In The Cloud - The eXp Realty Explained Podcast

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. 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. 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 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 Jon to inquire or ask questions. Contact Jon Sterling Phone call or text at 720 605 1063. Email: Jon.Sterling@exprealty.com 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. Jon.Sterling@exprealty.com. 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.

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: realestate@group4610.com 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 realestate@group4610.com 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.

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 Tom@TomDavesteam.com. 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 Tom@TomDavesteam.com. KEVIN: Okay perfect. I appreciate you coming on. And thank you so much Tom. Thanks Kevin. Have a great day.

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 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.

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 Sean@thriveestate.com 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 Sean@thriveestate.com KEVIN: Perfect Sean thank you so much for coming on the show. SEAN: Absolutely. Kevin It was a pleasure. Thank you.

Interview - Jay Kinder In today's episode we have Jay Kinder, who has been in real estate for 20 years and started his own independent brokerage company prior to transitioning to eXp Realty. We hear about Jay's previous experience, why he chose eXp Realty, how eXp differs from other companies and how you can learn more about opportunities with 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 Recruiting and retention challenges as an independent brokerage or large mega agent team Why Facebook comments are not the best way to reach people How many agents the number one franchise system in the world is netting vs. how many agents eXp Realty is netting Agent attraction Importance of speed to market Company culture Roadmap for vetting 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 one of the contacts below to inquire or ask questions. If you are seeking further information, eXp has Lunch and Learn opportunities, weekly live webinars and other resources such as pre-recorded videos that can be sent to you. YouTube videos are also available online. Contact Jay Kinder, email at Jay@Jaykinder.com Contact Gene Frederick, text 703-338-1515 Noteworthy "It just seems more real so we just thought all in all it is a better platform. It just made sense to us to be at eXp." "I think people think, you know, it's all about how much you're putting into it. It's incredible how quickly it grows underneath you with people that you're not talking to every single day." "Essentially, if you look at a cloud-based brokerage like eXp Realty your single cap gives you access nationwide because it's a single brokerage, not each office is independently owned and operated like in a franchise system." PODCAST TRANSCRIPTION KEVIN: Welcome to the show. Jay how are you. JAY: I'm doing great. Kevin how are you doing buddy. KEVIN: Fantastic looking for this conversation. I think a lot of people are when they listen to this. Before we get into sort of the meat of the topic on the eXp for agents that may not know your background why don't you give a quick bio and background before we jump into the details. JAY: Yes sure. I've been doing this 20 years now so I got into a real estate a pretty young age. My dad owned a, bought actually in 1997 a Coldwell banker franchise from being an independent. And then I got into a real estate late that year. And so about 20 years now that I've been selling real estate I was very fortunate to invest in myself go to every conference anybody who sold anything for real estate agents. They have my credit card. That's for sure. I was fortunate to be pretty successful early on. My first you know four five years were pretty good. I ended up I think number two in the world for Coldwell banker for several years. Selling I think at the peak of my career five hundred and something homes kind of went on to start a coaching and consulting company with my business partner Mike Reese who is also a real estate agent. I kind of got him into real estate and we just found that we really enjoyed helping real estate agents grow their business. That was something we were very passionate about. We started our own company together as well probably in 2014. I think officially we restarted up and brand new brokerage together. We both had our company separate but we put one together and started growing that in about 2015 16 17 and then obviously last year we joined the eXp. KEVIN: So for listeners I want to give some context to this Jay and I think first met we were trying to figure it out before we started recording somewhere around 2004. We were both in Austin, Texas. I was living in Austin at the time. Jay was down from Lawton, Oklahoma and Chad Goldwasser had put together, I can't remember what Keller Williams event it was but there was an event and there were about 15 or 20 of us at dinner and Jay happened to be sitting across from here next to me because I remember you made this comment and I think it's very very apropos for the conversation today which is you've been successful like you just talked about Coldwell banker. You made the comment. You said I'm happy to come learn. I get invited every time there's an event. It may have a mega camp or something like that by Gary Keller. You never changed and I want for listeners to say that again. I mean from 2004 when Jay and I first met he had already been courted by Keller Williams and Gary Keller personally for years and now it's 2017 all of a sudden after what you just described and the coaching and consulting business you and Michael launched a brokerage business. You made a hard turn and double down so to speak on the eXp realty. Let's talk about why. What was the genesis for that decision. JAY: The genesis for that decision was you know as an independent you know of course if you would asked me if I was interested in joining any brokerage I would have been adamantly opposed to it. I consider myself lucky that I was even open minded enough to consider it as an option because I wasn't certainly looking to join any other brokerage once we went independent and 2011 and then we started our own brokerage that was independent. There were just you know that was a direction that we were going and we had a brand that we were building and we wanted to expand that brand across the country and we weren't looking to join a brokerage that wasn't a problem that we were trying to solve what problem we were trying to solve. And I think what really made us have to really consider eXp was the recruiting and retention challenge that you have as an independent brokerage or as a large mega agent team however you want to look at us was something that we just consistently fought you know year in and year out. And when we look at the eXp model it really was just a better platform for us to kind of expand our real estate business across the country as we were intending to do. It just made a lot more sense to do it at the eXp. There was a better value proposition that we could align to what we were already offering in terms of value. And there was just a better business model that was already in place with publicly traded company, having shares and ownership in equity which we wanted to incorporate into our model that we really didn't have a good way to do that. And I think most agents don't really buy in for the long term of an independent because there's never really you know what's the true value of that independent. You know if you were to even implement some type of equity you know opportunity or whatever there's limited value to that because it's not real. And I think eXp became very obvious which the stock trades for you can go look that up and sell it you know. Obviously after you've invested you can go out and sell that stock. So it just seems more real so we just thought all in all better platform it just made sense to us to be at eXp. KEVIN: You know it's interesting. I ran across the same comment from an independent broker in the Portland area that converted his 30 plus agents in the eXp and I had originally approached him to look for potential acquisitions and or people that might be interested in eXp. Not initially even on his behalf. In other words he made the comment to me send me the information. Let me understand what you guys are all about and what was interesting I sent to him on a Friday. Even before Monday arrived I had some text and call saying hey I'm going to get another call with you. And I got on the call and his comment was the same thing you said which is I don't know how I remain viable as an independent when there is this alternative value proposition. I think that is the big wave that's coming. I know you're seeing it not only with mega mega agents and teams but the independent brokers people that have built solid businesses and we already have numerous examples. I've got a number of them that I've already recorded and will be recording of independents coming into the eXp and everybody says the same thing. And something like to this effect not only retention but the guy in Portland said when I started doing my due diligence I started calling people and when I got to some big franchise recruits that I thought I could get into my firm within the next 12 to 18 months. These are the people that you typically have to court for a while. Every one of them either was already in play for eXp or told them if I move anywhere I'm moving to eXp and that's happening every market across the country. It's an interesting prospect. So Jay if you look at this from the standpoint of equity and you know most agents and I want to kind of let you expand on that. Most agents have either been sold a bill of goods of especially recently that you want to be part of a private company not a public company. I will make the comment I did nine startups out of Silicon Valley including two that went public. That is the most asinine comment by that leader that I've ever heard. I mean unless you are passing out equity like a law firm does two partners where they divvy up the pool of income and profit at the end of the year you're being sold a bill of goods. There's no easier way to say it. If you're drinking the coolaid so strong that you're waving the flag now. Yeah yeah. Private private private. I am so sorry. Go run around Sandhill Road and talk to the venture capitalists and the entrepreneurs that tried to do it privately. Competing with companies and that's not to mention in the real estate space all of the venture funded entities. If you're the lone private entity who is run by the largest shareholder that's trying to tell you that private is good, just go do some due diligence. Go talk to somebody that works for a law firm that's highly profitable that is private and ask them how they participate in that profit and then go back and see if you have an opportunity do that because the last time I checked there is no profit other than profit share being handed out in that large franchise system. I come from it. It's a great company. But Jay, don't you think that once agents do their due diligence and some of them are doing it in a week some are taking 6 months but when they look at this and they start thinking about building wealth and they start thinking about retirement, other streams of income there really isn't a second choice in this. Is there? JAY: There's not a second choice and it's fascinating to me. If you go back and live 30 years ago it was "Keller who" you know when they were first taken off as an example the influences really kind of drive the growth of the company. And I got two messages today literally since right before and probably in the last hour or two that are agents that you know they basically watch the webinar, a they are interested in. One guy said he's 95 % there and the other guy actually said something very similar to that in his comments. And I think when people you know what's really you know we're just at the you know the tipping point you know getting close to 10,000 agents and you know I've always heard that is the tipping point but I've never felt anything like a tipping point like this. I mean it is incredibly interesting how many influences, mega agents, independents see the value proposition they see that's real and I think the other agents you know that are leaders maybe in their marketplaces but they're doing a good business and they're happy where they're at. You know that's going to be the next big wave in the next 12 to 18 months of agents that just this is obviously there's a lot of smart people that moved over here. I get it. I'm moving over here. I mean I can only expect that that would be the case. KEVIN: Gene Frederick and I have coined the term super influencers. We're going through a phase now and you certainly qualify in this category Jay where you get people that have both on their network and also on their social media following Super influence. They're disrupters, when they move especially in the context of what I said about you were you being courted for more than 10, 15 years and then you made a move and those people in the industry that didn't realize that was even a possibility. It was highly disruptive in the market. I know that you've had some huge success. You've had a bunch of people come over afterwards and I think that last time I saw your numbers and I'll just ask you for an update it's been about 100 days hasn't it? When we recorded this and how many people are in your revenue share group? JAY: We partnered obviously me and Michael and Stacey who brought me on board and I think you know all together we are now at just under 300 in total in our revenue share group. And I believe like my personal line it's something like 25 or something like that 27 I think actually now. So yeah. I mean it grew super fast. I think people think you know it's all about how much you're putting into it. It's incredible how quickly it grows underneath you without you know.. with people that you're not talking to every single day. I've a lot of conversations about eXp every single day. I'm happy to have the most fun I've ever had in my life. Having those conversations all day. The bottom line is people tell people who to tell people who tell people and your revenue share grows without much effort beneath you is what I experienced thus far. KEVIN: It's the viral nature of real estate. Now people have people in the real estate business that they are personal friends with or they are in their network. It could even be in their city or their part of their referral network much like what happened to you when a brokerage change occurs. They're like well why did you go to eXp or what's up with eXp. And like you were discussing you'll have them watch a quick intro to eXp or a webinar. It's a little crazy silly. How much traction there is. Because as a former team leader for Keller Williams I can tell you I haven't tried to recruit Jake Kinder but trying to recruit a Kapper or a mega agent was a six months to a six year arduous process. In other words it was a huge win. If somebody like Gene Frederick or I got a mega mega agent and you just look at the last seven days at eXp you know and there's like 500 million dollars worth of production and teams coming in in a week. And for context and the reason I bring that up is it's easy for people to get confused especially because there's a lot of noise and information in the market that it's not very very viral. I know of a franchise office I was told about on the East Coast where not only the team left but all 1 through 5 left in one week. And this is happening for context for listeners to this without Nine hundred team leaders, without managing brokers going out and doing recruiting on a basis. Now you've got people like Gene Frederick, Jay, myself and a whole bunch of other people including agents they're just talking to as Jay described agents in their network. You know maybe somebody did a cobroker transaction with and then they decide to join. But it's very viral at this point isn't that sort of the feeling that you were describing earlier as never felt like it. JAY: That's exactly what it is. It's a completely viral. I found it interesting. There's kind of a unique balance of people who still have never heard of eXp which is a huge opportunity because most people have never been even exposed to what it is and then it seems like there's another subset of the market that were exposed to it didn't really probably weren't properly exposed to it or maybe they weren't exposed to it in a way that they actually listen closely to what it was or looks closely at what it is. There's the people that had been watching closely bought this stock and are just waiting here just waiting for the right person to come on board it so that they know that it's a good decision. Maybe they're fearful or maybe it's just timing. You know those are the kind of the three different tiers that I tend to run into. It's just incredible opportunity. I think still with age I still really don't know anything about eXp or haven't even really heard much about it in some markets. KEVIN: And I would echo that I just had a conversation with about a 10 or 12 million dollar producer in San Diego and I happened to run across her and asked her if she had ever heard of the eXp and we were on a phone call much like the calls that you do Jay. She said it's the wildest thing I see it all over social media. I see it. You know when somebody post something about changing brokers in a Facebook group about real estate and there's 300 comments she said but I've never seen anybody talk to me about what it really means. And that's the opportunity. And you know I want to put a footnote in here and I know you'll probably echo the comment which is commenting for those of you that are already with a eXp and we'll have a lot of people listening to these interviews just for tips and thoughts and be able to frankly share it with other agents that are not here yet. The time to jump in and a 300 comment thread on Facebook is not the right way to get somebody's attention. It's about the one on one conversations. It's about building a relationship with somebody. It's about being purposeful about value and it's not a perfect fit at the eXp realty for everybody I'm sure you've had plenty of conversations like I have. Were the parties mutually agree that OK well it's either not fit now or just you know what. Thank you very much. Or not. I can tell you that I don't jump in those comment streams but I can tell you that invariably when I have a conversation with somebody about eXp that is active in one of those groups, they receive them fairly negatively. In other words I would encourage people if you're listening to this and you're with the eXp to stop the cheerleading in the comments and you know touting revenue share in these 300 comment threads and these Facebook groups. Get into a one on one relationship with people including people who are active in those groups and have a phone conversation. Let them watch the webinar and let them learn the true facts because all it comes across as is overly aggressive. People didn't like this when it happened at Keller Williams. Like I said before, I was a team leader for a long time I ran several market centers Gene Frederic was a team leader, the number one team leader in the country and we never did that. In other words there's plenty of agents that are all excited and you just talked about having somebody just this weekend. Reach out to you. I had two people this weekend as well. And it wasn't because I posted a comment on Facebook right. I don't never see you do it either Jay. JAY: All we've done actually.. we haven't done anything and of course we're you know by the nature of our business as we market the real estate agents all across the country and have been doing that since 2006 so I haven't sent an email talking about eXp or our move. I haven't done anything on Facebook other than doing Facebook Live to announce it and then using you know Facebook Live to interview other people have made the move as well. That's pretty much all we've done so far. And you know that's a good way to get the message out if somebody wants to tune in it can and will have to. But the thing you know that way you're not you know in their face you know trying to force it. I think you want to you know again it's age and attraction agents that are interested in it keep hearing about it are going to be more likely to snoop around a little bit more maybe ask a question are private messages or something like that. But you know just go out there and jumping into a forum using making comments you know about eXp definitely not the right approach in my opinion. KEVIN: I would agree. Now Jay let me ask you a couple of questions. Obviously one of the big things that I see a lot of people asking about is there's a lot of focus on multi market operations and expansion. Right? You know some franchise systems you know like to think that they pioneered this but if you look at the eXp value proposition because you do deal with in your business and I know you're relationships with a lot of the teams that either are already multi market or that's part of their business plan. How much of a game changer do you think that the two things ,the one the single rainmaker cap nationwide for eXp is and then to the fact that they have the team concept in terms of the capping including the mega mega team program how big a game changer in the industry do you think that is going to be? JAY: It's super interesting. For us, it's a huge deal I mean because we were independent so we didn't have you know I guess you know if you look at other systems or other franchises that have something similar. I mean there's way more cost associated with trying to you know expand into new markets with that business model then there is at eXp. There is clearly you know a huge advantage as far as making that an affordable opportunity. And it's interesting because I have got on a few conversations that probably my third or fourth weekend where I had an agent in Virginia that wanted to join my team. She had been on some type of an expansion team somebody at Keller Williams. I'm not sure who it was you know she was looking for some lead generation and things of that nature but she wanted to join on a 50/50 split. I had not been thinking about it that way because most of my conversations have been with influencers and things of that nature so I was just looking at you know I've been sharing over and over and over conversation after conversation you know just the business model and I wasn't presenting it from a here come join my team perspective and it kind of hit me is like my goodness. I mean there could literally be you know you could have a thousand agents on your team. I think you know 15 years of my career. Everybody was focused on how do you get to a thousand transactions and I think now that the opportunity for someone to have a thousand agents on their team that wants to control lead gen and bring agents in under a little bit stronger value proposition than just whatever the eXp is offering in order to help them be successful. You know that's a real possibility. It would be something that you know that I've never seen done before that's for sure. KEVIN: And I think that that is something that inherently, I have some people I'm interviewing about this but is inherently in some of the franchise systems the conflict right. Essentially if you look at a cloud based brokerage like eXp realty your single cap gives you access nationwide because it's a single brokerage not each office is independently owned and operated and franchise system. So the conflict that I see coming down the pike is you can have a national conference like happened recently and announce that you're going to do a virtual cloud based operation. Right? They didn't give a lot of details but now imagine you own the office in Oklahoma City and you're the franchisee and you used to get a cap when the expansion team opens up in your market right. You're going to get some amount of company dollar. Now income is virtual and you're not getting that anymore. I think it's going to be I guess I'll give it a nice pleasant turn but it's going to be very messy for the franchisees in the franchise or to sort through all of that. Silicon Valley approach to this, speed to market is the winner. You know and I think a lot of people are starting to wake up. Most people including a lot of people listening to this don't realize what a big ramp up that eXp is going through. Frankly Jay a big part of it is the momentum that you brought in because if they were running at 300 agents a month in September-October and they hit 988 in January that's a big part of what Gene and I have given the moniker super influence effect. And there's going to be a lot more of that. And for context the number one franchise system in the world netted 908 agents in January. You probably didn't never hear that figure before but I've seen it so with 900 offices they netted 900 agents. eXp did 988 without team leaders with a single nationwide footprint. And so what's ending up happening is what used to occur as they expanded in a franchise system. You know Gene and I did this. You get a bunch of agents excited. They want to join and then they have to wait till the franchise is awarded. They have to wait until the bricks and mortar acquired they have to wait until the office gets a core group and mix application including with the person who gets approved as the franchisee to run it. That takes 12 to 18 months. So flash forward Jake Kinder comes on board in October his phone rings off the hook for the first 30 plus days. Somebody is in San Diego. You know they have 15 agents. Hypothetically they get excited to watch the web an hour they want to join that maybe talk to some of the senior people who are accessible at eXp especially for people that have a substantive business that's a big deal like a list for you. And I know you did talk to Glenn and others before you came over. They come over and it takes 10 days, not 18 months. So for listeners that have been told especially if you work for a franchise system there's no way they can sustain this growth at eXp realty. Here's your wakeup call. It takes as little as a week to 10 days to bring over mega teams. In a franchise system especially if it's an expansion effort and there's a new market center involved is you're talking 12 to 18 months. That's their Achilles heel both for the virtual market center aspect as well as the other aspect we talked about earlier which is the direct conflict. For those out there that are wondering and scratching their head of how did this brokerage go from you know 800 or so agents to 66 hundred at the end of last year to break through 8000. Now as Jay mentioned at the top of this interview close to 10000 that's the clock speed that it's running out. There's no reason I'll put a stake in the ground. I don't what your prediction is but I think that will be at every bit of 22 to 25000 agents at the end of the year. What's your number. JAY: That was the number that I had been thinking to January. And I want to say I had a conversation with Glenn in December. The thought was maybe 13-14000 at the end of 2018 and then at the end of January I think that number is going up considerably closer 20000. I believe there would be more than 23000. The only question that I have is the onboarding process and it's super scalable what they're doing now. So it would stand to reason that they could continue to scale out that apartment and manage the you know the pace at which we're growing. There are some estate broker things that probably come into play there that need to be dialed in there to get more than 23000 but I would definitely bet my left arm on 20000 unless there's some type of internal reason for us to not grow that fast. I can't imagine not hitting 20000 at the end of this year. I just don't see any way especially with the influencers that I know that are on the new on the transition right now and the ones that have already come on board. It's just got too much momentum to not do that. KEVIN: Absolutely and my take on it to Jay is the fact that we've hit critical mass. In other words some in the marketplace and this is some of the noise and misinformation is that they can't keep scaling the eXp realty. There's no way they can do this. And there is a demand portion of that which we've been talking about right the super influencers, the influencers the momentum even down on the agent level worry they'll join and then two or three people will join and then they know two or three people and that's that frankly there's more agents joining from that than just the super influencers right. You look at since you've got here you know if you add 2500 agents and you talk about having 300 in your revenue sharing group. It's still growing much faster than even what you're doing. So the demand side is there. If you look at and I've worked for nine startups in Silicon Valley, the stuff that the marketplace doesn't understand is the systems will all be scalable. They're always going to be periods of time when demand outstrips the capacity of the entity. The difference is if I've got to open up bricks and mortar and hire people and stick them in offices and do things physically there's a meter on it as to how fast I can grow. So if you're just talking about building systems that are scalable that are cloud based, the cloud based model beats the bricks and mortar model every time. So Jay if you look at where you are getting most of the interest from obviously it's across the board right independence you get people from the big franchise systems when you look at an agent that's maybe listening to this. You remember they were involved with your association or something else like that. What's the advice you can give them as far as you know due diligence and vetting and the whole purpose of this podcast is to get it out in your words but also to give them a roadmap for vetting. What would you advise them to do? Obviously they listen to this potentially. Now they need to you know dig in and make their own decision on the eXp Realty. JAY: Do your due diligence. I would say you know talk to agents. One thing I would say not to do is you know don't look at just the agents in your marketplace that are have currently joined eXp and make a decision based on that. There's still a lot of marketplaces where the agents that came on board were super early adopters and maybe they were not doing a lot of transactions or whatever the case may be. I would say get in contact with you know someone that's at a high caliber and talk to them definitely keep listening these podcast. Definitely watch some youtube videos and things of that nature but talk to some agents that are here eXp now and that are doing production and ask them what you know. It's everything it's cracked up to be. I think that's one of the things that you can do that that the easiest and you know see what the truth is out there would be what my advice would be. KEVIN: Absolutely. That's good advice. Another thing I would say to echo what Jay said... We still have markets at the eXp where there are a look like Texas was three years ago when Gene Frederick first approached me about Texas. I want to say they had less than 25 agents in the entire state of Texas. eXp at this point has 1800 agents, they're adding way over 100 per month. The complexion of it and the difference in the brokerage operation is like night and day. Not only is the brokerage infrastructure in terms of the state broker and all the State Administrative brokerage team and I think it's close to 10 people at this point. Completely different. And that's the scalability as well of the business. That's the only thing that I'm glad you brought it up a run across. More people say well I can't look at the roster in my market and there's only a handful of people and I'm not sure you guys are going to do what you do in my market that you've done in other markets. Well it's just a matter of time in my opinion and that's what you just said Jay which is raise your hand and the other thing I would say as far as vetting is that you should, whoever brought eXp Realty has an opportunity to you. Ask them to get you in touch with some other people from a reference standpoint. The culture of the business is such that even if somebody is a fairly large producer or mega agent or they're in a different market if somebody pings them and says hey I've got this prospect, they're really interested in the eXp. They're a little concerned about their market versus what we've done in other parts of the country. We will absolutely get you connected with somebody. It doesn't matter if they are in our rev share group I would do it for Jay. Jay would do it for me. Anybody would do it. We can get you in touch especially if you're a larger independent brokerage and you know you're thinking this is strategic for me. I've got 30 to 50 agents, I've got 100 agents. We had one in the southeastern United States that approached us with 350 agents and five offices. If you're out there and this is strategic, you're listening to these podcasts episodes and you need help. There's plenty of help it's the culture of the business that's in our DNA. And I see you doing it all day long Jay. I mean you raise your hand and say look let me help you Gene and I do the same thing. We don't care and Gene frankly is the evangelist and the ambassador for eXp, he's out there running regional trainings and events all over the country and every once in awhile he'll say to me he goes I think they're in my downline. I think they're in my revenue share group but he doesn't really care. Most of us don't care. We don't care anymore. I know you don't care either. JAY: The culture is just incredible and you think OK well it's not you know there's no brick and mortar attack and you really have culture. This is probably the most culture rich organization I've ever been apart of there really is... It's just engineered into the DNA. When you come on board the eXp to help one another and you know there's not this oh well you're not my downline that's not at all the feel which is something I didn't necessarily expect but I've been really pleased to see that it really is truly you know a lot of givers in this company that are wanting to help one another grow and are willing to help anybody in the organization no matter where they're at. And that starts at the very top with leadership. Now all the way down to you know any agent in the company that's very special to be you know to be able to kind of see that and experience it. It's very rare I would say. KEVIN: Great. Well Jay this is another example of you giving in terms of coming on the podcast I appreciate it. Before we let you go any other final thoughts and then I'm going to have you give out your contact information in case I wants to reach out to you. JAY: No I don't have any final thoughts. I mean if you've been thinking about it you know take action. I think this is you know one of the better opportunities that I've seen since I've been in real estate and certainly think that you're going to be better off here than not being here. KEVIN: Fantastic. Jay if somebody wants to reach you and connect with you how would they find you either on social media or on the web. JAY: You could probably just Google me that's probably an easy way to find me but if you want to e-mail me you can shoot me an email it's my name. Jay@Jaykinder.com. KEVIN: Fantastic thanks for coming on the show. JAY: You got it thank you.

Interview – Gene Frederick In today's episode we have Gene Frederick, a current member of eXp Realty's Board of Directors. After getting into real estate in 1984, Gene worked for a small independent and then transitioned to RE/MAX for a number of years before purchasing his first franchise. Additionally, Gene spent over 21 years with Keller Williams as a manager, team leader and regional owner of six offices across the nation until discovery eXp Realty. In this episode, Gene discusses how he found himself at eXp Realty, a revolutionary real estate brokerage model, why agents love this model, how eXp sustains 8,000 agents and why he compares eXp to Netflix. 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 Gene's background in realty and why he transitioned to eXp Why independent brokers are taking a closer look at eXp Realty Why transitioning away from brick and mortar is sustainable The benefits of utilizing a Cloud Office What is a disruptive technology and why it is important The future of real estate from a broker's point of view Why top agents are joining EXP Resources To contact Gene Frederick, text 703-338-1515 Gene Frederick on Facebook, https://www.facebook.com/gene.frederick.750 Tweetables "If you are constantly having to think outside the box, maybe the box needs fixing." PODCAST TRANSCRIPTION KEVIN: Welcome to the show, Gene. GENE: Oh Hi Kevin. How are you? KEVIN: I'm fantastic. So you know before we dive in on eXp Realty and I'm going to ask you some questions specifically about eXp. Why don't you give listeners that maybe don't know your whole story your story leading up to before eXp and then we'll talk a little bit about what made you decide to do what you did before you joined eXp. GENE: Thanks Kevin for having me on today. I really loved telling this story because I've been in real estate since 1984, here in Texas. Most of my career has been in the Dallas- Fort Worth area. So when I got into real estate in 1984 I worked for a small independent and then went to Remax and I was at Remax for quite a few years and then in 1989 I bought my first franchise which was a realty executives franchise owned that for five years in DFW and I sold that in 1994 and in 1994 - Boy these years go fast let me tell you - 1994 my wife and I Susan I were two of the first ten agents to launch Keller Williams in the Dallas area and the first Dallas office. And I spent 21 years almost almost 22 years a little over 21 years with KW until I found out about eXp and that's what I want to talk to you about today. In other words I learned about this three years ago and my story is I was basically... I was basically retired as being a manager and team leader my wife and I both are and the team leader Hall of Fame at KW. We were team leaders for quite a long time, regional directors and we also owned at that time we thought we were retiring Kevin. We owned 6 Keller Williams offices across the nation; 3 in California, two in Texas and one on the East Coast and also a region. We owned the Keller Williams region for Northern California and Hawaii and we were basically retired here. We had moved to Austin, Texas 2010 and a couple of my past agents came up to me one day and said "Could you check out this new model?" And I said sure, I don't have anything to do with you. This will be fun. And a gentleman named Glen Sanford flew into Austin, met with me for a couple of days and it was just awesome to meet Glenn and the new model that he showed me and treat me so much. I spent five months researching it. I flew up to Boston to meet the CEO at the time still our CEO and been our CEO for right now eight years Jason Guessing. He lives in the Boston area and those two gentlemen showed me this new model. And after five months of researching it which is exciting. Not even looking I came back to Susan in the spring of 2015, not quite three years, and I told her I said Susan guess what. She goes "What?" And I said, "Well honey if you knew Netflix existed would you own a blockbuster?" She said, "Of course not." And I said "Well honey, we owned six of them." And she said, "Excuse me." And I said "I just found Netflix and that was the eXp Realty." And it was really funny at that time, it had about 400 agents and with the way Glenn's vision laid out in a way Jason was so convicted and Glenn is such a visionary. Seeing something that could go very very big and revolutionizing the way real estate brokerage was going to be run with agents as owners, not the brokers and owners, and I said Honey I think we got to sell all the blockbusters. And she says oh OK and just see you know Kevin try that out for size after 20 years of marriage and look at that and we're thinking we're just about ready to retire. And I said honey this is going to work. This is really going to work. So in the spring of 2015 we sold our six offices and our region and we join the eXp Realty right around May 1, 2015 and we've been with the company two years and 10 months and I can't tell you why I joined. I mean this is revolutionary to me because if you ever read Malcolm Gladwell's books, you know Tipping Point Blank and one of his books I remember one of the headings was and one of the chapters was if you are constantly having to think outside the box, maybe the box needs fixing. And as the real estate brokerage you know I've owned so many franchises I've been through so much of the franchise world I knew that the franchise world was it didn't just need fixing. It really needed a whole new broker box. And when Glen Sanford showed me this model and said Gene the agents, the agents are going to drive this model, not owners. Actually when I first met him, Kevin it was funny, he said and I looked at it and about a month later I called him up and I said "Glenn, I'm curious how much does Texas cost?" and he goes "Well Jean it's not for sale." So what do you mean it's not for sale. He goes well we're not selling franchises we're going to build through the agents and that's when I knew we had a new box and that excited me to grow through the agents with agents as owners rather than owners having to sign leases having to buy furniture having a certain territory which was to me always very very restricted from the owner's point of view, especially on the money side. So it's been two years and 10 months and I got to tell you it's it's like birthing a baby. It's my same for the last almost three years. Let's make real estate fun again. And I'm just having fun being attracted and what I found out Kevin which is funny. I've got to tell you in May of 2015 I started interviewing people in Austin, Texas. This is where I live. I had 20 interviews. Let me ask you this guess how many people of the 20 people and by the way are twenty one on one interviews 18 signed up. Guess how many of those 20 people asked me where the physical office was going to be. None of them. Not one not one. And that's when I went. Why are we building blockbusters. You know there was a reason in the 80s in the 70s that we went to a physical office right. There was a reason before the internet that we had phone numbers attached to the sign that we all funneled into one area and had phone time where agents we went into the back room and answered phone calls from people that drove by signs. And since the invention of course the Internet and the smartphone you know we have agents putting their smartphone number or whatever number they want to have called and straight into that. And there is no longer a reason for that physical office. By the way I had to 18 for 20 the first month. Of the two that did not join, one joined a month later and the other one joined like nine months later and that's when I came back to Susan I said Susan "This is it. This is the next real estate brokerage model that's going to work because I've never been 20 for 20 ever in my real estate career". By the way those were all all productive agents not news agencies are productive agents. KEVIN: You know the interesting thing about that is when you look at coming out of a franchise system you know you were doing that when the company had realistically about four or five hundred agents when you started right. GENE: Yes exactly. KEVIN: And so people like you and Mitch Riback and others have done a lot of heavy lifting. Right. The company is only you know was founded in 2009. At this point it's a whole different world isn't it. GENE: It's so funny because I look back on it. In fact I've got to tell you a story even today it's just makes so much sense to me. I texted, didn't text I actually did a workplace message to our founder our visionary Glenn Sanford today. I said glad you remember two years ago I said I got to tell you. February 29th which was a leap year two years ago. That was 2016. We're talking right now February 28 2018. I said Glen can you remember we were at a restaurant with Debbie and Susan and myself. We were in Austin,Texas at the Oasis Restaurant and Glen had his smartphone out, Kevin. And he was looking at it and I said "What are you looking at,Glenn". He goes "1996 1997 1998." I said "What's that?" He goes It's our agent count and I said we're going to go over 1000 and he goes thousand thousand?. We had a toast and we went crazy. This is just two years ago. So let's fast forward. I said Glenn that night was... To me the hardest thing is getting to 1000 agents just so you know this is 2018 in the first month of January of 2018. We added 1000 agents net every 30 days we're adding over a thousand agents right now. So at the end of 2000 yes, to give you updated numbers, at the end of 2017 we ended up with 6505 agents. Just a little bit over 6500 agents. That was the heavy lifting and now all of a sudden we did a press release just two weeks ago in the middle of February we hit 8000 agents. Kevin that is... and by the way again not with new agents experienced agents. If I had a nickel for every time an experienced agent I talked to says "Where have you all been?" You know when we go to a new town I've never heard of you but where have you been. And I said I don't know I just found them two years and ten months ago. I mean I just found them three years ago. I mean I said I'm like you. I didn't know it existed. But once I saw it I went new model new Model. It's going to work in the book Blink. You know Malcolm Gladwell talks about that there's a blink basically an emotional side of our thinking process. I'm very analytical because Kevin I used to be a financial analyst before I got in real estate. So I have more spreadsheets than anybody on earth. I love thinking analytically but when I saw this model my blink my emotional output was I went this is going to work and it has. And it's just exciting to me to have the Amazon of real estate in fact Stefan Swann Poole, the famous writer consultant that talks about real estate all throughout our industry in 2013. He did an article about us 2013. What a visionary he was. He says these guys are the Amazon of real estate and I don't think the bricks and mortar franchise owners understood what he was talking about. Well, I'm living. KEVIN: What's interesting about that is you talk about the momentum adding 1000 agents a month. It really I want to talk about a couple of different demographics and let you give me your opinion on why you think it's occuring you know Mitch Ryback and Florida was one of the first larger independent brokers that converted into eXp and at this point you myself and a number of other people at eXp are having conversations every week with independent brokers. Why do you think independent brokers have suddenly woken up and go I need to look at eXp realty. GENE: Well there's two things to me. Number one the Bricks and Mortar models the Bricks and Mortar model is dead Kevin. And when I say that if you are running a real estate brokerage especially independents it's hard to get over that 50 75 100 agents, right. You can't hit a level where you just stay there. I see so many of the firms and they think they're going to get to 500 agents or 400. They don't want to do franchises because they understand how hard that is and also pain that franchise fee off the top doesn't make sense to them and really 55% of our industry according to NAR I think at least 55 percent, over 50 percent is independent brokers. So they've struggled, they struggled they went through this last downturn you know 2006 to 2012. That was not fun. Now we've come out of it since 2012. But guess what? It still isn't where they are doubling or tripling in size. You know I met Mitch a year ago in Austin. He flew to see me in Austin. We spent some time together and you know he didn't own his company for 12 years. You know you own something for 12 years and it's you know you don't want to tell the agents that you're not making very much money. But it's a struggle. You know let's just think about it. Leases, furniture, phone systems and you know the independents. Kevin you and I have talked about this. Now they have to compete against the big franchises right. So the franchise rollout some big tech thing and they can't compete. They can't rule that out for all their agents. They don't have the money to do that. So it's very very restricted. We already got in January we got two small independents in Texas one with 40 agents in San Antonio just join us and one with 56 agents in McAllen in south south Texas near the border. That gentleman rolled his company in with 54 agents and we instantly became number two in the market boom! And I really think they're looking at 40 or 50 agents. Kevin you and I have talked about this. Now they can take those 40 or 50 agents and turn them into 100, 150 in their own little team through rev share, through revenue share. KEVIN: Well and one of the things that you and I have talked about and I want to make the point for anybody listening to this is even if you're an independent broker and you have some amount of expenses that can't just be x. In other words it costs you 30 40 50 60 thousand, a hundred thousand dollars a month. Do the due diligence people like Mitch and all these brokers don't necessarily make the expenses go away immediately but get with the right resources and gene you're certainly one of them that can help you do the due diligence because it's not a go no go. I have to make my expenses to zero to make it worth at eXp realty. There is a due diligence process and these independent brokers are figuring out that they can leave some amount of infrastructure in place and make the transition with their agents and then come out of it in 12, 18, 24 months. And like Mitch they've got a much bigger revenue share stream that exceeded what they were making as it had been a broker. GENE: Yes. And with that that was a perfect point to make. Kevin you and I've talked about it let's say that I think the one and MacCallum He had three offices he reduced the three offices down to one because he still had leases he was obligated to. But he got rid of a whole bunch of expenses and then you just gradually work into making sure that the agents get used to the cloud office. They're no longer going to come into the office they're going to go into our cloud office which by the way is the difference maker. The cloud office, we call it our cloud campus I call it a cloud office because that's where everybody is. That's where our accountants are. That's where our tech people are. That's where our onboarding people are. That's where our marketing people are. We have over 180 people right now in that cloud office, Kevin as avatars. And they speak to you just like I'm you know you just walk in and talk to them just like a video game. The cool part about it is when I saw that and when Glenn rolled that out to me I said Glenn I've always wanted to get rid of Bricks and Mortar as an owner. I mean there's not one owner in the nation that would love to get rid of that expense. Love to get rid of all that copiers everything. You name it. I ran it. I ran a couple of the largest offices for Keller Williams ever and those expenses just it's hard to cover those expenses and it just weighs on you even if you're making a little bit of money. Kevin you and I talked about it even if you make it a little bit of money. You're not making a lot of money and it just wears on you after a while. KEVIN: Yes. The message here if you're an independent broker is don't just discount conversion into eXp realty because maybe you've tried to talk to one of the big franchise systems and you couldn't make the numbers work. The independent brokers if they're running through due diligence with Mitch or with Gene Frederick or anybody else in the leadership are figuring out how to do this and understanding rev share and I want to talk about rev share for a minute before we talk about why mega agents and teams are joining. Rev share is something from my opinion. I want to get your concurrence on this Gene. When you were a regional owner you mentioned you owned Northern California and Hawaii. You got paid basically based on the agents in the region. Right it came off the top and you got paid out of the royalties and a franchise system but there was a stream of income that was very predictable. You knew if you had producing agents that would stay with the company. And every year you had x number of them you could predict pretty accurately how much revenue you'd have. Right? GENE: Correct and even in the downturn since the franchises they take money off the top we took money off the top. I was in two franchises. We knew the money off the top. We got that even in 2007 2008 2009 when we knew our owners of the offices were struggling. It was sad they weren't making money but as a region we got our money right off the top. KEVIN: And that for anybody out there you may have heard sort of the noise and information and sort of misdirection that revenue sharing is not sustainable from my opinion. I look at revenue share as exactly the way the franchises pay the regional owners. Do you agree? GENE: Exactly. When I talk to agents because they've never been owners of franchises Kevin like you and I have a ram franchises or ran offices they're just selling real estate. I said Let me explain to you this model would you rather have in your commissions money taken off the top and given to the owners are money coming off the top and given back to you the agents for helping us grow the company and they said was like the one where it comes back to me and I go. That's our system. We're just giving it to somebody different. I was really into this as somebody a couple of years ago and they said Gene you didn't change a sister you didn't change that part of it. You're just giving it back to someone else. Very very sustainable. We were sustainable at five hundred agents. You know now we just did a press release in the middle of February where over eight thousand agents just imagine Kevin could you imagine if you were running an office nationally with eight thousand agents with no bricks and mortar no cost. KEVIN: And that's why it's sustainable and profitable and for anybody listening to this. If you are under the misimpression that revenue sharing is sustainable there's a precedent for this and the franchise system don't let anybody confuse you that taking money off the top out of the revenue stream of the company dollar is not sustainable because the franchise systems take money off the top and they pay the original owners. eXp realty is doing the same thing. And so to tie down the independent broker conversation this is a big way that these independent brokers are figuring out as Gene said earlier to converting the eXp realty they can keep a lot of their systems in place. They can get all of the tools and technology of the eXp realty. They can provide a better environment from a technology standpoint for their agents and at the tail end of it you know if you listen to the interview with Mitch Riback he's making so much more money now than he was as an independent broker. If you're interested in the eXp. Get with the right members of the team do due diligence and understand why it is. Because as compared to things like profit share or other systems, the predictability of revenue share because it does come off of the top can be modeled. You can figure out exactly what your PNL is going to look like, what it looks like later. And as the revenue share grows it's predictable based on the number of agents and if you listen to Mitch's interview you'll see him say my spreadsheet was a big understatement for what I thought it was going to be. I'm actually making more money than I even model that I would do it. And that is why if you're scratching your head as an independent broker how would I ever do this. The piece that you're missing and you yourself if you're considering it to get in and dig in and understand how it works because it may not be apparent from the outside. GENE: And the two things brokers are concerned about Kevin we've talked about forever and I've been a broker of numerous franchises. You have to have a model that attracts people. First of all if they don't sell more real estate at your place than the other place they don't come. We've talked about this. Our technology is phenomenal. I mean Glen and Jason are just bonafide. We're going to have some of the best technology tools for people to get leads to the Internet. So everybody gets conversion for free, right? Sometimes I even get to the conversion part and they said wait it's free here because some of the small independents I talk to say well we do provide conversion for our agents but they have to pay for it. Are we you know 400 a month or 500 a month and I said what if all your agents came in got it free here and they go oh my gosh I can attract a lot more agents in my market and I go yeah we have that and also the second thing for brokers that they don't understand is once you let the agents in the game to help attract other agents they grow. Because most independents go I don't want my agents attracting people I want to track them make sure I do all the interviews and I go wow. Once you let the agents attract people the way they can their salespeople. Oh my gosh. And that's what Mitch told me Mitch didn't realize that his people could attract agents better faster quicker than he ever could because he's letting them into the ownership game. Kevin, like you and I talk about in the royalty game you know they're getting royalties off the top. Wait that's never been done that's never been done. That's why we're getting number one agent Louisiana. Darren James number one agent Tucson, Arizona. You know number one agent Richmond, Virginia I could name the town's number one agent Nashville. I won't name everybody's names I'm sorry but it's just like why are the top people why are they looking at us. And joining us in a week. 10 days from start to finish. Because it's a brand new model. You and I have talked about a lot of people come to me and they go well can you compare it to this company or the company that got started in the 70s the company that got started in the 80s and I go well they're franchise models and we just don't compare. I can't even compare it's a brand new. It is Netflix right. Just like Netflix and Blockbuster. You know I love using that example because blockbuster both watching movies right. We're both watching movies. But let me ask you a question Kevin. What was the technology that did away with Blockbuster? Streaming video. So when that technology, it's called a disruptive technology, you hear it all the time on Shark Tank. When you hear somebody go I've got a disruptive technology which means it's going to change the way we do something right. And your first to market with it the fact that you have a disruptive technology plus your first to market with it boom right. Wow! And that's why I compare it does everybody gets confused because a they said well you guys don't have any offices. See we do. We have offices. In fact you can go to any Regis we have a national arrangement. Kevin with Regis across the United States. So in every town there's always a five or 10 Regis's if you want to meet a customer in an office, meet him right there. But I think everybody gets confused with the fact that we have a game changer and when Glen Sanford saw he caught it early late 2009 is when he started the company says Gene. I just went to everybody and said no more bricks and mortar. He had three offices. He says I'm shutting everything down. I mean man, that takes a lot of gumption to do that in 2009. But he says I believe in this model that agents will go to our office. I can get to the office with my iPhone now. I can go in just straight to my iPhone. Of course I can get it on my computer and boom don't have to get dressed, don't have to drive to the office. It is the way real estate is going to be run from the broker's point of view. I think the next 10 years. KEVIN: It's certainly as you described earlier a disruptive model and I agree with you. I think if you get to 21 22 in terms of 20 21 22 most of the bricks and mortar operations will have to go away. Same way the blockbusters went away. So let's tie down the agents obviously productive agents are joining eXp realty. There is no take away from the standpoint of the economic model right in other words people aren't joining hoping to do better. We talked a little bit a minute ago about tools and technology but from an economic model it's not a take away for an agent to join eXp is it. GENE: Oh my gosh no. We have the same cap for every single agent in the company. I love it. Everybody's on an 80 20 with no royalty, no royalties a biggie. So once they pay 20% and an equal sixteen thousand dollars. Kevin That's our cap. And then they go to 100%. So it's kind of neat. We're getting people that do over a hundred million a year, 100 million in production with big teams and they said what's the structure and I said well it's one camp 16000. You can go to as many cities as you want in your state. You can go across state lines and have agents in other states and they go what you mean I don't have to pay another cap in those cities are in that state. I go no because we don't have franchises. We haven't sold franchises in those cities like the other ones. So a lot of the other models we compare for the large large teams love the fact number one that they can expand their team only pay one cap for the lead agent and the other agents are a half cap. All right. And then here's the second thing that we're noticing Le Page and Johnson from Charlotte, North Carolina. They joined us last spring and she said Jane they brought over 16 agents with them they do over 100 million a year. And she said Gene what I realize now after being with the eXp for three or four months is I knew it would be beneficial for my team because I care about my team members but they love it more than I do. And I said What do you mean? They go. She goes oh my gosh they get all the benefits I do. So they can take for example on the stock they can take 5% of their commissions every month. The team members can as well as anybody and purchase stock every single month at a 20% discount. I mean they're creating equity in their lives. So they're team members are being able to create equity. They're team members are being able to help attract. We call referrer agents as they're doing transactions and now they're team members are getting revenue share stock and she told me she was I've never had a happier team members in my life because their teams just like brokers because the big teams Kevin are like small brokers right. They're concerned with how to attract agents to my team and how do I retain them. It's all about retention. And they said we're not losing anybody now because they're aquiring stock. They're acquiring revenue share and they're happy again. I can't believe I've got Brett Gove. I talked to a year ago year and three or four months ago I think is one of the top agents in Northern California. I talked to him on Thursday. He came and talked to Glen and Jason at our national convention. It just happened to be at that time he signed up the next Friday. Kevin I'm talking. One of the top agents in the nation joins in eight days. It's a compelling value proposition for sure. And he came to the convention I love it because all these top people come to the convention by the way we have two conventions a year, one in April which is our stockholders meeting every year. We believe in getting together and networking. And then of course we have one in October which is our national convention. Same thing. Great networking and learning things. But what's funny is when they came to these he brought two people with him. I love telling Brent's story because Gene I brought two people with me and I told him OK talk me out of this. Talk to everybody and find out what's wrong with this model. Of course he comes back and on Friday He's about ready to leave and he talks to those two gentlemen they were standing right next to me he said what did you find out in he. Man this model is real. This is working and he goes OK I'm in. KEVIN: What's interesting about that is you and I were both team leaders and we recruited a lot of agents in our day and the franchise system. It's unheard of to have teams and mega agents convert in that quick period of time and I think it's a testament to the value proposition and the fact that between revenue share and the ability to buy stock and earn stock based on the way EXP lays it out. What are your thoughts on the noise in the market about revenue sharing. Obviously we've got enough experience with it now and I interviewed Mitch a number of other people and as you mentioned people that are teams it's a huge retention item for mega agents and especially mega agents with teams because unless they're going to set up some sort of profit share and 401 K for their team members they don't have the ability to do anything close to this in terms of creating wealth. GENE: Well the same with small brokers. When I say small brokers any broker that has 50 agents or 100 agents or 200 agents, as big as a broker can get there really running their team. They don't want people to leave right. So I was talking to a broker just the other day and he says Gene the hardest thing is I train them, coach them. They stay with me for a couple of years and then they leave. Right when they're getting ready to be really really productive. And I said well you want to solve that. And he goes what. And I said get him into our system. It will retain them when they get stock. They want to see that stock go up. They have ownership in it because you've never give them ownership. So the same thing with the teams the small brokers what they're beginning to realize that I knew it would happen Kevin. I knew it three years ago. But now it's starting to happen. Even though they're doing OK. Right. We haven't had another shift yet in our market really nationally. But the brokers are going. You mean I can turn 50 agents into a hundred. I said Let me show you what Mitch Ribak did. Let me show you the small you know they're just getting it. They're getting it. And all of a sudden they're going Wow!!. And of course as a broker if you're tired of running that doggone office you're not the broker anymore. Right? That's a big thing. Our states are all run by a broker. We have supervisory brokers because in big states like Texas where we have close to 2000 agents we have a head broker and four supervisory brokers. So we have a lot of brokers to take care of that and they go, oh you mean I don't have to answer the broker questions. I said No I'll go to the broker. Just bring the agents let them run and let them produce. KEVIN: Absolutely. So if you're listening to this it doesn't matter if you're an independent broker or a mega agent or a team in a team lead you can go to the show notes and there's an intro video it's like seven minutes long you can get all the sort of facts and information that Gene and I are talking about. And then you really want to dig in and get due diligence. You know whoever introduced you to eXp realty can introduce you to whomever you know whether it's Gene or me or any of the other leaders around the country that can help you get the right information to make a good decision. Doesn't matter if you're a broker a mega agent or otherwise. If you're scratching your head as to why people are joining. That's the first step. Watch that intro video that's in the show notes and then go back to whomever introduced you to eXp Realty and say all right I'm intrigued enough. I want to dig into it and then they'll get you pointed in the right direction to get connected. Gene any final thoughts on that I want to get your contact info in case anybody wants to reach you. GENE: The only final thought I would say is I want to say something to everybody out there especially where we are not. First the market is everything. When you look at all the marketing books and I'm a, you know I graduated with a business degree and all the marketing books I've got an old marketing book and the number one thing in marketing is being first to market. That's why I have an iPhone. That's why a lot of us love Pandora. This is why you know what I look at first to market with anything, Netflix, Air BnB. When I see first to market even Uber right. When I see first the market, people don't really understand how huge that is to be first in your market to bring eXp to your area. You know we have the tools to show you how to explain the model. Kevin and I want to share them with everybody. And the fact is if are first to market I don't want you to wait two years, three years and say I'm just going to wait to see if it's going to work. It is working. It's working nationally right now. So get on board. I can't wait to work with everybody. I just don't want people to go well you know I'll just wait and see if they make it. Come on now. Just don't wait. KEVIN: Absolutely. I've had that same conversation with people were there like well I see a few agents in my market. I'm a mega agent and I've got a team I do 20 30 million dollars a year and you know I don't see the people that I mastermind with are my peers. That's not typical when Gene joined eXp in Texas he just mentioned there's 2000 agents are very close to him right now. I think there were five agents in the state and a few major decision like a mega agent would if they made a mistake they wouldn't even recognize what happened in Texas. GENE: Yes correct. And so that's what I always say to folks get rid of that fear. It's not really a fear at all. We're selling real estate just like you would anywhere else. If it doesn't work out you can always go back to your other company right. But but I can tell you once you come into our system and see the tools and the people because we're all made of people and the people just like you that you can mastermind with nationwide through the cloud collaborate so easily because I'm telling you right now. Kevin you know as well as I do there's a few people in my world that I talk to two and a half years ago. They are just now joining now. I said well it was available to you two and a half years ago and they go well I'm starting now. I'm going now and I go good. But if you're in a town where we're not even in yet, guys we can open immediately. We do not need bricks and mortar. We just need good quality agents. We talk about it all the time in our attraction. It's quality not quantity. We want quality agents so come join the explosion as we call it the eXp explosion. And it really is happening and I can't wait to work with everybody. KEVIN: Fantastic. Gene if somebody is listening to this and they want to reach you how do they get in touch with you. GENE: The best way to reach me guys if you want to is texting. Please do not e-mail me. You can. Really pretty much find me. I'm in Austin Texas. My name is Gene Frederick but my cell number and I'll give it to you so you can text me or private message me on Facebook you can private message me on Facebook of course just Gene Frederick is on my Facebook account but 703 3381 515 is my cell number 703 3381 515. Just text me. I really respond fast. I can't wait to work with all of you. KEVIN: Fantastic. Thanks for coming on the show. GENE: Thanks Kev. Take care.

Interview – Mitch Ribak In today's episode we have Mitch Ribak. As a chronic entrepreneur, Mitch has been self-employed since the age of 19. He started the first online dating website, owned an ad agency and a marketing company as well as flower businesses and restaurants. After losing the online dating company, Mitch found himself drawn to real estate and started a brokerage in 2005. In this episode, Mitch details his experience as an independent broker, how he found himself transitioning to eXp Realty and the growth he has experienced. Learn More about eXp Realty - Click here to watch a quick 7 Minute Intro Video. Disclaimer: 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 Transitioning to eXp Benefits of eXp model The growth ability at eXp Resources within eXp Realty The benefits of not having to recreate the wheel Rollout – how to present to key agents Tools and technology Revenue share income Deciding if eXp makes sense 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 Mitch to inquire or ask questions. Contact Mitch via email at mitch@tropicalrealtyhomes.com Contact Mitch via phone at 321-258-4150 Noteworthy "It doesn't always work but I can tell you that when it's executed correctly you're going to see that the back end of this coming out is a huge opportunity." "This is a game changer in the residential brokerage business that is not always as apparent from the outside."

Interview - Brian Culhane In this episode we have Brian Culhane, originally from Chicago. Brian sold commercial real estate advertising prior to transitioning into realty. Eventually he found himself stepping out and starting a brokerage and then ultimately joining eXp. This episode covers the formation of eXp Realty, what the decisions were in terms of setting up a cloud realty platform, how eXp has grown and what you see with eXp Realty today. Learn More about eXp Realty - Click here to watch a quick 7 Minute Intro Video. Disclaimer: 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 Where the term eXp comes from History of eXp Physical location vs Cloud opportunities Recruiting Culture at eXp Realty 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 Brian to inquire or ask questions. Contact Brian via email at Brian@exprealty.com Noteworthy "Everything, lead generation, oriented production based, it's all designed to make the agent team and producer highly efficient highly productive and profitable." "It all stems from that philosophy. It's this idea of we're in this together we're collaborating together we're sharing each success." "I think you'll come to the realization that there's no better opportunity to get you and your family ahead than the eXp opportunity."

Interview – Robert Creamer & Les McDaniel On today's Episode we have Robert Creamer and Les McDaniel. Robert graduated with a degree in Real Estate from the University of North Texas. He then joined Eddie Holiday in Dallas to start their commercial arm. Shortly thereafter he joined Keller Williams when realizing they were forming a bigger division prior to starting the CMO commercial group in 2011. This episode covers how Robert and Les reached 90 million in volume and paid out 150,000 dollars last year in referral dollars to residential Realtors, why they chose eXp Realty and how they are experiencing exponential growth. 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 Process of transitioning to eXp Realty The Texas market Residential referrals at eXp A look at the cloud environment Why the eXp system is set up for collaboration Where is the future going? The company culture at eXp Realty 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 one of the contacts below to inquire or ask questions. Contact Robert via email at creamer@cmocre.com Contact Robert via phone at 214-564-8909 Contact Les via email at les@cmocre.com Contact Les via phone at 512- 963-2973 Noteworthy "The global environment, the ability to reach out to everybody, where have meetings in the cloud where we see the environment of real estate going and then the revenue share on top of that was a no brainer." "On the year that we had the largest commercial sale in history, and the second largest transaction in KW history we decided to make the move on top of the fact that since we were managing and helping lead a division we did have a sweetheart deal which was even more shocking to a lot of people." PODCAST TRANSCRIPTION Kevin: Welcome to the show Robert and Les. Robert: Hows it going. Less: How's it going. Kevin: It's going excellent. I've been looking forward to this conversation now for some of the listeners on the podcast that may not be familiar with you. I don't know who wants to go first but why don't you guys give me a little bit of the background on CMO and how you guys have been involved in the commercial real estate side of things. Robert: Well sure I'll go this is Robert Creamer got my degree in real estate from the University of North Texas in 2005. Jumped in with Eddie Holiday in Dallas to start their commercial arm. Learned that KW is forming bigger division. Jumped over in August of 2007 was there until end of last year. We formed the CMO commercial group in 2011. As my career progressed we reached up to 90 million in volume. We paid out 150,000 dollars last year in referral dollars to residential realtors which we are extremely proud of because that is our niche. Residential realtors we want them to be our partners in our business and that's pretty awesome we think. We have grown our team from 3 to 9 commercial associates. We have a huge track for growth right now and we have a lot of really awesome things that are really been official and we're super excited. Kevin: So if you look at that history and obviously you've got very very successful large commercial practice and you get referrals fed in. And you mentioned you get referral business out of the residential side of the house and you're at Keller Williams. How did you go from having a rapidly growing business and I know just for reference for anybody listening. You also had a very large transaction in the Keller Williams system, I think it was if not the largest one of the largest ever second largest highly successful business. You guys are humming along. Walk me through how you take a big team like that and you decide when you're an integral part of the Keller Williams commercial side of things to come over the eXp Realty. What was the process there? Robert: You know our team was doing phenomenal things at KW commercial and we heard about eXp. We were investigating it and we really wanted to bet the company because we didn't want to make a bad business decision and bring a lot of people with us right. On the year that we had the largest commercial sale in history, and the second largest transaction in KW history we decided to make the move on top of the fact that since we were managing and helping lead a division we did have a sweetheart deal which was even more shocking to a lot of people. We had a sweetheart deal the largest sales still left. So a lot of things happened. But let's talk for a minute. Less: There's another piece of this that is.. I'm not upset about or we're not upset about it but the reality is that KW is so big. You know the recognition that we need to continue to grow our business and sustain it wasn't something that was going to be happening at a large level, at the greater KW level. You know. We were trying to build a business based upon referrals which is what we've been... I was told from day one coming into commercial real estate was good residential referrals and we didn't have the support structure in place with them to actually provide that. And so that move, it made a lot of sense. When we were actually talking to the CEO and the president of eXp. We have their attention that they want to be family that they want to be available and so that was really attractive to us and we knew for a fact that with 8000 member strong company that we can get in there and we can become family with 8000 rather than trying to pick out and target 150000 or 40000 whatever agents and maybe get a few and do a good job at it. We're coming in and we're at the beginning of this as the commercial guys that have a lot of opportunity with 8000 agents and I can't imagine anyone who wouldn't want to be able to do that. And I believe that's how we're going to become the largest commercial and residential real estate company in the world is through referrals so that's kind of where we are at. Kevin: That's an interesting point because I think that for people listening there's nothing wrong with Keller Williams and I have a long history with Keller Williams and they're a great company. But what people in the industry fail to understand because Keller Williams is a large franchise system, Remax is a franchise system. There's everything prior to eXp was all franchise oriented. And so what ends up happening we going to dissect Texas for a minute. Right you have a presence in Dallas you have a presence in Austin in different markets and even within those markets there's different market centers and each one is almost like its own little island right. So if we translate that into eXp Realty and I'm doing this for listener purposes, the ability. We'll just talk about residential referrals for agents to collaborate mastermind and share in the cloud the way eXp is set up is much more dynamic, it's much more fruitful and it is happening a lot more continuously. In other words you can go into the cloud environment the eXp world and you would be able to interact with this larger volume of agents. Now if I take that in the franchise system, even though you guys were successful and you talked about paying out that large volume of referrals and Keller Williams system, I would imagine a big part of the calculus is when you looked in there and looked under the hood the system is set up for collaboration because we don't have islands that are market centers or offices. I've got to imagine that was a big part of what you guys figured out pretty quickly. Less: Oh it's huge. I also have to say that the first day that we joined we were introduced in the virtual world but it was still impressively powerful to 350 agents that were there. We've never had an audience of 350 agents where we get to talk about commercial real estate at KW. And it's not their fault, it's just that they can't there's not that system set up yet but this support to where that area where we have our meetings can truly become larger and larger and larger and we can still have that platform and others can have that platform. And it's across the nation. So it's a huge benefit to have that globalized society if you were no longer seeing the boundaries of states and all that and being able to collaborate with others basically feels like are in the same room they are, virtual. Kevin: Absolutely. So if you look at your previous operation and you're in multiple markets in Texas I think that certainly there'll be plenty of eXp agents and agents from outside that maybe are in a franchise. Your model is to operate multistate. So if somebody is listening to this and their adn EXP agent for example and they have a potential commercial transaction we'll get your contact information in here before we wrap up. But you guys are available to take a look at potential commercial referrals not just a market like Austin or Dallas. You're looking at operating in a larger environment. Robert: Oh absolutely. We loved our experience at KW. We had nothing but good things to say. We grew the team we had a lot of opportunity there. We loved it. One thing we saw was the future where is the future going. Do we need this office space? How can we really grow at an exponential volume and reach people because everything is going online. The business model is going global. So how can we reach agents in every state easily, efficiently and really help more and more people because the more people we can help it's just going to be awesome our business will grow. Their's will grow. We're I mean the whole real estate environment is going to change over the next three to five years. It's already changing. Kevin: Well absolutely and I'm glad you touched on the bricks and mortar attacks back because I know that you know in some of the meetings we've been in together that's a big part of the discussion. In other words in a franchise system, they are all oriented around physical locations even though you go to those market centers or those offices and there's not a lot of agents there. So it's sort of like a dichotomy right you've got this gigantic office in some cases in the franchise system you just came from. But yet. If you compare it to the overall agent count there's not a lot of agents there. It's more transient right. They come and go. Now in your world I know you're potentially going to have some physical Prem for the team and be able to have some aspects of that. Seems like the cloud environment allows you a much bigger reach. Less: Oh absolutely. I mean it's kind of one of those elements for me that kind of cracks me up about how the agentcentric concept is being pushed by so many of these franchise models with bricks and mortar and I can't think of anything that says your agents are number one more than when you're giving away ownership. And when you're giving away a benefit of paying them off the top for people that they bring in that are great you know real estate agents and not just any agent but top producing agents that are flocking over there right now. In my mind I look at that and go "How can anyone say that they're really truly agent centric when right now it's almost impossible for anyone coming in at the later stages to see much of a margin from profitability". To me this is just such a great model and it's one that really says you guys are important and we want you to be the owners, we want you to be the ones who direct the company and they're listening they're moving as quickly as possible to answer any questions we have and the availability is great because of the world Kevin: You guys have a unique perspective on this. Those of us that come out of the franchise system and I certainly used to not only understand it at a high level but taught market center financials. I mean when you've got a plug in Team Leader and administrative staff and actual and this is your world the physical space that could accommodate a large volume of agents your PNL is already heavily laden with expenses that in a model like eXp realty you just don't have. So as Agent shareholders in a business I'm sure it was really apparent from a PNL standpoint that this economic model for lack of a better analogy runs circles around the one where I've got to pay for space and people just to keep the lights on. Less: Oh yeah I think Robert talked about your experience as a managing director and recruiting you did. And ultimately what you get paid from that was not much in terms of your recruiting efforts. Small check one time you were so proud of. Robert: The idea of profit sharing is phenomenal. It's the companies giving back. You want to help them grow because you're excited the company gets excited everyone is making money together right whatever. We train and they produce we produce together. But we found the reality is you had to have a huge number of people in your downline to actually see an impact. I understand the tree concept where you get your first couple levels or you go deep there and those that go deeper you go wide there and they go deeper you later. But even then you need quite a considerable amount of agents to make an impact on your well-being, your life, your retirement. Where this model, because expense side is diminished so much they have the capability to pay at a much higher level and off the top that was icing on the cake. The global environment, the ability to reach out to everybody, where have meetings in the cloud where we see the environment of real estate going and then the revenue share on top of that was a no brainer. We really see some huge potential in our little over 8000 agents. Right now we are pretty sure we'll be over 20000 into the year. I mean this is happening. It's really exciting. We're super excited our team is excited. We cannot wait to see where we are in five years. Kevin: Yeah it's a game changer and that's the fun part on this, there's a lot of misinformation in the marketplace about revenue share not being sustainable, you can't pay money off the top. And what I always tell people and this will be no surprise to the two of you because you've heard me say this is for anybody that thinks that what you should probably ask if you're in a franchise system is how do the regional owners or owners of the company get paid. And they typically get paid off the top. It's either royalty and or company dollar and royalty and they get paid on Agent count. And so if you actually look at the model and the economics, this is 100% identical to how in a franchise system I'll just take Keller Williams because that's where I came from most recently, they pay the regional owners. So in other words if you own North Texas and you own all of those market centers, you're getting paid on the agent account off the top. Just like the equivalent of revenue share. Don't let anybody confuse you with the fact that this is sort of an unproven uncharted territory. This is exactly how the franchise systems pay the regional owners in the way that they can do it. What's viable is what Les and Robert just talked about where you look at the profit loss and not having staffing and the physical premises you have to pay for the economic model makes it that much more viable. I too like you guys am fully vested in the Keller Williams profit. I still get checks. I still am in the system so I get it, right? I've been on both sides of the fence. I would always challenge people that if I had my choice I would always want to be a regional owner instead of relying on profit share. You can make money in both but the regional owners are the ones that make the big money. Less: In the initial stages, even the owner of Keller Williams I just know Keller Williams well like you because I was there 10 years right. So we got to see a lot of growth and lot of exciting things but one of the things they said and I know is when you franchise it's because you don't have the capital to expand as much as you want. So you bring in other investors in your franchise. It's easier, you can grow faster. The problem is you give of ownership. Gary Keller himself said if I could do it all over again I'd create the largest real estate company in the world or the largest real estate team in the world. So he's actually said that. The other thing he did overseas which he altered from profit share was a revenue share model overseas where he went from 6 percent to 8 percent and never capped it which is pretty phenomenal considering we're here now in 2018 with a non franchise model and a revenue share model. Kevin: It is an interesting thing you know as they learn and they did things you know I think if it was back in the 90's Gary would do it completely differently. So I want to talk about your team for a minute. You mentioned something and I want to tie it down for listeners because we've had plenty of guests on the podcast talk about this from a retention standpoint because certainly revenue share will be a benefit for you Robert and you Less but you also have team members. You said everybody's pretty excited and I want for people listening to this whether they're in the commercial space or the residential to be thinking about this. What was your thought on that from a retention standpoint in other words revenue share for team members. Less: That's probably one of the driving factors for me is that in my mind it would be irresponsible not to give them the opportunity to be at the top of this company, to be somebody who can bring people in and be leaders because they all want to be leaders at some level. We don't have anybody on our team just like Hey I just want to make a living. I mean everybody is driven to seed and this provides to me a more organic means of leadership growth where a mistake can't be made of a leader that is placed in a position through any other way than hard work and proving themselves because they're either going to be a leader or they're not. Based upon what they're doing and my team can see that they already see the leadership that's in the company they see what's happening in the company with people who joined earlier and are showing up to help recruit in helping us to build our business. That's what leadership's about. And it creates this camaraderie that we don't have competition among market centers. It's a camaraderie that says we're all working together to see if we can't get this thing be giant. My team sees it and it creates that momentum for us when we're together just to continually put that vision in front of them. Let's go Big let's make this about the relationships we have and build upon those. For me it's a no brainer and it's an irresponsibility factor on my end, not only from my family to not do it but also for my team. That's huge. And anybody who won't listen to and I'll just be frank anybody who won't listen to the presentation and considered as a possibility is irresponsible, straight up irresponsible. Kevin: And I would tend to agree with that. And for anybody listening I mean the challenge with teams and this is not residential or commercial issue is just a team issue in the franchise system is retention. You'd spend a tremendous amount of time recruiting, building teams. You pour a lot of energy into training and getting people productive and that if you go into these mastermind meetings and I know you guys have been in there you know whether it's led by Gary at the top 100 or it's led by somebody else, you get these rainmakers that own these teams saying my toughest thing is keeping people on the roster, not getting them to do their own thing. Well in the eXp realty model, I want to get you guys perspective on this. Not only can they get revenue share but if everybody's a shareholder, we're all pointed in the same direction. It's a huge retention tool as well. But I also like the fact that you mentioned culturally whether people are in somebody's revenue share group or not everybody shows up to assist. It's an interesting culture. I mean I've seen people in the cloud or in the workplace environment go in and post they need help literally within 15 60 minutes they've got somebody somewhere else in eXp that has nothing to gain other them culture for the company, raise their hand and say I know how to fix this, let's get on the phone and me walk you through it. Could be allegiances them. It could be something they need to do to make their business work better. It is coming out of a franchise system it is one of the most surprising but pleasing things that I saw in there and I know you guys see the same thing. Less: Oh sure. We have a great example that is leading the way for us and that's Gene having Gene Frederick be the guy who is... I mean he hasn't even gone as wide as he could in this world. Some people get that. What he is doing is is he's helping everybody else build their downline. He's just saying hey if you need help, call me and the guy is busy helping other people more than he's even helping himself right now and it's paying off. That's all we're doing for our team. And I think when we create that value for our team they want to be around because they know that we're going to go and talk with people on their behalf. We're going to help them build that side of their business and we'll do whatever it takes to do that. I mean that's another leverage point that for keeping people around that it's hard to argue with when you are helping when you're literally actively helping your people grow that part of their business that creates that family that creates that bond that it's just special. Kevin: I'm glad you stated that way Les because I think the one thing I've observed is for people that are over either as an independent. It doesn't matter residential or commercial or they're in a franchise system that's not very readily apparent because even a franchise system is very culturally oriented right. They talk a lot about it. It's just not executed in practicality the same way it is at eXp realty. You have to experience it. You can hear and you're not the only one on a podcast interview that talked about this and everybody being pointed in the same direction and helping and people going out of their way to make sure everybody succeeds. But having experienced that there are plenty of great people in franchise systems including the one that I just came from. But you look at it as an overall organization, the level of collaboration and culture is amazing and Gene's a perfect example of that. But there's plenty of other it's like for example our conversation about podcasting. You guys raised her hand and said hey we want to do one too about what we do in our commercial world. And I'm like sure I'll be happy to help you. And that's just an example of how we would collaborate. But even on the real estate side whether somebody wants to learn best practices on how to help attract people for revenue share or they want to learn about commercial real estate. Let's say that they're looking to grow what they're doing and they know commercial people in their part of the world. That's where you guys were raise your hand and go hey let me tell you how to attract the right agent to come in because it's realty is going to have a big commercial practice much like what you were involved with Robert as what you built over at KW. I mean I imagine and I want to give you a shot to talk about this for a minute. If somebody is listening to this and they're either know a commercial party that either has a team or they're a producer or they are one and they want to find out more. You're the guy to talk to you. Any other specific thoughts or stuff you want. That I maybe didn't bring up and then I want to get your contact information so if somebody is an agent at eXp and they want to get a hold of you with a potential commercial opportunity or somebody maybe as a commercial broker or a team either themselves or maybe then again there's an eXp agent that wants to refer you somebody that potentially could come over and bring their practice over. How did they get a hold of you? Robert: Well I'll talk about the commercial first because we really want to be commercial point of contact we really want to help the commercial agents at eXp grow in the right way because we found that our previous company there wasn't enough collaboration. People weren't running in the same direction. We kind of separated ourselves by what we were doing. We'd like to create here as we're going to create a 10 12 step module on how to become a commercial realtor. How does it succeed in commercial real estate. How do you gain confidence how to get referrals from residential agents. All of those tools we want to provide because we truly feel that the cloud environment is so beneficial to a commercial agent. So anyone out there has any questions on commercial real estate. Please reach out to us. We'll show you why going and talking to people who are already talking to everybody about real estate right. They're your easiest target. That's what you need to be talking to. Give us a call. We'll help train you. Shoot us an email. It's either creamer CREAMER or LES les at cmocre.com is our e-mails and our number... Less: Mine is 512 963 2973 and texting is definitely the best way to get a hold to me. Robert: And mine is 214 564 8909 and usually we cover central Texas. We are looking for talented commercial agents to expand into the rest of the country. So if you do have questions we'd love to hear from you. Less: Yeah absolutely. Kevin: Excellent. Well guys I'm sure we'll have you back on again. Any final thoughts before we wrap up today. Less: At the end of day for me this is something that is just exciting. I got to tell one story about Gene this past weekend we had a team meeting up in Dallas. He came up and did a live presentation to someone who had not heard a presentation before. It was that kind of thing that I think people don't realize it's special and we were texting with the CEOs and I'm not saying that's going to be forever thing. But right now family is family and it is really tight knit and I'm excited about really kind of breaking down some of the BS that's out there being said about what this company is in order to really show what a family looks like. That's exciting and I appreciate you letting us have the opportunity to share that from a commercial perspective. Who knows what the future holds with regard to how our company plays out here. But I think it's going to be big. Kevin: Absolutely. Thanks for coming on the show guys. Less: Absolutely. Hey thanks man.