heavy hitters. And so I learned the model and Kevin I think this might resonate with you. You know there's an evolution in this whole thing just when you hear about it, there is when you learn the model. So you go back over about a year ago. I understood the model okay call their stock. There's revenue share. There's the fact that you keep selling houses right? We're not being asked to become essential oil sales or anything we're just simply selling houses as stock revenue share. Cool. I got it. That was a year ago. But then there's when you finally kind of see the entire picture come together Kevin and you see the real power of the opportunity to step into the fastest growing brokerage in the country in the very beginning of the first inning. And when you see real productive agents start moving into the business. For me that was Curtis Johnson. Johnson was another guy that I was friends with he's a guy I followed actually been stocking years back before we knew each other. I was trying to learn from him. Now all of a sudden he goes yes. There's just that moment when you say wait a second what is going on. Too many incredible smart strategic business people that I respect are making the same move to the same group that Gary Keller's private mastermind's talking about. That's interesting. And so... you know I'll take a pause here Kevin in case anything to throw in there but when you start seeing that and then start seeing how truly financially incentivize the people at EXP are to help each other and essentially make it true the thing that we all tend to say in all brokerages that we are all for each other we want to share. We want to do this. Not in my market right or not too much. Not my true secret stuff. Well I started finally seeing a model that really incentivize people to open up completely and help one another because everybody financially benefits and the power of that and being able to go from one bucket of income to three right? just simply selling houses getting checks. It's also owning your brokerage and having passive revenue became so compelling that I made the move and I have been having a ton of fun since.

KEVIN: Couple of interesting tidbits that you'll know who I'm talking about I'm not going to mention by name because I've got a good friend and he's in St. Louis and he's got a mega mega team like yours Daniel. I mean he was my mastermind in St. Louis when he was just getting started and I had my team and we were the number three team in the market. So I was talking to him about EXP and he said I get it. I know the model. Don't worry about it. Let me tell you this I've been accumulating stock and EXPI for over thirty four months. I've got thirty or forty thousand shares. I can't tell you the number of people. And he's with an NRT company. So guys like that are buying stock and the EXPI. There's a mortgage lender in central Texas. I think he's got close to 50000 shares. The industry is betting that this is the new model. And so some of the stuff that you know I just wanna throw in here because this predates your entry into KW and I agree with you it's a great company for people like Gene Frederick and I and others. We were there in 1999 when Keller Williams was a small little company and I'm going to tie down why you said it's kind of interesting to you to give you some perspective. Gary Keller and the team and the regional directors are all getting ready to launch a ton of market centers. They've got somewhere around 50 700 agents in 1999 and they have to go through the process of fining agents finding investors they have to go the 14 to 18 month process that other people have talked with me about on other episodes mentioned this. It's a slow process right. I could have met you in San Diego. Got you all excited about a market center and then 18 months later we'll be all through the process and opened. So now Brent Gove and I always give the story because it's most enlightening when you listen to his interview you'll hear him say this. He was in San Antonio for the EXP meeting met with Glenn met with Gene met with the team brought some people that were his best Devil's Advocates said poke holes in this model. Tell me why I shouldn't do this. Ten days later he is up and operating as the EXP and basically being powered by the brokerage. So the reason that people like you are seeing these antidotal people dropping in and out and it gets mentioned 12 times at fam reunion is this is Netflix versus Blockbuster. If you're sitting in the private room with Gary Keller's insiders not the people in the company but the guy that he's paid millions of dollars in consulting fees to they're going to tell him this is Netflix vs. blockbuster. You have all this bricks and mortar. You have all these franchise locations. It's a great company but so is Blockbuster and they couldn't pivot they didn't pivot.

DANIEL: It becomes very difficult when you wrap up in hundreds and hundreds of franchise agreements.

KEVIN: Absolutely. The interesting part about that I wanted to tie that down is there were fifty seven fifty eight hundred agents now eight years later they were at 78000 agents right. They executed extremely well. There were a bunch of us in leadership and I ran some market centers in South Florida. Gene was regional director as well as a team leader and phenomenal model lots of execution. The thing is and this is where Gary and the others realize this if it takes some 14 18 months to open a markets and with 100 agents EXP adding agents at 250 plus per week and you don't need a slide ruler to do the calculus to figure out if we're disproportionately high on producers like you or in the parlance of the franchise system cappers or better they can figure out what the picture looks like in 3 years when the company has 100000 agents. And I want to do two more data points you may not even know this in a one week period somewhere around Baltimore one of the market centers number one through five at one market center in one week they all basically said we're going EXP. So that is how you end up with a small little company being mentioned 12 times at fam reunion. The momentum is crazy.

DANIEL: It is an incredible thing and here's how you know I truly believe this will be the first 200000 person company in North America. And the reason why and that it will also get there much faster than what is currently the biggest company is simply because let's imagine that you're an agent somewhere in remote Montana. Okay. And you want to be at Keller Williams and let's rewind right years back is I don't know where the market centers are but let's imagine it's the year 2000. And you want to be a Keller Williams And you're in remote Montana. Well they had to award the franchise fine the space build up the space they need to get X amount of what they called capping agents to be able to finally launch. And then eventually you can join that. That's a long process. If an investor chooses to build a market center in your area. You know that's that could be a one or two year process there. And again if they choose to build a market center in your area well you could be on a remote mountain top somewhere in Vermont right now without an agent within 500 miles of you and you could be speed this afternoon. And that is why this company without the restrictions of brick and mortar and traditional franchising territories and regions. When you remove all that you allow scale to happen at an exponential rate versus what companies not just in real estate but in any industry can traditionally experience. And so when you take all that in when you hear a guy like me that know I've had the privilege of being connected to some of the most incredible producers in the country I have a unique point in that I know what those conversations are. I know there's market centers being quickly unwinded so that people can move to EXP I know that headline making names across the country across every major city are all in motion right now. Right now is an opportunity that I saw to essentially step into Keller Williams in 1990 and in the very beginning the first inning. It it's been around for nine years by the way. But I would still say this is the first inning of a productive agents that will quickly and exponentially grow the awareness and the conversation which is already the loudest conversation in our industry is only being magnified each time one of these large producers in a different region nor a different city moves to EXP and the real aha is that if you can do that and you can have world class uplined support from big influential names and people and you're the first productive agent or among the first if you're in this first wave the first inning of agents that are really selling house it's moving into it. Yes. Well everyone wants to know about it. The conversations will naturally flow to you. What I saw Kevin is an opportunity to essentially own my region. It's like buying a Williams region without ever having to pay for it. And that opportunity was when I could not even I had not pass up. And this happened just like that right?. This is the loudest conversation in our industry.

KEVIN: Absolutely. I mean I want to come back to what you just said because for people we've been talking a lot about wins it doesn't matter if you're at Remax or even if you're independent. The analogy of the fact that you can build a business where it's the equivalent of owning a region something that was out of reach for anybody in the franchise systems is the reality. And so if you're Daniel Beer and you're a major producer in your market and you have a couple of choices for additional income this is where I see the next phase of this momentum and rapid growth. You could go expansion right go into multiple markets and there's a lot of the franchise focus on that and certainly we're starting to see a lot of talk about this loud conversation from people looking at the EXP from an expansion standpoint and there's a lot of momentum there but it's that revenue share regional ownership if you will in the building a business around that that we have enough demonstrable examples whether you listen to the episode by Pat Hayes look into the Gene Frederick ston or even Sherry Elliott and Dallas. It's incredible now and I think the market with this loud conversation can no longer go. Well yeah. You know what they don't have anybody that has any real success because now regardless of how you've been introduced to this episode or any of the other episodes and as my guest ask whomever introduced you to EXP to go get you success stories. It doesn't matter if you want to talk to Daniel you want to talk to me Gene Frederick Pat Hays. We're all agent shareholders we're all here to help you. And again I want to get your perspective on this. Isn't that the craziest part of this culture that's not apparent from the outside. Anybody will help anybody because we're all age owners we're all either going to benefit through share or through our ACLI because the stronger the company can become the more our stock is worth in the most simple terms. Like I said the math finally makes sense. It's the first time it's been able to put the numbers and the altruistic or altruistic aspirations finally in alignment with the numbers and the math. It's a beautiful thing. And here's something I was listening to as I might say to myself OK that's helpful and great. So the 160 million dollars of real estate in the last 12 months. Sure. What about me. What I have seen over and over and already has set for us here locally in San Diego just within our first literally the beginning stages of us being at the company is if you're 5 million or 10 million or producer if you're an agent that's been operating with integrity showing up as a professional in your marketplace you are vastly underestimating your influence whether it be at a branch level or a zip code level a neighborhood. A town or county or city or state your region your underestimating your influence and keep something in mind. Again you're stepping into the loudest conversation only is being magnified by every big iconic agent keeps coming into the company which seems to now be happening on a weekly basis. So I'm stepping into the middle of that and your boots on the ground doing deals. Talking to agents talking to a hundred plus agents on a yearly basis. No one's asking you to go become a recruiter. In fact make sure you keep selling houses. Do what you do sell houses. All you needed really did was alter 10 percent of your awareness 10 percent of your script when speaking to an age. Something as simple as closing a deal out with somebody and just simply calling them hey is great doing that. You know what let's do another one soon. Let me know. Let me know if you listening coming up. You know I had the same conversation you're already having. And then just adding. And by the way you mentioned earlier during our transaction you know you'd asked me about EXP. We're actually having an event or there's this wedding or going on or blah blah blah. What I'm trying to say is that someone like me someone like Kevin and a lot of other folks across the country there's a lot of opportunities to it regardless of sponsorship there's a lot of people like us that have already created the system. Or you could just alter 10 percent of your awareness and introduce people into the system so that you can continue to do what you do and sell houses. You're going to go from what I call one bucket to three real estate sales but can we just sell a house and get a check. Transition to now having ownership. Because you actually get ownership simply for doing their jobs and having passive revenue here locally. Kevin like it points out an agent great agent just you know your bread and butter productive long time respected agent. She's not a YouTube star she's not on stage. She's just doing what she does in her local market place for some time. And she has five hundred ish dollars of profit sharing the last 12 months that her previous company her revenue share based on which she's already introduced. It's unnatural attraction and conversations coming to her is already on track for seven thousand dollars this year. And I think that's incredible. I think that's the most incredible thing because it makes seven thousand dollars in passive revenue in San Diego. You need to invest about a hundred and twenty thousand dollars cash to do it in real estate on a rental. So that's power.

KEVIN: There are tons of examples and you're going to see them on these podcasts episodes. I mean I always love to tell the story of Sherri Elliott. It's one of the other episodes she was age at number 14 in Dallas and they have over a hundred there now. So when you look at the growth of the company the other thing I want to point with that comment is even if Daniel's point you're in a market where there aren't 800 agents. Here's the deal if you're in a market like San Diego it's coming. Right. Less than two years ago Dallas had 14 agents they have 800. Austin's over 315. I'm just picking a couple of markets. Daniel have every confidence that you'll be at a huge number in the southern California San Diego market and it will be but here's the point nobody in real estate does a good job of saving like you can with an opportunity like EXP. I want to talk about her two numbers that she talks about publicly. One is the equity she's been hurt less than two years she participates and in the GCI program where she dedicates 5% right? And if you're at a franchise and you pay that royalty. Think of it as the same thing off the top she has. And when she told Gene this recently, even hundred thousand dollars in her stock account in EXP stock and less than two years. So I challenge anybody listen to this. If you're an independent you're in the franchise model and where you are you're never going to see something like that. We were telling the story and one of the lunch and learn actually explain meetings and one of the three agents from Austin was in there and she said well I don't know nearly as much business as Sherry does and this is your point. I probably do a tenth of what she does in production she said. Isn't it interesting that my stock portfolio in less than two years of the EXP stock is 155000. I've never seen that much money in a investment account my life. Those are why Daniel's point of you don't have to be 150 million dollar producer with a big team. You could be a capper in that parlance.

DANIEL: Well the story I told news about someone that's been in the company for three weeks its simply for this reason. And really this is the thing that people have to take with them. If you go and see who's making six figures profit share. Keller Williams which again a wonderful company that I love respected. Gary Keller will forever be one of my biggest influences if he goes to you. Who's collecting six fingers of profit share at Keller Williams what you're going to find is that it's not the superstar agents it's not the guys on YouTube on stage and being created around panels and it's not the celebrity agents that you whose names you know today it's actually the people whose names you don't know who were simply there early period. Now that doesn't mean they just showed up and didn't do it thing. And he EXP isn't that either. You can't just show up and not participate. It's not a get rich quick and just you just sign here you a million. No that's not what it is. But the people collecting six figures of profit share at KW And that's profit share revenue sharing exponentially more powerful only to talk about why in a moment. And a key reason why as we go deeper into it the number one reason why is top line revenue can't be manipulated. People collecting six figures of a profit share in this. You have to allow them to land. It's not a celebrity agent. It's not the people you saw on stage at the last conference convention etc. It's people that were there early. In my view is 1995 all over again being given the chance to enter. What's about to be the fastest growing company in the history of North American brokerage and I might be wrong right. I mean I've done an incredible job of being right more often than not in terms of my vision of where to take my business which is how we've got here. But I've also been wrong but was a guy like Curtis Johnson also rock the guy like Jay Kinder was a guy like Frank go wrong and Gene Frederick are all of these producers Kyle Wessell 200 million dollar producer was he also wrong are we all seeing the same thing and are we all wrong. Well I'm excited to find out. Here's the thing. The odds of all those people being very low and if we are we'll just go back to selling houses because that's what we're doing is we're selling houses. And so you obviously can hear the enthusiasm and buy my voice around what's going on here. It's just been on fun I keep coming back to that. You know what I'm talking about Kevin like me the amount of energy that you feel around all this. It's something I hadn't felt until...

KEVIN: Absolutely I would agree with that completely. Before we drop off today if somebody is listen to this and they want to reach out to you and talk more about it what's the best way to reach you.

DANIEL: Well two things you could do. One is my name is Daniel Beer. So just like the drink I'm easy to find. Go get me. Call me e-mail me it was jump on a call. The others go to fastforwardwebinar.com spell out the whole model. We spell out exactly why we've done what we've done not just my self on the way but some other mega producers that have made to jump as well. Independent brokerage's you know I'm giving you the KW because that's my history but independent brokerages are seeing that this becomes a platform where they still get to operate their brand. They're what they wanted to build their brokerage associates operated they just can get rid of this stuff it's not so unlike the broker stuff repurpose that time to building your passive revenue it and not have to take your eye off the ball at all as it relates to real estate sales. So you want more detail around it it is fastforwardwebinar.com and yeah it takes a whole webinars. The reason why is it's a completely different model. It's a model that I hadn't seen in my entire career. And it's just different. And when we've been looking for what's going to disrupt our marketplace. You know Kevin we always thought it was going to be someone that would create a button that would allow a buyer to purchase a home. That's actually not where the disruptions coming in disruptions coming in the brokerage space and how the agent is demanding value from their brokerage on a level that had never been previously demanded before it and that's happening more and more. It's killing the traditional model and this is the highest value proposition available today to people selling houses.

KEVIN: Absolutely I agree with you. Thank you so much for coming on the show.

DANIEL: You've got it!

Sean Purcell - Interview

In this episode joining us is Sean Purcell. Sean started in the real estate market back in 1987 when he was in college and has been in most aspects of the industry including home building, loans, residential real estate and moving on to becoming a coach and a productivity coach with Keller Williams.

Sean talks to us about his decision to leave the franchise system and becoming an owner of a fast growing company. He gives us his prospective on EXP from an agent stand point and an independent broker that made the decision to move to the agent centric model of EXP. 

Learn More about eXp Realty - Click here to watch a quick 7 Minute Intro Video.

Remember our disclaimer: The materials and content discussed within this podcast are the opinions of Kevin Cottrell and/or the guests interviewed.  This information is intended as general information only for listeners of the podcast. Listeners should conduct their own due diligence and research before making any business decisions. This podcast is produced completely independently of eXp Realty and is not endorsed, funded or otherwise supported by eXp Realty directly or indirectly.  

In this episode:

• How to become an owner of a company that is getting bigger
• EXP is agent owned and agent centric. 
• EXP brings phenomenal technology to the forefront for the agents to use.
• Income, wealth building opportunities and equity differences between the EXP and the franchise system.
• Advice and steps on due diligence.
• The power of EXP is most times not apparent from the outside. How to really get informed about EXP

Want to Learn More about eXp Realty?

If you are interested in learning more about eXp, reach out to the person who introduced you to eXp or contact Sean to inquire or ask questions. Contact Sean via email at [email protected] Contact Sean via phone at 619 993 9888.

Noteworthy

"Before EXP when you stopped showing homes you stopped making money. This is an actual retirement equity building company you could be a part of." Sean Purcel 

PODCAST TRANSCRIPTION

KEVIN: Welcome to the show Sean.

SEAN: Thanks Kevin it's great to be here.

KEVIN: While I'm looking forward to our conversation I've certainly have always watched you and your career in San Diego area and was excited to see you make the decision to come over DXP realty but before somebody who's listening maybe doesn't know your background hasn't heard of you before. Why don't you take a few minutes and give your real estate history. In other words your background in some of the work you've done right.

SEAN: Ok. For the people who have a hard time sleeping at night. I started in real estate out of college back in 1987 and I've been in pretty much every aspect other than Title. I've done the loans I've done home building, primarily I've done real estate residential. I'd say about five or six years ago I started coaching agents more than I was doing real estate itself. And about three and a half years ago joined Keller Williams and became what's called a productivity coach there and really starting up with the job of coaching agents that became my career. Until we left Keller Williams my wife and I was a team leader and started our own brokerage. We want to do things a little differently and we thought we're the only ones who had this idea about it should be about collaboration and it's about helping one another and having ownership in what you do and in the community. And along comes the EXP was a fantastic surprise.

KEVIN: Well it's excellent so you're a productivity coach. I was a team leader at Keller Williams Your wife was a team leader. You know one of the things the whole industry has always touted right? Everybody said it but I want to get your perspective on it now that you've been an independent broker which you and your wife launched in 2017 but when you look at an agent centric business this truly agent centric an agent owned this is different than what the franchises call an agent centric business isn't it.

SEAN: Absolutely. The matter of fact I think what EXP is doing is the second major disruption in the industry. This is just my theory but the agent centered model that really Gary Keller brought to the forefront. That disrupted the broker centric model to a large degree and changed Real Estate and I see EXP coming along and saying it's not just agents centric it's owners the agents should own the company. That's a massive disruption.

KEVIN: Well I would agree with you. You know for those of us... and I was with Keller Williams for a long time and had a career there Gene-Frederic was there for a long time. And so we spent a lot of time talking about the franchise model and you know kind of dissecting the moniker around agent centric business. Now you can say you're an agent centric national franchise or global franchise allow the agent to have their brand right the Kevin control team and that's what it says on my sign. But at the end of the day if a top down... you know the franchise or parent company and all of the things are driven from the top and none of the agents own anything in the business it's not really an agent centric business. You can call it what you want but when we were there we certainly espoused that. I'm sure your wife did as well and it was a moniker and a message that was well-received in the market. I agree with you it was highly disruptive right. We saw them open a tremendous amount of market centers and they're a great company. But I think that what's going to become clear and it's already clear is they're not really age centric right. People that just went to family reunion got to hear a three hour speech where Gary Keller told his vision of the world and what he's doing that wasn't based on Agent decisions. It's not an agent owned business and again it's a great company. There's nothing wrong with that but if you're under that flag and you buy into that just know you're not an agent centric business. Gary Keller and others are making decisions for you and you get to live under the decisions that they make right? He announced they are a technology company I think. Up till that point in family reunion the vast majority of the agents thought they were working for a real estate company. They also had a focus on consulting and coaching and training. Well they were told they're working for a technology company. The EXP realty is not confused. The founder of our company is not confused. We're a real estate company so I think the acceleration of the disruption is going to occur because many many many agents especially in that franchise system are going to realize that they don't want to run their real estate practice in a company that's confused about what they do and it is heading down the path of being a technology company and they want to do that the go work for Amazon right? That's a technology company. Or work for Google. With my real estate practice I know with yours, we didn't go seeking a technology company to hang our license with. We want a place that we can grow. Sean from your perspective you're a productivity coach. You look at sort of the next evolution you talked about it being the eruption right in the market. What was your thought as an independent broker right. Your wife was a team leader you were a productivity coach out there in the marketplace. You had a great launch of your independent brokerage. Walk me through what the decision was to say you know what maybe we need to make a change and become powered by the EXP as an independent broker.

SEAN: Well we had obviously heard of the EXP. This is how it happened so often the number of large teams here in our area moved over to it and that really made us take a hard look at people I respect who are doing a lot of business success are joining EXP. We need to look at it and the more we got into it it's satisfied at the surface two things we really wanted to do which was give our agents the best chance to do business and our industry is being squeezed by technology. If you're not using the best tools you're going to get the hot new EXP brings phenomenal technology to the forefront for the agents to use. So that's what opens in a door. But after that once we really started exploring the revenue share is a model that creates a new stream of income for agents that doesn't exist in any of the other large brokerages. And then the really important part of this the part that it takes time sometimes to really get an agent to see it but it's the ownership.. You know you said that the agent centered model was really agent centric and you're putting a very very fine point on that. It's something that I hadn't thought about when when they came along and disrupted with it came a lot with the agency model, it was with the look backwards. It meant the brokers aren't going to make all the money now. Out of the real estate transaction but it didn't really put the agent in control of the business and certainly didn't give you a reason to cheer and work with the help of their agents. Were as here anybody in the EXP world does better by definition we do better. We looked at that and said this is going to change how it's being done. It's coming through as a force and either we're going to get involved and be a part of this or I think we're going to get it right.

KEVIN: And those are points that as an outsider right you said something that's important for listeners to hear. And I'll repeat a couple of the points. One is you knew about the EXP but until you dug into it you maybe didn't know anything other than the observation that in the Kellems parlance cappers and Magas and big teams are moving and other people outside of even the franchise systems are moving and it wasn't until you dug in that you start to see about that. I've had every independent broker I had come on and I'll ask you the same question from a competitive landscape standpoint because we have a number of independent brokers that are like this podcast interview. How concerned were you and your wife as a former team leader about email to recruit as an independent against the value proposition.

SEAN: Once we got into it. One of the primary questions I asked her and my wife she was a teenager like you. That's a professional recruiter. I said Can you recruit against this. She said no what they're offering agents I can't recruit against. That was a big eye opener.

KEVIN: What's interesting now and we have example after example of this I'm not going to be a number of episodes that people ability to listen to and Sherry Elliott is one of them that they'll see if they want to search for it and look for it was a mega agent with a team from Keller Williams she's in Flower Mount outside of Dallas and she has huge success with it right. She was a very very high producing successful agent and when she found the value proposition I think she was the 14th agent in Dallas. We have 800 agents in Dallas now. So if you're listening to that and you're in a market like Sean's market in San Diego there aren't 800 agents there yet but certainly it's pretty easy to connect the dots now in Sherri's case, she's built a revenue share business that's in the mid six figures and growing in less than two years. The thing that blew me away when I heard this quote is She takes 5 % of her commission and buys EXP stock and she's been doing that since month 1 when she joined and she gets it at a discount that's offered in terms of the value proposition you get as the EXP agent buy her 20% of the market. This is so strategic and most agents are like well that sounds interesting right? I've had agents tell me this. Well let me tell you what it's done for her. And then we ask you how interesting it is after less than two years. She just announced that without paying attention to it just automatically diverting the 5 %. And here's the reality most agents wouldn't even save that 5 %. Thats is the Achilles heel of real estate. We're all busy and we don't save what we should be saving. She has seven hundred thousand dollars in her equity account in the EXP stock in less than two years. So I would ask anybody for a franchise system either the one we just discussed or another one with a balloon or where you are independent have you accumulated seven hundred thousand dollars in equity in two years. The answer is no. If you don't like that figure you're like oh that's an aberration. I was in a lunch and learn in Austin yesterday another agent less than two years here in Austin. Not nearly the producer at Sheri as you and I have a big team she said. I have a one hundred fifty five thousand dollars in equity in my account less in two years so I consider that the big game changer. If you're a franchise system the system is not set up to provide you with equity. That's certainly why Shawn were you and your wife look at this and they're like you want to and your passion about accepting your messaging changing the lives of agents. You want to help people create wealth. And I think that you're new enough to EXP that frankly your job probably drop when I just recited those 2 numbers. But those are one of hundreds of them now. And so the game changer in the industry that I expect will happen is there's plenty of people now just like you and your wife will be on in another couple of years they're going to be able to show the actual numbers. We got plenty of the show the numbers now. But now imagine recruits looking out and going well I'm in this franchise system. I'm not sure oh well why don't you go talk to Sean why don't go talk to Sherri. Why don't you go talk to Chrissy. Why don't you talk to whoever you want to Pat Hays in San Antonio and you have demonstrable numbers where people can go well this is what my life looked like when I was in the franchise system. This is what it looks like now. You're at a decision point. We're not right for everybody but if you like your net worth and your streams of income to look like mine I don't know how you do it where you are. And that is frankly... the technology makes it happen but that's the game changer. There is no other wealth creation business and Gene Frederick and I met with somebody who is been on the Hall of Fame in Inman and she made the comment she said I teach Wealth to Real Estate and Mortgage Professionals in my opinion. This is the only value proposition meaning EXP realty that I would ever endorse.. ever.. as a wealth creation vehicle because that is frankly my frustration of trying to teach real estate professionals how to build wealth. There hasn't ever been a model that allows them to do it.

SEAN: Completely agree. I think from an independent brokerage model. Just the just the EXP alone in real estate is enough that agents should be joining the between the technology and the fun and I didn't even mention the support on the back it mean to have people standing behind a desk in the virtual world for technology for Broker questions for agents services for accounting. You can't even get that in a lot of large agencies. So just those tools the alone makers come aboard support your real estate business. Then you start realizing what you can do with revenue share or what you can do with the ownership. I don't want to recruit agents. That's great. You're a phenomenal Real Estate Agent. Be it. Take 5 %. What most companies would charge as a franchise fee. Take that money and invest it yourself and grow with the company. Otherwise... we have a great agent on here named Mary Maloney who is part of a large group that came to EXP and she was doing a luncheon and she got up in front of a bunch of agents and said I don't want to die on a listing appointment. I want to be able to retire at some point. And that's the problem. Before DXP when you stopped showing homes you stopped making money. This is an actual retirement equity building company you could be a part of. There's nothing like it.

KEVIN: Absolutely I would agree with you. So if somebody is an agent or a team leader which is the kind of people as a productivity coach you work with. I mean what would your advice be if you were a friend of yours and you knew them whether they were in the previous franchise system or not. What would you advise them to do. In other words they're seeing their peers moving what's the right steps as far as due diligence.

KEVIN: Well the first step is if you see people you respect moving check the time to explore. Don't close your mind. I would then come to one of the luncheons or the classes where we're laying out what this is about. Because when you first hear of it there's so many levels and layers it takes 10 or 15 minutes even get it all into agents. We've met with every one of them walked away saying my mind's exploded. I have to go do research. That's the next step. Now you're going to want to go do your own research. That's great. We just listened to Jason Guessings CEO said "I don't want any agent come aboard and so they're absolutely ready". And this is such a new model and so such a vastly improved model but I really think it needs to go and wrap your head around it. It almost sounds too good to be true. The first time you tell them what's happened.

KEVIN: And that's a good point. So for agents that are potentially or even if you're an independent broker or a team lead for a team the more complicated your business right a solo agent can get introduced to EXP. Talk to whoever introduced you to the EXP or as Sean said go get in touch with somebody that you're peers maybe you're at a franchise system you saw somebody you respect completely lets join the EXP you can certainly reach out to them and ask them about it regardless of who introduces you to the EXP. One of the great things Shawn said about the agent centric agent owned culture is anybody in the company from Gene Frederick to myself to Sean to whomever will be happy to help you with your due diligence. Doesn't matter who introduced you to you EXP that so you'll be involved with from a revenue share standpoint right there the ones that made the entree and got you involved. But don't ever confuse the fact that you can't say look hey I want to talk to Sean. I want to talk to Kevin I want to talk to Pat Hays in San Antonio you'll listen to some of these interviews. At the end of every interview is contact information we want you to be able to reach out and get the right information. The market is getting more abuzz with misinformation misdirection from some of the franchise systems. We want you to do it best the best available facts we want you to make the right decision. It's not a perfect fit for everybody. So in order to do that whomever introduced you EXP if you have a medium to highly complicated business let's say you happen to have a team and you're doing a fair amount of business it's mission critical. You do it right. You may want to talk with somebody else. It's a rainmaker. It could be Sherry Elliott and Dallas you could be Brent Gove in the Sacramento or in Northern California. We will get you in touch with the right people. Just ask whomever introduced you to EXP to make an entree to somebody that is a peer of yours or somebody that's taking the path before you. You're an independent broker we have plenty of independent brokers that are available to tell you about how they converted their business and best practices for a powered by EXP solution. Now if you're a franchise expansion team leader and you're in 5 10 markets and we're starting to see a lot of contact from them we want to get you in touch with the Gene Frederick so the world or myself that we can bring the sea level executive team in so we can help you understand because at that level you're like a C level executive yourself running a big business. We expect a lot of them to convert in the next six to 12 months based on market conditions. If you don't take a quick pass. I have somebody who's a Harvard educated guy who has a seven market expansion team. The comment was well he's going to go look online and get some information and I told the CEO of this company he's a smart guy. I said What would you venture capitalist tell you if you said him I'm going to move my multi million dollar business and I'm going to do a little research online. He laughed and said I know I've got to get him in touch with Gene.

SEAN: I am a Princeton graduate I'm not surprised the Harvard Graduate doesn't figure it out. You do have to do your your due diligence. This is your career and I've been amazed by the number of people that I've been able to reach out to like you who will take the time and say here's how it works. Here's why it works no matter what level you are. Like you said whether you're a single agent or you're running a 150 transaction huge company there's somebody EXP who's been at your level and who made the move and it would explain why it benefited.

KEVIN: And that's something that's not apparent from the outside. Right?. People are thinking well I can look at a video other I'll do a google search and I'll see a video of Gene Frederick they'll look at the link and they show notes for this episode and see the seven minute intro video just know that whether you're an agent a team lead for a team and expansion leader or you're an independent broker. We've already taken plenty of people through the due diligence. We're going to help you understand whether it's a good fit for you then that's ultimately your decision. But as Sean mentioned here's the reality. There are plenty of people to help. It doesn't matter how you came into the EXP. We're going to respect the fact that somebody introduced the opportunity to you and we're going to offer you... because we're all shareholders and that's different than a franchise system that's different than if we're individually owned and operated a location where they're almost islands. So I just know that that's the case so Sean before we let you go any final thoughts before we have you get your contact information out there in case somebody wants to get in touch with you.

SEAN: Just this one I've been to a lot of different conventions for a lot of companies including realty brokerages and when they announce an expansion they announce how many new agents they've brought on every one cheers. Think that's great they look like they're a part of the team. I can't wait to go to our convention. And when they announced the latest aging count or the expansion going on you're not just cheering because it's great news you're cheering because it benefited you directly. You're an owner of the company that's getting bigger. That's a change.

KEVIN: I agree completely. So if someone wants to get a hold of you Shawn how would they reach you.

SEAN: They can reach me by phone call or text. 619 993 9888. Or they can email me [email protected]

KEVIN: Perfect Sean thank you so much for coming on the show.

SEAN: Absolutely. Kevin It was a pleasure. Thank you.