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AJ Hazzi goes unfiltered with the plays that built a #1 independent brokerage, a $1B+ PM portfolio, and the highest-performing agents. Expect battle-tested tactics, tales from the trenches, and raw convos with top operators. No gurus. Just the truth that grows your pipeline, team, and net worth.
00:00
All right, welcome back to AJ Unfiltered. I have an awesome guest for you guys today, a real treat. I am going to be rolling with Mr. Nick McClain, someone who has been in my orbit. I've been networking with Nick for probably about a dozen years now, and he's in a market actually just south of us. He is in northwestern Washington in Wenatchee and surrounding area. He has absolutely dominated this area, has a team that does a couple hundred million dollars a year in volume. hundreds and hundreds of transactions. But his story goes beyond that. He has recently been involved in a really exciting operation that's scaled and exited and has now got a really cool new platform, a brokerage platform he's going to tell us a little bit about too. And we're going to talk about the trials and tribs of the real estate industry, where we think it's going and everything in between. So without further ado, welcome to the show, Mr. Nick McLean.
00:52
Thanks, AG. It's awesome to be here. Yeah. We're so close. Right? You know, Kelowna.
00:58
Kelowna, Penticton, just north of 97 and the Columbia River. Probably people don't know that, but it's probably four hours away. Yeah, we really should see each other more often.
01:11
Not just in Palm Beach and New York or San Diego when we go.
01:16
Yeah, we just saw each other. People don't know this. We just saw each other in West Palm Beach, Florida at a mastermind and knew we needed to get on this podcast and talk about the real estate industry.
01:26
Yeah. Well, you gave an amazing talk at that event, and then it clicked that I'm like, I know Nick would have a lot of really cool nuggets to share with my audience, and I wanted to get you on here right away and do that. So I'm stoked we were able to pull it together. So let's talk a little bit about where you came from. So you were in aviation prior to getting into real estate, and you've used that metaphor, which I think a lot of people wouldn't think there's a lot of similarities or continuity between your earlier training and your career, but you've managed to use a lot of what you learned in that space and applied it to real estate and been really successful with it.
02:04
Yeah, I really did. Well, what I thought was going to happen when I got my license was I was going to find a broker and the broker would put me through their onboarding and training protocol to become a real estate professional and broker agent to sell real estate. I thought there was a playbook. I thought there was a checklist. Because in aviation, everything is done. It's already been established. If you want to become a commercial airline pilot, there is a roadmap for you. There are rankings. There are certifications. There are type ratings. There are hours and requirements laid out for you by the government, but also by the airline you work for. So if you have discipline and you can follow instructions... and you can do it at proficiency level, you can get really far really quickly. So I'm like, okay, I'll jump into real estate. No one's going to outwork me. No one's going to outstudy me.
02:58
No one's going to have more procedural discipline than me. I'm going to crush this.
03:04
And I show up day one. He's like, pull up a seat.
03:10
Yeah, and I think everyone had the same realization when they got into real estate. It's like, pull up a seat. And you're like, okay, now what? And you just twiddle your thumb.
03:19
Yeah, swivel your thumbs or watch what I do, the tribal training thing. So I just knew almost from day one, AJ, that this is not okay.
03:31
I'm going to build a brokerage. I don't know when, but probably as soon as I can, according to the regulations, and I'm going to have a training. Like I knew from day one, I'm going to train my agents from day one.
03:45
And I didn't realize that's so revolutionary in our industry. For sure.
03:51
Then you look around and you see Keller Williams and Keller Williams University and publications. They were starting to solve for that and figure that out. Then again, it was like bold training and ignite.
04:07
Can you karate chop a board? and overcome your minds. It was my big mindset back then because we were getting our heads pounded. We were getting our heads pounded in. So it was a lot of mindset. Well, that's important, especially the time when you got in the business right after the financial crisis. That was, you know, a mental fortitude exercise really in getting into the market at that time, which is not dissimilar to anybody starting now. It's a grind at the moment. But that was, I think you're right. That was the main focus of most of the training was mindset. But you coming from a space where there was a checklist for everything and you're going, there is a real lack of granularity here in terms of what we're supposed to be doing. And you filled that gap.
04:44
So when did you start your own shop? Started my own shop in 2012. Nice. 2012, you know, I think around 2011, I sold 62 homes, thankfully, because I worked for banks.
05:01
Doing the REO stuff. You know, I do in the REO stuff. And I got into the REO business because I was broke, and my broker was like, well, if you want to make money, you can do these broker price opinions, they call them. I don't know if they call them that in Canada. And they would pay me $40 to do a broker price opinion on homes. So I started doing 100 of those a month.
05:24
I probably spent half that money on gas just to do the drive-by.
05:29
But what happened was I started seeing trends. Because these were like not foreclosures, but ones that were in major defaults, 90, 180, 83.
05:39
So I would know about things a year before other people. And so then I started calling investors. Like, hey, I know about 212 Nixon. I know about this. I know about this. Oh my gosh, this guy has the inside pulse. I want to work with him.
05:57
And so then I started getting, and then you get the listings, and then I would just crush the investor list. side of the business. So that's interesting. Both of us kind of in that same timeline found our way in the investor niche, which when there's blood in the street, those are the people who have got their checkbooks out. So it's not that brilliant that we arrived at that. But it's interesting that we both built our brokerage and our
06:20
reputation on that. And I was similarly doing a lot of foreclosure stuff. We don't have pre-foreclosure data here and we don't have the same process as in the US, but we were definitely working with a lot of investors and buying things from the courthouse.
06:33
Yeah. And then fast forward, you and I invest, right? Because then you learn from your clients.
06:40
I'll talk about as a real estate coaching consultant and doing consulting, sometimes I would have clients that I'm coaching that I feel like I should be paying them versus them paying me. 95% of the time, I earn every penny of it, but then 5% of the clients are innovating and charging hard and coming up with new strategies, and then you take what they're doing and you give it to somebody else, and then they pay you for it. So the early days, those investors, theoretically, I should owe them some money for my investments. I've got some similar thoughts, but while you were saying that, there was one sort of contrary to that point.
07:17
really, really sharp guy. But he was in his early 70s. He'd kind of seen everything. And this is in 2010, 11, maybe 2009. Anyways, I had this idea to come down to Arizona because we had a par dollar. And after the financial crisis, it was 20 or 30 cents on the dollar to buy the stuff, especially in Scottsdale and surrounding area.
07:37
And so I told him my plan. And this is a person that I respected a lot. He was a great investor. He owned many apartment buildings and had done a great job, like multi, multi-millionaire.
07:46
And what he told me at that time, he said, do not do this. He goes, I promise you, if you go down there and you invest in the United States, he's like, you will lose your ass. And he said, the population or the next generation doesn't have it in them to pull themselves out of this gutter that they're in. They're not the country they were before. They don't have the generation they're talking about is us, by the way, the older millennials. They're saying, these millennials, they're not going to be able to right this ship. This financial crisis is the end of the banking system in the United States. They're going to lose their global hegemony and do not go down there and invest. And he had me shook for a bit there. And I'm really just glad that I did not listen to him. It was not one of those cases where I owed him for the advice. In fact, I'm really thankful that I did my own And it came up with my own conclusion and did go down and buy some real estate because we did extremely well on that.
08:40
And anybody who bought real estate 2010, 11 and has held it for any period of time has been extremely well.
08:47
So yeah, it goes both ways. You can get some bad advice from your clients too, I guess is my point. Yeah. You know, the early housing recession, I, it took me about four years to get out of the mindset that it was going to crash again because it just crashed. I assumed it was going to crash again.
09:05
And I was always waiting for that next crash. And a lot of my investors were waiting for that next crash because they wanted it to crash. And so they were just really projecting what they want, not what was going to happen. And then finally, I came to the realization in Washington State and Oregon and California that the regulations are restricting people. the building of homes. Builders weren't building anymore and regulations weren't allowing it, weren't making it any easier. Environmental regulations, energy codes, zoning. And so I said, I'm buying every home I can afford and I'm holding on to it and I will buy every one and I haven't stopped yet. And at some point, oh, the bubble is going to get me. But I just went into this like, I'm not... I went into this Warren Buffett, never bet against America.
10:00
So the opposite of what that guy was saying, I went into this Warren Buffett, never bet against America.
10:06
And I was right. And I've been right. And I might be wrong at some point. But the other thing is they'll just print more money. And when they print more money, my value goes up. That's the way it works. It's our hedge. But back to my brokerage. So let's get back to real estate because I think I want to chop it up with you on the industry. I opened up my own brokerage in Washington State in 2012.
10:27
I actually went to my broker out of loyalty and said, hey, let's do this together.
10:32
You ever just want to bring someone along with you? Like, hey, no, you're thinking too small. Come on, I'll make it bigger. And maybe I was looking for that mentor, that father figure that I never had. And it's like, hey, I'll come along with you.
10:44
And he didn't want to do it. He actually joined a Windermere in the Northwest. He closed down his brokerage.
10:51
My broker owner joined a Windermere, and then I opened up my own shop. So you're about 29 at this time, 28, 29? I'm just trying to... Yeah, I was probably 30. Yeah, 29, 30, I opened my own brokerage.
11:01
Nice. And I joined the MLS the same day I opened my brokerage. So I had no sales, no sales history at all. Because I was working in this place called Lake Chelan. You know Lake Chelan is like a vacation home, rental home marketplace. And then when I opened my brokerage, I knew I needed a more year-round supply. And vacation, it's boom or bust. It's like half the year, half the year. So I needed an around-the-year type of marketplace. So I went to Wenatchee and opened my brokerage the same day.
11:35
Nice. And so just you or did you bring a couple people with you?
11:39
Just me, really? Well, no. You know, I learned this from Keller Williams when I went down to Franchise Systems Orientation. It's like, okay, you're going to sign a franchise agreement, okay? And then it's going to take you about 120 days to get your office and your TIs and all this, maybe 180 days. So what you're going to do is you're going to go out and get 20 LOIs, 20 letters of intent or something. I don't remember exactly. So I was like, okay, that's what I'm going to do with my brokerage. Sure. So I started having coffee. Hey, let's go get some coffee. I want to tell you about what I'm working on. I want to share with you my vision.
12:13
I mean, that honestly, that is the best opening line to recruit ever. If you're like going to do something big and you haven't launched yet, all you got to do is whisper it to people and they want to know, by the way, what I'm working on today, doing the exact same thing. Yeah, I'm excited to get into that, too. Um, okay. Yeah, I agree. So my, my pathway was similar. It was, you know, I left Remax and had my own thing that I was trying to do. And it was a bit of a whisper campaign trying to get a few early disciples to come with. Um, now where you are and I story part is that you already knew that there needed to be training and systems.
12:53
I was still very much winging it by the seat of my pants. It wasn't until 2012. So I started my brokerage in 2008 as a 25 year old punk. And, uh,
13:01
and it, I had to continue to kind of do it my way for a few years until I re and I had to track it about a dozen people at one point. And it was like, everybody was doing it randomly. Right. And everyone was trying to get a little bit of the juice and, trying to understand what the secret sauce was and how I was able to sell 80 or 90 homes a year, but there wasn't anything I could truly transfer because what I was doing was purely just based on, you know, I was trying to be likable and trying to be competent, but there wasn't anything I could, you know, scientifically distill down to a checklist at that time. And so for me, I didn't actually put systems in place in my business until 2012 where I hired a coach. I hired a Plowman team system. So Michael Plowman had been to the mountaintop where I wanted to get to, and they had built the largest team in the Ontario real estate board. And so I had hired him as a coach and eventually as an operations director of our team to come and install these systems and the training program, which, by the way, was the game changer for us.
13:57
When we were able to scale was as soon as we had a training program where I could take an agent who'd sold four homes the year before at Century 21 and have himself 55 homes the next year inside of our system because he learned the dialogues, the buyer presentation, and the sales process. That was the game changer. So I'm sure your situation is different except for you came by it a little more naturally because of your background.
14:17
Yeah, well, when I was at my airline, but the first airline was called Focus Air Cargo, I trained for 12 months before I had my first hour. Wow. 12 months. And so I kind of just assumed that an agent would be something similar. I didn't know how much training they would require to become proficient in sales.
14:39
So I thought...
14:40
Oh, it can't be any different. Three months. I thought, you know, six weeks, eight weeks, indoctrination, onboarding, training simulations, and then on the job. That's kind of it's kind of the program. If I want to distill it down, you indoctrinate, you bring them on into the culture. you onboard them into the systems and the different protocols and the procedures, and then you train them on those, and then you watch them do it, and then they test out on those things to proficiency, and if they don't test out, you make them go back, and then once they test out, you go along with them. See, I think a lot of, in the airline, you do training in a simulator, you pass the training, and then you go on the line with a captain, a check, they call them a check airman,
15:28
And he watches you do it in the real life. In real estate, they send you out alone. In that wild.
15:35
Alone! In aviation, that is called death. Yeah. A solo flight, an untrained solo flight is certain failure. And now, see, our real estate agents, they're failing their ass off, but they don't even know it. Yeah. Right? And they might actually even make a sale
15:57
but do it wrong which is even worse yeah it's like i i tell this analogy it's like a private landing and you're like how'd the flight go and you're like i landed well they could have they could have skipped a thousand steps that are going to kill them next time but you only asked them how to go and they said good it's like the same thing how'd that listing appointment go good i got it yeah but you did they didn't do the listing presentation they didn't like they probably they didn't They didn't set expectations, you know, all these things. I'm sure you have this experience, but it happens all the time where if we bring on an agent that spent a year or two at a different brokerage with, you know, the way everyone else is being trained, which is not, when they come in, they're like, whoa, I did not realize I was doing it so wrong up to this point. I had no idea how much there actually was to get it right in this job. I was completely wrong. And that is like a very common conversation that we're having with somebody who's spent some time outside the system.
16:53
I love team leaders. I mentioned it on stage in West Palm Beach.
16:57
Teams or brokerages. I want experienced agents only. I only want to recruit experienced agents. And I'm thinking, well, what you're saying is you don't want to train anybody. You're hoping they come equipped, trained.
17:08
And I've had many quote-unquote experienced agents show up on my team, and I'm like, whoa. And I didn't do training. I was like, oh, Skip, you know. Oh, Skip, I've done deals with Skip. He's good.
17:22
Come to find out he gets like 1% commissions. He like does kickbacks and referrals. He misses signatures all the time. It's like, what is going on? So I remember I was training this gal. Her name's Rika. She has like 14 years experience. And I'm like, I don't care how I got sick and tired of experienced agents. I don't care how many years you've been in the industry. I'm training you as though you have zero. I start training her.
17:49
Within 40 minutes, she starts crying.
17:53
And I'm like, well, Rika, why are you crying? I'm just training you. She goes, I've been in the industry 15 years. No one's, no one's taken the time like you are today to train me. I was like, whoa, no one's given me a script, what to say, how to get the signature, how to do. And I was like, wow, like, like, I didn't expect that at all. So I was like, oh, that's the way. And guess what? She's still with me today. I mean, probably a decade, a decade on a team, right?
18:22
So. So beyond training, because I know that for you, that's probably the bulk of the secret sauce. But one of the things that you've also solved for, which many team leaders are failing miserably at is profitability.
18:34
And I know you've been able to maintain a really great culture. You've been able to offer a really high level service, but at the same time, also make it a business that's worth owning. So I'm just wondering, I definitely have a lot of team leaders that listen to this and I'm curious what insight you could share in terms of profitability that might be useful. Well, you've got to watch your margins. You've got to protect your margins. Any deal you give is the deal that everyone's going to eventually get.
18:59
And I've seen it time and time again. You give a deal and you think it's confidential and it's a non-disclosure and you did it to get that person in the door or you gave it to them to make them happy again.
19:12
Are you talking about agents or clients? Yeah, I'm talking about agents. I'm talking about retention. You're solving for retention with margin.
19:22
Okay, Nassim Taleb is a writer that I love for a long, long time. You know Nassim Taleb? Yeah, yeah, yeah. Skin in the Game.
19:30
I'm drawing some blanks. Skin in the Game by Anti-Fragile. Yep, totally. I read Anti-Fragile.
19:37
He talked about the agency bias and agency bias and maybe Charlie Munger talks about agency bias too. And you have to understand that because we are the agent in the relationship with clients.
19:52
We are incentivized to sell their home because if we don't, we make nothing. So inherently, they don't trust us because they know we're full of it because we have to be.
20:06
To a certain degree. Now, we have to hold two things in our mind at the same time. And he talks about never pay anyone on a percentage.
20:15
Never pay anyone on a percentage. And I'm thinking, oh, that's why I love real estate, because I get paid on a percentage. He's saying never pay on a percentage. I'm thinking, I want to be in the industry that gets paid on a percentage. Financial advisors, 1%, 2%, right? Capital managers, 2 and 20. Real estate agents, 5, 6, 7%, right?
20:35
same thing with your agents we we we have we have splits on percentages right and so to us 10 seems like nothing but it can be massive sure right a 50 50 split versus a 60 40 foot a 70 versus 80 like it can be the difference between profit and no profit it can i've seen it i've seen it across the nation especially if you have a broker
21:03
See, you're Indy? Are you Indy? Yeah, you bet. Yeah, I'm Indy too. So we don't have this wrapper, this, I call it the mothership. We don't have to pay taxes to the mothership and ask them to use the taxes wisely for us. Correct. Right? And so we have a huge advantage being Indy.
21:27
these other companies that have, they have to pay the split, the double split and the tax. And, and what happens is the team ends up, the teams ends up compromising on their split because they have to make it work with their brokerage. Even at a, even at like a, a little 95, five, even at a 94, six, even at something that's a 4k cap, it just,
21:51
Even when you have a 4K cap going to the broker and then you have to negotiate a split with your team member, you're negotiating as though the cap is there, not there. Correct.
22:02
Because you're negotiating it before the cap has been fulfilled. You're better off paying the cap for them and negotiating better. So I guess what I'm getting at, AJ, on the profit is like I had an agent come into my office recently. He had a Keller Williams 16K cap. Mm-hmm.
22:19
and he wanted to join. Experienced agent, does 24 deals a year for the last 10 years. Anybody wants him. And I said, guess what? I don't do caps.
22:30
He wanted a cap. I'm sorry. I'm not saying don't do a cap. I'm just saying I can't make that work. I have an agent that made the team $500,000 last year.
22:42
Do you know how many cappers I need? Yeah.
22:46
I have this conversation often. It's like, you look at these big box store places and they're capped at 16K or whatever it is, you will get to a certain size where the attrition rate will, like people just retiring or failing the business or just deciding they don't like it, getting out will exceed your ability to recruit very quickly. And if you need 200, 300 agents, you're going to cap out there. And that's where you look at the Royal LePages or the Remaxes in our area. They've been at the same size since I was there 20 some odd years ago. They haven't grown out of that and the splits are the same When the market's really hot, they're not participating in that. When the market's down, they lose people and they're in a massive hunt to try to just backfill the bodies. So as a consequence, the quality of agent goes down. And so I just look at the model of trying to make people happy for 16K a year with that give a little, get a little thing. It's just a race to the bottom.
23:41
It doesn't make any sense. Whereas our average agent, let's say, is grossing
23:45
And $600,000 really is where it comes down to. They're getting a little just slightly around half of that, a little less than half. Our cost of sale is about 45%. But the amount of resources that we have to then reinvest back into leveraging them, reinvest back into marketing so they never wonder where the next deal comes from, reinvest back into having the facility that we do and the training and all the things. That's what matters. And I think any agent who focuses on split, who comes and says, what's the split? I would just say, you're asking the wrong question. The right question is, what do the people in your environment experience from a lifestyle perspective? How much are they earning on average for the time they're putting in? What's the culture like? What is the feeling of being here? These are the right questions, not what's the split or when do I cap? That's just, unfortunately, like you said, there's no pre-described way of Onboarding people there's also no understanding of what the right business model is because everybody's still trying to figure it out But I do think the average model is the way I think you say that a lot in your content You but you're a big believer in the team rich model, right?
24:48
I am and in knowing that the teamers model is not the big Brokerage model is not the traditional brokerage model and it's not the traditional cloud model I call cloud brokerages now traditional because they've been around long enough. They've been around long enough They can we just they're they're they're not new correct. I
25:05
Like you're not going to catch the recurring revenue wave. And they're not that disruptive either. I mean, essentially what they've done is they've usurped the people who are trying to get the 100%. If you're at Remax and you're not happy with your 100% exchange, then you're looking at it. Well, what can I get? Oh, I'll get some stock in exchange for that and some rev shares. But it's really a spin on the same old thing, which is give as little as possible in exchange for as little as possible. It's not that revolutionary. There's some financial engineering involved, which is great, but it's not changing how an agent interacts with its brokerage.
25:39
Yeah, not at all.
25:41
The traditional franchise model, and we're kind of getting into the big industry, they would have regional recruiters. They would have recruiters on salary that had benchmarks to hit as a corporate or a corporate entity. Right.
25:57
what Keller Williams did is they kind of started this like agents can also recruit, right? And then the cloud took it even one step further and said, we'll just make the agents recruiters.
26:10
And the onset of social media, it was like, well, agents wanted just to be influencers and attract because they didn't actually want to recruit. To recruit, I'm telling you, to recruit, you got to be a total savage. Oh, yeah.
26:26
The recruiters I know at Keller Williams or Mega or Regionals, they are sales machines, savage recruiters, hunters.
26:34
They aren't shooting fish in a barrel. They're not getting leads.
26:40
They are B2B corporate warriors that will knock down doors and get appointments. I have a lot of respect for that. It's not something I ever wanted to do myself, obviously knowing there's a need to recruit, but For me, we went the one-to-many model, and we kind of wanted to flip the script. So the idea here is on an event basis, we will have maybe 10, sometimes 20 people in a room. I'll present what we've got going on, but answer questions about the industry and be very transparent about it, and then give them the option to compete for the one or two available positions that I had, which is the opposite of going on 100 coffees and trying to sort of you know, dazzle everybody with your offering. I would rather flip the script and say, okay, well, you guys let me know why you would be the one person that we would onboard this quarter, right? And that just for me has worked very well. It's been authentic for our brand because we want to stay like the Navy SEAL team of real estate, which I think resonates with you.
27:36
It's not like if you can fog a mirror, you can come join Vantage. And so I think our agents like that because they know I'm going to protect that. And it keeps me out from having to do five coffees a week and being that savage that you say. I didn't find that to be fun. I tried it for a bit. It wasn't my jam.
27:52
No, it's not. It's very few. I think it's one in a thousand people's. mentality and DNA. And so what happens is with these companies, the agents think, oh, I'll join and I'll start a YouTube video. I'll just I'll just attract. Yeah. And so like you just attract and then your numbers get crazy. But the people that really blew up in the MLM cloud, you know, they already had a huge following. Sure. They already had a huge following or were
28:21
that savage person I'm talking about. What you're doing is what you need to do at a team level. Because you need some level of scarcity. You need some level of selection process. When I got hired at the airline, they weren't hiring everybody.
28:38
They had more applicants than openings. The demand without exceeding the supply of opportunity, for sure. Yes. And so what you're doing is brilliant. And I know because I heard you talk about this over a decade ago, and you're still doing it. So it must work. You have to have some scarcity. You have to have some limited availability. So we do the same thing, and it's artificial. But you only have so much capacity to onboard and train someone at the right level.
29:08
And so what is that? Same thing with listings. You can only take on so many listings.
29:14
The unfortunate thing is we usually can take on more than we currently have available, but everyone has some level of capacity issue and you need to use that to your advantage. So I love that. If you can fill a room up and say there's only three,
29:28
I think you just hit something that I want to go a little deeper on. So using that to your advantage, there is a capacity, whether you're a single agent or you're a small team, there's a maximum number of listings you could take on in any given week. And so if you can get your marketing right and if you can position yourself as a high-demand agent in your area, you can always use that scarcity where you say, listen, I'm at the point where I can really only onboard people three listings a week in an efficient way. It's really important to me that I do this well. I've got 152 item checklists that I need to nail in order to launch a listing correctly. So I'm only looking for three people this week. And just like you're here to interview me, I'm also here to interview you to see if I think this is a good fit for us to launch your listing and do a great job for you. So again, that reframe of the demand of strips of supply, anybody can do it. Single agent, small team, even a large brokerage. There's a demand
30:17
There's a constraint at some point to your own bandwidth, and you can use that to create scarcity. Always. I do it on the buyer's side.
30:25
Because buyers take even more time, and if you have people that are clogging up your system. So let's say I can only effectively, at the highest level, work with 12 buyers. At the highest level. And that's huge. Like nobody can do 12 active buyers properly. At the highest level. So if you have, and maybe it's seven buyers.
30:46
If you're at four or five, when you talk to somebody on the phone, you need to be like, I'm currently working with five people at the highest level, and I don't compromise on quality. I don't want to do a good job. I want to do a great job. I got two more openings. I would love to meet you. You don't really have to pressure them into that two spots, but you said something that's way different than everyone else, which is like,
31:10
Like, they just have this, like, I like to help everybody. You know, like, they're like, they're weak. It's just weak. And the rocket fuel to that is if you have content on YouTube that positions you as the authority on the subject matter, if you have a client that you've delivered the line that you can only handle, you know, X amount, and you've also got content out there that positions you as the authority, where they have this upward view of you, and they'll already come to you with questions like, I don't know if you have time, but would you take me on as a client? It all works really, really well with that frame. So when they show up realizing that, A, you're in high demand, and B, you've really only got a very small amount of openings, it becomes lay down business at that point.
31:52
Yeah, people want to work with the busiest agent.
31:55
They want to work with the perceived dealmaker. And what is counterintuitive, do you think because you're going to say there's only one spot, they're going to go, well, that's too busy. I don't want to compete.
32:05
It's like a buyer saying, I don't want to compete against the home. I don't want to be in a bidding war. They always say that, but guess what they do? As soon as a house has an offer on it, everyone wants it. For sure.
32:15
It's not what they want, but they can't help themselves.
32:19
And we do the same thing in the scholarship program. We do scholarships. It's harder in Canada because it's more expensive and it takes longer, but in the U.S. it works great. We'll say, I'm giving away, I'm awarding, not giving away, I'm awarding based on an application selection process
32:35
seven scholarships by such and such and such a date. Love it. Right? And we always hit it. Because we're doing a training on, starting in the second quarter, we're bringing on 10 agents. And so if you can make that announcement, you have a far greater chance of getting it.
32:55
I love that. Yeah, we've been playing around with the scholarship idea for a while as well. I want to go back to what happens as a byproduct of the demand out, stripping the supply. So I think you are also a believer in going premium with your fees as well, right? You guys have probably notched up your fees over the year.
33:13
You coach agents too. Do you find there's always such a massive resistance to leaving what everyone else is doing and just being that half a percent or that 1% more? Do you find that you just constantly bang your head against the wall trying to convince people to give themselves a raise? Once they reach the end of their capacity, they're selling 50, 60 homes a year.
33:34
and they're in demand, why would they not expect to be at the premium level? Yeah.
33:43
You can't talk about commissions. It's like Fight Club. You can't talk about Fight Club. But at the same time, I believe in a free market. And I work with a – I have the fortunate –
33:58
I was fortunate enough to work with a gentleman that built 300 Sears Roebuck stores around the country. So, you know, the Sears building at one time was the largest building in the world, right? So Sears was like Amazon. Yes.
34:10
And this guy in his 40s went around the United States and built 300 stores.
34:15
And he sat at my desk when he was 78 years old. He looked at me and he said, Nick, there's no such thing as an unreasonable amount of profit.
34:24
If so, he goes, I went around here and some of the stores I didn't make any, I didn't make much money, but I just raised my price and raised my price. And, and there's no such thing. So what happens is we make a certain amount and we think that's fair. We're looking for this fair balance. Well, the marketplace, if they're willing to pay you, you're worth it. If they're not willing to pay you, you're not.
34:45
it's that simple now you have to have a body of work so i can't just say okay i got shot down one time i'm not worth that because you need a body of work you need more data so if i owned a storage if i owned a storage store a storage facility if i'm a hundred percent full my rates are too low i need to raise my rates So that I have vacancies. I need to find it. Otherwise, I've seen it in the investment world. Apartment complexes, they're under-rented because they've been full and they never caught up with the marketplace. And we're a percentage thing.
35:24
There's a massive perceived value to being the most expensive in your marketplace.
35:29
There's a huge advantage to being the most expensive in the marketplace. And yet no advantage at all to being the second cheapest, that's for sure. No, no.
35:41
Some people should walk into your office and say, Nick, I know you're not cheap.
35:45
I've had people say that. They're like, Nick, we're here because of your reputation for getting the job done. We know you're not cheap. Well, and this is the market for it. I mean, listen, when even a turkey can fly in a windstorm, there might be an argument for houses selling themselves and you're talking people into paying... a hundred K over list with no conditions. There's not a lot of elegance to that. And so maybe there's an argument that premium commissions aren't as appropriate in those markets, but that is certainly not the market we're in. And right now it takes a professional to get a home sold. It takes a professional to get an offer negotiated, a price that gives you the cushion and the feeling that you would need the safety and certainty you need to feel good about that. And so we are earning our keep right now.
36:27
Now, beyond that, I mean, if you look at any other service, right, if you were the best HVAC company in your city, and you had 1,000 five-star reviews, and you were the top there, you were the top spot. Anytime anybody Googled your name, that you were the HVAC company that came up, you had just a glistening track record. And you had a great book of clients that came back. And, of course, you're limited in terms of the amount of HVAC clients you can take on each year. Wouldn't your natural course of action be to test pricing in the market? Wouldn't you start to see if potentially you could justify a higher dollar?
37:01
Flipping it around, if you were calling the HVAC company that held the number one spot that AI recommended or SEO put at the top and had the most Google reviews, would you expect them to be doing that service at the average of what everybody else that's doing plumbing would be charging? Or would you expect that they would skew towards the premium side? Obviously a rhetorical question. Yet in real estate, we have this idea that we have to charge what everyone else charges or we can discount. but there's no room for going north with the fees, which is odd.
37:32
No, there's a disconnect. If you have the most reviews in your marketplace, if you're the 800-pound gorilla and you actually provide a premium service, if you charge the same amount as a solo agent, that's weird in the consumer's mind. I mean, it actually causes a couple of alarms. Mm-hmm. Right? There's a couple alarms that go off. So, you know, there's a couple. We've been taught that if you lower prices, demand goes up because that's economics 101. And it's true, but it's not always true.
38:09
Luxury items are different. The more something costs, the more people want it. Absolutely. Now, we also know, I thought about this the other day on my bike ride, is that for the most part,
38:23
when you manufacture goods, you get better at manufacturing. And when you can manufacture a good for less, you can price it lower, right? So you can price something cheaper and that's better because you can buy it, you can sell more of those products. But there are some things that people buy because they took forever to buy. So like I could buy a couch from let's say Vietnam and they, for a thousand bucks, or I could buy an Amish couch that took a thousand hours to build.
38:52
Right. It's kind of foolish for me to pay someone to work, you know, dumber, not smarter, right? Versus smarter. But you still feel better paying the premium for the Amish. Oh, for sure. Because I got the Amish one.
39:07
Like there's, you know, Italian watches, watch me switch watches, Italian cars. It's the same thing. It's the handcrafted. It's the, it's the time it takes. Now in real estate, we don't, we don't get paid for our time, but I just, the point is, when something's worth more charge higher, it's worth more and people don't have time to investigate.
39:30
They don't, they don't. So you have to do it.
39:34
Yeah. I mean how they're, they're making a decision to on who to list their home with probably over about one to three hours of due diligence.
39:44
Sure.
39:45
I mean, prove me wrong. Do you think a seller is really doing more than three hours due diligence on the listing agent?
39:53
Definitely not. No. No, and this is like a $30,000 commission check. Now, so I think you ethically, like you can't just overcharge and not deliver some premium level service and experience because it won't work long term. You will finally get, someone will expose you. But if you're on a team ridge and there's a marketing department, there's an in-house photographer and videographer and you've got a lead conversion department that's answering leads in real time and you've got this engine or machine that brings in 800,000 new buyers every single month and you've got 55,000 people actively searching your website in your CRM and you've got all these systems and you've got a sales force of 24 people who all know about your listing from day one. How in the world is that not worth more than this agent who has sold eight homes in the last 12 months and actually in our market isn't even incentivized or isn't even permitted to take a buyer that they have and introduce them to the property that they've listed.
40:50
So how would you be in better hands? Why would that ever cost the same?
40:54
No, it doesn't. And a lot of times, a lot of times I'll work with a team, a team that has all of these different components, photographer, staging, consultation, database, right? And
41:07
They will systematically increase their prices and conversion will go up, not down. Yeah.
41:14
It's just counterintuitive thing. Yeah. It's wild to a point, to a point. Now you can price it where people are like, get out of my house.
41:22
But no, I mean, what happens is when you actually go to that premium level, you anchor them at that premium level. half of the time they don't negotiate. The other half of the time, now you have more airspace. Correct. Here's an analogy. When you're flying and an emergency happens, you want to be as high as possible because you have more time.
41:44
So if I started here, like say seven, eight, something crazy number, and they have an objection over the commission, they want to negotiate, I got more room. I got more room, not less. If you're going to come to the party, at least you're getting credit for it.
42:01
Totally. That's what I say to my agents too. I said, listen, you have a premium fee model. You are permitted if the situation calls for it on the exception basis to make a concession. However, when you do, at least then you'll have credit for that $2,000 concession or whatever it is. But if you don't have that airspace, as you say, there's zero credit or goodwill in exchange for that reduction.
42:24
Yeah. I used to train, I need to go back to it. Whenever you come down
42:30
It's a credit. We call it a gift. So if they negotiate me down, you always convert it to the actual dollar amount and then say it's a gift. Or that you're willing to look at that as a credit when an offer comes.
42:52
I met this guy in LA.
42:55
He does $10 million, $20 million homes. And everyone's like, tell us the truth about commissions. Tell us the truth. And he's like, nope, it's the same.
43:07
And we're like, BS, it's not the same.
43:10
Really? A $20 million home? You're really getting that number? He goes, yeah, I just tell them that. Let me go earn it. Yeah.
43:20
I'm willing to have that conversation, just not right now.
43:24
And most of those people at a $20 million home, they're entrepreneurs, they're business people. They're like, okay, fine. If you can earn that, right, then I'm all for it. But I promise you, if you bring me 19.1, I'm talking to you.
43:39
100%. We call that a set-aside. So if you can't handle the commission objection in the moment, you say, you know, would it be all right if we set this conversation aside to a time that's a little bit more appropriate? Because, you know, we don't even know what we don't know yet. So let's get to the end of the line. Let's leave me fully incentivized for now.
43:55
And if I can get you a home that you love at a price you're happy to pay, what does it matter what I get paid? Or similarly, if I can put a net dollar in your jeans you're excited about, I don't think my commission is much relevant at that point. So why don't we do this? Let's set this conversation aside until the end. And it is amazing how seldom does that ever come back up. As long as they've seen you hustle, they know for sure you've squeezed every possible dollar out of the deal. They know you went back and back and back and got everything that you could. By the time it's done, you've earned your keep. And whatever has happened between when you started and now has justified the additional half a percent or whatever to them. And they are good.
44:30
They're good. They're good. Yeah. And sometimes you do have to come to the table with it, but rarely. Yeah. And the set aside is really, really good. The, the other thing that I want to go back on splits with your agents too, as a team leader, if you take the broker owner, if you want to see your commission, your average commission go down, like the percentage, give them more money.
44:56
I promise you agents that have capped get lower commissions than
45:00
post-cap than pre-cap. I promise you. Now, I don't know, I don't have the data, but do I need to see the data to tell you that as soon as they're getting 100%, they're willing to go to the listing table and just take a little bit less to try to get the deal, right? I had an agent the other day. He was getting a little bit more on the deal. And guess what? He came with a listing agreement that was lower than he normally gets. And I said, Trevor, that's a little bit lower than you normally get.
45:30
And he's like, I go, did you... Tell me the truth. I go, did you start there? He goes, yeah, I started there.
45:39
I just feeling nice. He was feeling nice. I go, really? You were feeling nice? Feeling rich. Or you're thinking, oh, it's the same. I'm making the same amount. See, what happens is when you give a team agent more of the split, they're thinking, okay, well, I'm still making the same amount.
45:56
Because remember, they don't think like... They don't think like us.
46:02
And the reason they don't think like us is because they don't have all the information we have. I see my credit card statement every month.
46:12
Right? I'm paying all these bills. So, of course, I think differently than they do. They're thinking, I'm at the kitchen table. I got to get this thing. I need a little bit of money. Or they're sitting at a kitchen table going, I'm feeling real good about my position. This is just gravy. right so they don't have the same like urgency that the owner has and so the owner has to have accountability on the performance of the listing presentation and the standards on the offering now now it's a free market so you know like this is where commissions get a little off but as an owner like you have to inspect these things if you don't
46:56
you're going to hurt. I was talking to a team leader that does 500 deals a year, right? And he was asking me struggling, quote unquote struggling, right? I'm sure he's doing fine, but at 500 deals, you'd think you'd be doing great. Yep.
47:13
And it was a, it was a pricing problem. It was a, it was a commission problem. Yep. Yeah. So kind of wrapping up our profitability conversation, I think it comes down to the right model in terms of commission. and then it comes down to the right premium or you're charging the inappropriate amount at the premium level for your fees so that your average transaction value has as much airspace as you can get And it ties into training. And then just, I guess, obviously, financial controls beyond that, right? And having that perfect P&L where we spend this percentage on marketing, this percentage goes into administrative, this percentage goes into OPEX, and on it goes. So let's shift gears for a sec. I want to talk, I mean, you had a wild couple years with Reside. Let's start with the genesis of that. Why'd you get involved? What did you learn along the way? What surprised you? And then how cool was it to do an exit?
48:05
Yeah, so for those that don't know, Reside was a real estate, if I could, it was a real estate team platform that was a bundled service of coaching and consulting and technology, right? So a lot of teams, they start a team or they're in the messy middle or they're a growing team and they hear like everyone does it differently, right? Right, everyone has a different model. And you go to these conferences and here's my tech stack, here's my org chart, here's what I charge, here's my splits. And there was no really like franchise.
48:43
It was almost like a franchise where like you would get a franchise at McDonald's because they have everything built out for you. You get a Remax franchise because theoretically they have all of the things built out for you. And you're going to pay them a percentage. Sure. So Reside was a franchise, but instead of a franchise, we did a service agreement, a consulting retainer, really just a monthly fee with a sliding scale based on size. So if we could help you grow, we would get a piece of the upside. We weren't owners of your company, we weren't partners in your company, and we didn't sign a franchise agreement. We had a service agreement. you know, like a Boston consulting or a McKinsey and company, they could have a consulting agreement with you and help you consult and build your business. They would also maybe like to have part of the upside. So they might say, Hey, your company is doing $50 million right now. If we can get you to, we're going to be a hundred thousand dollars a month.
49:37
And you're like, I can't afford a hundred thousand dollars a month. Okay, fine. You can't afford a hundred thousand dollars a month. Okay. If I can get you from 50 million to 150 million in 12 months,
49:46
I'll lower that to $20,000 a month, but I get a percentage of the up.
49:52
And so consulting companies have done this in varying different ways across industries. And so we did it in real estate for teens.
49:59
So we're like, hey, this is our minimum monthly, and it includes a website, a CRM. We help you build out your automations and your recalls. We help you set up your comp plans and your models to your marketplace. So we do your books and your financial records. So I was reviewing 100 different teams' profit and loss statements on a monthly basis across North America. So I got to see behind the hood on all the different models.
50:28
You name it, ABC, XYZ, LPT, EXP, I saw them all.
50:34
And then I saw the Indies and saw... So anyways, it was John Sheplak. He's a mega coach.
50:40
Coaches some of the top teams and mega teams in North America. Really popular in Canada. Yeah, for sure. Very well known in Canada.
50:51
I think that helped. Everybody saw Justin being our top G in Canada, so they're thinking, well, if he's coaching with Shep, then we probably should get some of that.
50:58
Yeah, he's been coaching with Justin Haver since probably for almost a decade at this point.
51:05
And that's how I heard about him too, because Justin's team kind of, a lot of people walked out and then he came back bigger and better than ever. I'm like, what the hell, what the heck happened? Recruited a bunch of agents. So then there's Preston Guyton and Sunit Agarwal. At the time, Sunit was the number one team in California. And together we kind of had our own niche.
51:25
And we went out and made this offer to people around North America. We grew it to,
51:30
around 60, 65 active clients.
51:34
And then it was acquired by Robert Palmer who owns LPT Realty. So what do you think, what did Palmer see in what you guys had built that was going to be a big value add for LPT? I understand they're going through a pretty good growth phase right now. Why do you think he was excited to get his mitts on for a side?
51:50
Well, I think he, it's a team service.
51:56
So as the industry grows into team, you know, understanding teams are the ones actually selling homes. I think there's been a slight pivot in the industry where it was agent count, agent count, agent count. Oh, wait, 71% didn't sell a home last year? Uh-oh. Who's selling homes? Teams.
52:18
You see a consolidation, big consolidation? Yeah. Yeah, and so that's why you see this massive agent counts are consolidating to places where the teams are hosted, right?
52:29
So he wanted to make his model more attractive to the team leaders, so he thought he would basically jump in.
52:36
His model was very attractive to agents, just like eXp and other, and teams, and he started seeing the teams, not that he didn't see that from day one, and I think it was just a natural fit for him to acquire, reside, and add a team service offering. So how did you guys differentiate yourself? I mean, at the time when you were building this, you were competing against some monsters. You had Ben Kinney over at Place, who had a sort of brokerage agnostic platform for teams. And then obviously you had Adam, her brother, over at Le'Veon before they got acquired. And so there was three big players at one point, you guys and those other two, probably some others that I'm forgetting. But how did you guys set... reside apart, particularly against place? When you were selling it to somebody, how would you position against place, if you don't mind me asking? Yeah, for sure. It's really interesting because we didn't really know. Our initial game plan was the marketplace is...
53:35
so big that it's just not, there's not a lot of competition at all. Right. So we didn't even, we didn't even worry about place and compete account place or even try to differentiate against them. In fact, when people say, how do you, how do you differ from place? We would say we're different. We don't know.
53:51
Our answer was, we don't know how we're different. You tell us.
53:55
We just know that teams are asking for this. Teams need services. They need guidance. They need consulting in an all-in-one platform, and we're delivering that to you. So that's how we positioned against it. But fundamentally, the difference between Place and Reside was, Place was a JV partnership that split the profit. Mm-hmm.
54:20
Reside was a monthly fee with a sliding scale on the upside. Now, there was differences in tech. There's differences in training. There was differences in onboarding and all that. But I think fundamentally that was the difference. Now, where Place, I think what had an advantage was they were early. They were early adopters, early in the industry. They innovated in the industry. They had their own tech, but that was also a discount. It was also not good because they didn't have flexibility on tech because they used one tech. But it helped their valuation. It was a time in the marketplace where teams weren't making money.
54:59
So giving up 50% of nothing was an easier sell.
55:03
So I think plays caught people. That timing of the market was great. They were growing because it was like, hey, AJ, show me your books. I can take some of this overhead off of you.
55:17
And then when we get through this downturn, we're going to grow together.
55:23
And I think that was a pretty good formula for them.
55:26
Because you saw teams across North America, you're like, why did they do that? Why would they give up 50%? Well, they're not giving up anything. And they gained some efficiencies.
55:41
right? It's almost like they joined a team. Yeah. Well, I want to ask, how did it feel? I mean, real estate agents don't often get an exit. How did it feel to see something from beginning to end? And I don't know if it was life changing money or not for you and you don't have to share that, but just how did it feel at the end to get an exit, to get a check and to say, okay, we built something, we sold it. Someone saw value in it and now I get to go do something else. What was that? Yeah, it was, it's pretty, it's pretty awesome. It really is. It's, um, it,
56:11
psychologically, there is a little bit of loss because you started, you founded something and started something and to let it go to somebody else, you will not want, I had resistance. Even though that's what we wanted and it was the right move and I think Robert Palmer was the right buyer and that there wasn't, it's not like there was 10 other buyers. Like, there's only so many buyers for Reside. Correct. And Robert was, Robert was probably the best buyer. Yeah. But I went through this moment where I was like, no, no, let's just keep it and grow it guys.
56:46
Like I was like, let's go. And then it finally did close and the money cleared. And I'm like, wow, we did it. We actually did something in 30 months that I just don't think a lot of people can do. And 30 months is so fast. It's so fast. So it was that it was, it was, um,
57:05
It was a testament to having four people with very specific skills.
57:11
Very specific skills. John Shep lacks influence.
57:17
and and prowess because if you can ever find somebody that already has that influence you have the idea or you can implement and you can execute but you have the influence you have an influencer built in it's hard to already get influence it's it's hard the best products and ideas without influence and marketing there's a graveyard full of them oh sure
57:41
The audience and the distribution is a huge piece of the puzzle, without a doubt. Chef came to the party big time with that. Big time.
57:50
And he delivered on a weekly basis.
57:53
And Sunit delivered on a day-to-day basis. Him and I on a day-to-day. And Preston was building his influence throughout this two to three years. So we kind of caught this like Preston was doing his thing and he actually started growing
58:11
uh, ancillarily outside of our worlds with his easy home search and the, in the sure sin and his technology and building his influence. So, um, it was a nice, it was a nice, really, really nice run. And the funny thing is, as soon you, as soon, as soon as I know what's happening, I'm already thinking about my next move.
58:32
And like, you think, you think people like us, we're just going to like, okay, finally, like take a long vacation. So now you're like, you're up. No, we're not wired that.
58:45
I just had to come to the realization. I started thinking about something bigger. The number one reason you should sell something is because you will instantly want to build something even bigger than that one. Let's talk about where to from here. I got a little taste of it when we were in West Palm Beach. I got a sense of what you're building. It's a bottom-up brokerage platform designed to give team leaders the
59:11
I'll let you finish the sentence. I think I understand, but I'd rather than guess. Let's let you tell us. What are we building? It's called TGB, Team Growth Brokerage. What I noticed at all these different brokerages is that the team was trying to fit their model within another model. That caused double splits. it caused redundant transaction fees or monthly fees, and those weren't going to the team leader. And the team leader was limited to their ability to create a model that was profitable. So I thought about what is a brokerage and why do you have a brokerage?
59:49
The number one reason you have a brokerage is because you have to have one. I mean, if British Columbia said, hey, AJ, you don't need to have a license anymore. would you still have one?
01:00:04
Or would you just go conduct business? No, you just go conduct business. So the number one reason is because you have to have one. So the number two question, the question that comes up after that is, do I become a broker or do I align with a broker?
01:00:19
So then I said to myself, okay, well, I'm going to create a brokerage that was designed for teams, teams only. Because when the brokerage has to service solo agents, part-time agents, and hobbyists, they have to have a model like we're talking about. Low splits, free single agent websites, free Canva stuff, a lot of services that don't really serve the team. In fact, the team probably, the team despises those services because they don't use them.
01:00:48
Right. And the brokerage is taking their money and then servicing agents. It's almost like living in Washington state and they take my tax money and they service a lot of people. And you're like, where'd it go? Yeah. Yeah. Where's the money going? So anyway, I decided to go, OK, I want to be a team centric brokerage. Teams are the layer of compliance.
01:01:12
A team leader has built-in compliance. That's a huge thing for a brokerage at scale. They gotta review every form, they have to review all the paperwork, they have liability, they can get sued, so they spend a lot of money on compliance. AI was coming out, so AI compliance is ripping right now. I mean, AI can upload your forms, document your forms, rename your forms, do all the compliance. So I said, I believe I can broker for less than you can broker on your own.
01:01:44
Therefore, I can give you a pricing model that is so advantageous that there's no other option. So team growth brokerage is a subscription model. You pay a subscription fee, and then you control the splits, the caps, the fees, the monthly fees.
01:02:01
And then because we only work with team leaders, you have a built-in network of team leaders and operators. Because that's the one thing Indies don't have is like a mastermind group or a collective name. And that's a huge value proposition for teams because you're like, why would that team pay $250,000 to a brokerage that they don't use any of the services?
01:02:23
Well, it's nice that they pay their agents, but they're like, oh, I like the association. I like the masterminds. I like the events.
01:02:31
And you and I have got around that for all these years because we go pay and travel and make friends with people. But that does take money and energy. So I'm building that for the people. So it's brokerage as a service subscription model built for teams. We collect the money and we pay your agents based on the programmatic plans you put into our system.
01:02:54
And what I learned from Reside is we help consult you on the programming the system on the right payments. So like the splits and the tweaks and finding the margins that you need to be profitable. Well, you've seen hundreds and hundreds of people's P&Ls at this point. You've seen them all. So you have a pretty good sense of where business goes to die. You have a pretty good sense of what the 5% that are doing it well have in common. And just that vantage point is so valuable for anybody who would be joining with you because you can steer them away from the iceberg.
01:03:27
Yeah, it's a little deer in the headlights when they say, hey, you get to design your splits. You get to design this. And they're like, well, what do I design?
01:03:38
This is what I'm currently doing because they have no guardrails now because some companies have guardrails. If you're a team, you have to do 75% or you have to do this. A big profit center, a massive profit center for team leaders and brokers are transaction fees, And monthly fees.
01:03:59
Huge. If you have 30 agents and you have $100 a month, that's $3,000 a month.
01:04:05
If you charge a transaction fee, most brokerages charge transaction fees. Look at the traditional cloud-based brokerages. Do you think they make money on the splits? No.
01:04:17
No, the splits don't make them money. They're making it on the monthly recurring revenue. So they want to increase agent count.
01:04:27
Right. And I don't really I don't really think that the industry needs more agents. No.
01:04:33
Right. And so I couldn't say to myself, I'm going to grow a brokerage and compete with I'm not competing to get the most agents.
01:04:43
That's not if I had a monthly recurring revenue model on agent count, I would. And I kind of do because your script, your subscription goes up. But I'm not on the size of your team.
01:04:53
Yeah, yeah. So who is your avatar, if you could, and I'm sure you've got them well-defined. Who are you going after? What is the ideal size team? What stage are they at?
01:05:04
Walk me through who your avatar is.
01:05:07
Yeah, so right as it stands today, we have 10 team leaders in 10 states. So we'll launch 10 states in the first three months, and then that's phase one. Phase two is...
01:05:23
50 states in 18 months and 250 teams.
01:05:26
Phase three is 1,000 teams in five years and 5,000 teams seven to 10 years. Are there that many teams or are you seeing into the future that teams are going to become more popular? There's going to be more of this consolidation. Are you envisioning a world where everybody bands together?
01:05:43
I think brokers becomes a service, not a model.
01:05:47
I'm betting that brokerage becomes a service, not a model. There's 142,000 indie brokerages in the United States. 142,000? Indie brokerages. Wow. Like in Wenatchee, Washington, 50,000 people. There's probably 12 mom and pop brokerages. Think about how many mom and pop indie brokerages are in your market. Yeah, I was just literally thinking that. It's probably somewhere in that neighborhood. Not more than a dozen, though.
01:06:14
Yeah, okay, a dozen, right?
01:06:17
So, and how many, the franchise model, how many franchisees are out there? Yeah, another dozen. Another 100,000? Another dozen.
01:06:28
Yeah, now you extrapolate that across the United States. And we're talking Iowa and Missouri and Oklahoma and Kansas and Better Homes and Garden. Like, in my market, there's four REMAX offices in my market.
01:06:43
So the franchise layer, they're going to start becoming teams. I noticed this at Reside. We thought the avatar was the messy middle. Teams that are stuck between five and 15 agents that can't make money or they want to get to the seventh level. And they would hire us to fix the problems or help them grow out of it. You know what we found?
01:07:08
Broker owners were calling us saying, how do I build a team? I had the very same experience. I've had REMAX broker owners call me and say, we want to build an E-team, and how do I do it? You crack that code, what do we do? And they want to get into that business because they see that their business has stagnated a decade ago, and they're seeing these teams come out, and there's obviously, you know, there's upside to it. So you're totally right. That is where it's going, and they're all trying to get a piece of it. That's where I stomp.
01:07:36
Exit, exit. Better Homes and Garden, all these things. And they have 200 agents going, I have 200 agents, but I'm not making any money. I want to build a team like you, AJ, like you said. How do I get 5, 10 agents on 50-50 splits? And so we had this client. He had 55 agents. They did 770 deals.
01:07:57
Made 100 grand. Right? We helped him build a team to 10 agents.
01:08:06
And
01:08:07
He's up to 15 now. He's made more in one month than they ever did in the history of their brokerage with a tune. I don't doubt it. And so guess what they're doing with their brokerage? Sunsetting.
01:08:18
Sunset it out. Why keep it? The only reason you would keep it is because you have ancillary. Because here's what they did, right, AJ? They get title companies, escrow companies, mortgage companies to try to justify agent count. Yep. Right? And so I think what's going to happen is out of the $5,000 Goal, 1,000 of them aren't even teams yet.
01:08:42
Another 1,000 to 2,000 are franchises or indies that are going to convert to teams or build teams within their system.
01:08:52
And then the last couple thousand are just teams. So if you think about it that way, I got a team in Walla Walla, Washington that she saw what I was doing and she's like, I was about to get my broker's license, but tell me more. So I think what you're going to see is we won't call them brokerages anymore because they're not actually the broker.
01:09:17
We're just going to call them teams.
01:09:19
And what we think of as a team, we're the old dogs, AJ. We're going to call teams real teams. We give you leads. We hold you accountable. We hold you trade you. You know what I mean? We're the real team, but the future team, we're not going to be able to recognize it. We're not going to be able to recognize what people call teams anymore. Say more. Walk me through five years from now, what do you think a team looks like?
01:09:45
I think it looks a lot like a brokerage of today, some of them, and they're going to say they sell 4,000 homes, and you're going to find out they got 200 agents on caps, and they're charging monthly fees or different things. They're just working within a layer, someone that took on the brokerage layer. So that's going to consolidate.
01:10:12
Because once you have a brokerage across 50 states or in Canada, you have the infrastructure. So you've tackled the hardest thing, which is the moat, the regulatory moat of associations, MLS.
01:10:25
And then there's eventually going to be consolidation on the MLS and the associations. Yes.
01:10:30
So you mentioned the regulatory mode. I think about this as well.
01:10:34
This will obviously make you another pretty big acquisition target again. Is that the goal? You know, you've got another five, 10 year run and you build something of significance and then maybe do it. Well, you know, sometimes, yeah, I don't think I want, I didn't, I didn't, I, I didn't win the championship.
01:10:52
You know, I, I, you, I had to go through that to go to do this. Right. People ask me like, you know, I had, I had to go through an acquisition and, successfully do it and learn from my partners and learn from the person, you will learn more from the person, the person acquiring you has probably already acquired other people.
01:11:14
So do you, do you think you got, do you think you out negotiated when you, it's the first time ever? Yeah.
01:11:22
Yeah. You know, like I remember the first time I did a hard money loan.
01:11:27
I was terrible. I was terrible. I didn't know what I was doing. The second time I got a little bit better, third time I got a little better, fourth time I got a little better. Same thing with listings, right?
01:11:37
The thing about being acquired, though, we're probably only going to do it a handful of times if we're lucky, one time if we're lucky. Yeah, I would love to build something again that someone wants. Let me put it that way. Am I building it to be acquired? No.
01:11:55
Am I building? But then that, I guess I am because I would only build something someone wants.
01:12:02
That's it. Yeah. That makes sense.
01:12:05
Well, I wish you luck with that, man. That's a pretty exciting run. We're, uh, we're running somewhat sort of, uh, parallel paths here, and I'm going to enjoy watching them. Yeah. I'm noticing, though, from you, and I think you kind of touched on this when we were talking about Shep earlier, you've really gone pro on the content side of things. Like, you've decided to level up your game. Your post frequency is good. You are multi-platform. You're going hard with the authority stuff. Walk me through a little bit of your strategy there. When did you decide to go pro? Because, I mean, I've only noticed it probably for the last year and a half, maybe, but maybe it started before that. And so that's, like, the question is, like, A lot of times people don't notice you until they notice you. I've always known of you, but I really read every one of your posts now because everything you put out is fire. So now it's very much on my radar. many of which have been copy-pasted into an iPhone notepad because you're putting out some really, really good stuff.
01:12:56
But when did you make that decision? Because that obviously wasn't a big priority for you a few years back. Now it suddenly is. Yeah, it's like probably 2019. 2019, I started creating content for team leaders.
01:13:08
So that's seven years ago. Okay, okay. So there you go. Wow, seven years. So one of my friends is Morgan Housel. He wrote the book called Psychology of Money. Yeah, I love that book.
01:13:21
10 million copies sold. Okay. So, um, when he had sold about 300,000 copies, he was on the knowledge project with Shane Parrish, which I think is a Canadian guy, Shane Parrish, the knowledge project. And he was on, he was on an episode and it was his second appearance.
01:13:37
And I found him online. He had a blog on the collaborative fund and he had his email still on it. Right. It was Morgan at blah, blah, blah. So I emailed him and said, sorry, Hey, I would love for you to come speak to my team about money.
01:13:54
I was really fascinated with money. And he's like, yeah, I charge $25,000 to speak. And I was like, oh, how much would it be to Zoom in? And this was before Zooms were even a thing, right? And he's like, I don't know. I've never had anyone ask me this. Now, we would assume that today they have a price for Zooms. Yep.
01:14:17
He probably doesn't even do it at this point. So anyways, I said, well, how about $1,500 an hour, but I can only afford 20 minutes?
01:14:30
And you choose the time. And he said, sure, why not? He mainly said yes because he was interested and curious. So I paid him $500 for 20 minutes and we built a relationship. But what I learned from him was he wrote that book
01:14:46
It was only 300,000 copies at the time, which is massive, by the way. 300,000 is massive. It's still on a run today.
01:14:56
It's still top 10 in every airport. It's a kick-ass book, though. It's not just a good promotional cycle. It's a good book. Here's his story. He wrote for The Motley Fool for a decade. He wrote four or five blogs a day.
01:15:13
for like a decade. Then he started his own blog called his own blog. And one of the blogs was called Psychology of Money. Or it was like this longer. He did this one really long blog. It was like 26 pages long. And that became his book.
01:15:30
So I was like, well, you know, birds of a feather flocked. As soon as you start hanging out with someone that writes, guess what you're going to do? You're going to start writing. If you want to learn how to fly, go to an airport. Right. If you want to become a boxer, go to the boxing gym. Right. It's pretty simple. Right.
01:15:44
So if you want to build a team, hang out with team leaders. It's pretty simple. So anyways, I started writing. So I just started hanging out with them. I was like, okay. Every thought I had about team building that we have, every day, AJ, we're thinking, how do I build my team better? How do I tweak my team? How do I do my team? I just started writing about it.
01:16:01
And I did a course with John called Millionaire Team Mastery. Millionaire Team Mastery, 2019.
01:16:07
And with John Sheplak, we marketed the heck out of this course. One person bought it.
01:16:14
I was so embarrassed. I was so embarrassed I refunded his money. Okay.
01:16:21
We relaunched that. I wrote content for like four years straight.
01:16:27
We relaunched the course and sold a couple hundred.
01:16:30
Same content, same everything. Because you had trust with the audience.
01:16:35
And the other thing is I'm relaunching that course now called I Will Teach You How to Build a Real Estate Team. the same course, just a new name. So I don't know the principle of that story, AJ. Like, it was just that repetitive content.
01:16:53
And I also learned this from Morgan, and I learned it from John Sheplak, is Morgan told me, he learned this from Jason Swagg, how do I say the same thing differently?
01:17:06
Not how do I say something new? So content is about repeating yourself. Yeah. John talks about recruiting.
01:17:15
Discipline.
01:17:17
Hasn't changed it. And people eat it up and they love it. And the thing about it is I've watched John over the years. I've heard him say the same speech probably like a dozen times, but each time it gets a little bit better. It's like Tony Robbins and that dang Thanksgiving turkey. You ever heard Tony Robbins talk about that Thanksgiving turkey? Oh, of course, of course. If Tony Robbins was in my office and he started talking about that Thanksgiving turkey, I'd listen.
01:17:45
It's like listening to Brian Adams or your favorite band. You'll listen to this song again. It's so easy to get caught in the trap of thinking you have to constantly reinvent yourself. I'm the worst for it. If you look at my Instagram feed, there's literally no duplication of the same message. I'm trying, and that's also what holds me back from putting out a large volume of content, Because I'm constantly trying to figure out some newage to share with the audience. But the reality is you need to say the same things. Because my team is successful not because I give them something new every Thursday. My team is successful because we drill the fundamentals into them. And, yes, there's some newage, but it's like three-quarters repetition, one-quarter something novel. And I think Hermosi says it really well. He says, you will get bored out of your content way before your audience will. So just keep saying the same thing. Oh, my God.
01:18:33
The other thing, too, is unless you're... You actually don't get feedback on your content.
01:18:40
You do not get feedback. And when you do, it's way too late. It's almost like if you started doing postcards in your marketplace. Say you started doing postcards in your marketplace. You're going to stop before you get a listing.
01:18:52
And then you're going to get a listing and go, why did I stop doing postcards? So what happens is there's a giant divide. And so... My content, nobody likes and nobody comments and nobody shares.
01:19:09
They read it. But the algorithm, the algorithm doesn't tell you when people read it.
01:19:16
But you think the algorithm knows that you stopped and you hit read more and you stayed there? Of course.
01:19:24
Of course it does. It likes that more than anything.
01:19:27
It likes that more than it'll like. So I call it writing into the void. I just write into the void.
01:19:35
But you know who you're talking to.
01:19:37
You know exactly who you're having a conversation with one person. You write into the void, but I can tell when you write, and sometimes it feels like it's me that you're talking to, but you are talking to one person with one very unique set of problems. And you've got that in your minds, I will, because it's consistently at that one avatar, I can tell. I stopped telling people what they're doing wrong, and I just started telling them what to do.
01:20:05
Chat to EBT and these different things, they like to do pain something solution, and it's kind of like, here are the things agents are screwing up on. Here are agents screwing up. Team leaders are making this mistake. These are the common reasons team leaders, and it's like, I don't want to read that.
01:20:25
I want to read what works. I just do a lot of how-tos.
01:20:31
Here are the three comp plans. Here are the three legions. No fluff on it, though. For me, I like when someone who's writing respects my time. There's just no fat on your content, which I like.
01:20:45
I was thinking about when we were talking about reinventing ourselves. I've probably done, in the last five years, I've probably done 40 keynotes and
01:20:54
I have never repeated the same keynote more than once. I have never got an additional rep on a presentation. The only presentation in my life I've ever done multiple times is the one that promotes the info night to come join my broker. Just literally the only presentation that I have done multiple times. You're probably really good on that one. Nailing it. But why do I not have even just three that I recycle and get really good at them? Because it's in the reps, right?
01:21:19
Yeah, totally. You need a keynote that someone's going to pay you $5,000 or $25,000 for. Yeah.
01:21:25
and they want you to come present that one. I was listening to a mentalist, Oz. You know this mentalist, Oz? Love this guy. He has his go-to tricks, and he will only come up with new tricks if they hire him again, because he does private parties. I remember being at an event with Sunit, and Sunit is a great speaker, and
01:21:51
We have the same aha moment. We're like, why are we coming up with new content every time we get on stage? It's ridiculous.
01:21:59
It's ridiculous. So what I started doing when I have a speech is I will do a webinar.
01:22:04
I will run a webinar and I will at least practice it on the webinar. Minimum.
01:22:11
At Reside, we would do, I was on most of the discovery calls on Reside, so
01:22:17
And we got the reps. So I got hundreds and hundreds and hundreds and hundreds of reps. Yeah.
01:22:24
Uh, and yeah, so you're, you're right on the money, right on the money. It's like that for a buyer's presentation or a listing presentation too. If you're doing the same one, don't reinvent it. Just get masterful at that one presentation. Don't go off script. Just get like, have a few really nice sound bites for each slide and you're just smooth with your transitions. and all of your little segues are just right on the money, and you know exactly when to pause. You just get it, right? And if you're constantly trying to change what you're saying, you just never get the feedback loop. So, yeah, no, that's cool. Listen, we've been jamming for a minute. I do want to get your take, though, before we go on AI. You've mentioned it a couple times throughout, so I get the sense that you're definitely switched on. How do you see it?
01:23:05
There's a sliding scale from it's not going to be of much consequence to real estate to it's going to completely disintermediate us How do you see it affecting our business at a macro level, and how do you see it more on an individual agent level making change or affecting their business over the next, say, one, two, three years? Well, on the macro level, I talked about it at Team Growth Brokerage.
01:23:32
It's going to reduce the cost to do compliance, oversight, transaction management, and documentations. That's going to evolve into the agent in the field being able to write an offer in real time from their phone that will be able to be sent out and signed. And then when it's signed, delivered to the other agent or when it goes under contract, upload it. Or when a listing agreement is signed, it's going to take that TC work, a lot of that TC work out.
01:24:01
Right.
01:24:03
And dual entries will go away or to meet the regulations that's going to go away. So I think that should increase the margins for the team ridges and the brokerages.
01:24:12
There might be some ability to scale off of that or just reduce some labor costs. If it does help the agent, it was going to lower costs, lower costs.
01:24:26
So I see that with the AI world. I really think it's going to be, unless the MLS says you can't use AI agents agentically, I think the AI is going to input the whole listing for you. I think it's going to draft the entire listing, write all the remarks, put all the data, find all the information, and then the human is going to review it.
01:24:49
Yeah, it's going to connect to your drop, you know, your photographer to take the photos, he's going to put it in Dropbox, your Dropbox API is going to automatically upload the photos and put them in the right order in your MLS, in the input, describe the photo, do the 3D tour, put that as a reel in the MLS. So I think the listing input and the transaction coordination side is the first thing to go away or improve massively, improve massively. But I think what we need to do is we need to really get...
01:25:19
granular and specific on the agent's duties on the paperwork, you know, and really get that dialed in. But as far as the agent uploading or doing any of that stuff, I think that's all going to go away. Yeah, I would agree. And then you're going to have some human curation over the top of that. The first thing agents get to when they think AI, the first thing they think about is like, how do I convert leads?
01:25:43
Like they go straight to the dollar productive activity. Should be the last thing you give away, right?
01:25:50
Yeah, so I think what we need to do is we need to use AI on all the non-dollar productive activities so that we can view the dollar productive activities. Because if you try to replace yourself on the dollar productive, guess what? We're really hosed. For sure.
01:26:06
Right? And so I think you just use AI to attack the non-dollar. That's what I'm doing. That's why when my next business wasn't an AI CRM
01:26:18
an AR lead conversion, an AR marketing machine. I mean, I totally could have, right? But I wanted to get away from that because regulations don't change.
01:26:30
So that's where my mind is on AI.
01:26:33
Yeah, I'm of a similar mindset. We're looking to sort of agentically take a lot of the task-based stuff away from... We have an amazing administrative team, and I don't want to shrink that team at all, but I want to give them an unlock of a 2, 3x of their bandwidth and give them obviously more job satisfaction too because they'll be working on things that they find more interesting than just the same old button pushing they've been doing. And so I think what ends up happening in a sort of agentic world is that you know, you've got human in the loop, but you have these processes that have essentially all been now directed to AI. And now the human is overseeing that. And then they now have increased capacity to work on project-based stuff. That's all the, you know, non-critical, but super essential stuff that you as a team leader or business owner wishes we were progressing faster. But of course, you're so busy doing the do, there's no time for this.
01:27:25
So now these projects start to move along and they can actually handle more deal flow because they're kind of only handling the tail end. So now we create opportunity for them to make more money because let's be honest, with inflation going the way it is and with our margins being compressed over the last few years, I mean, not only are team leaders being boiled alive, but the staff within those brokerages are feeling it as well. Their cost of living has gone up. We need to find a model. We need to increase the margins so that we can all afford to eat. So I think that that's how I see it. I'm also working on a...
01:28:00
It's going to be an entire platform, I think, to manage everything I have, but it's more of like a CRO, like an AI chief revenue officer. So there'll be a marketing component that'll analyze all the marketing KPIs because we're just so long on data but short on intelligence on some of this data because it takes so much effort to go back and look through and check all these numbers. So I want to be spotting trends on the marketing side, like seeing cash flow conversion cycles and seeing cost to acquire and all these different things. Then there's a sales management component to it. where it's knowing on an individual level which of your agents are killing it in certain areas but maybe could use a little help in others. And then it knows in your learning management system which of your videos or modules would be the perfect accompaniment to whatever challenge they're having, and it's suggesting that to them. And then similarly with the inside sales, it knows that this ISA tends to do really well with this lead type and vice versa.
01:28:58
So it's just seeing around the corner. And I... To me, I think that that has the potential to be a big unlock as well as just to have this like 180 IQ brain combing through the data and providing us with actionable intelligence.
01:29:13
Yeah, I can see that. I haven't ventured down that route, but I do see our people staying on and if they have the capacity to work on project-based stuff, whether that's in the real world projects, events, past clients, touches, also experience. I think there's going to be opportunities to pivot towards, I'm actually pivoting more to something like meta for advertising. If I'm investing anywhere in my marketing department, I'm putting a team member in some like go high level HubSpot, Salesforce, or like thinking like a true ad manager. So we...
01:30:00
We traditionally have put people in a marketing position and that meant content, creating images and photos and drones and walkthroughs and that got into Canva and announcements. But then we had this content delivery problem. I think AI is going to give us that content delivery problem. And then furthermore, the human is going to be the ad manager or actually understanding the ads of it because they're going to be controlling the budget. And I think AI will be able to create the ads and the ad managers for you too. But I think what you're going to do is you're just going to give Facebook what you want and it's going to find the client for us. It's not there yet, but it's getting there.
01:30:43
It's getting there. It's good for like CPG brands right now. Like if you have like a skincare line or something, it'll come up with 50 different ad creatives that are actually pretty good. But I've not yet seen anything like from any of these because we test. And I'm a partner in a multimedia company called Navigator, and Rob is also testing. And we're both looking to crack this code. But the real estate, the AI split testing stuff that it's doing, it's just not there yet. It doesn't quite know how to... pick the right photos for the house. It doesn't quite know how to, you know, the nuances to it. So it'll get there. It's just, you know, it's the worst that it'll ever be right now, but it's not there yet. You probably burned through a lot of cash. You probably burned through a lot of cash on meta ad manager right now, trying to find a buyer and seller. Yeah, you would. There's this guy I follow on, on Instagram is his handle. It's realtors hate me. I don't know if you're familiar with him, but he's, yeah, he, he posted something the other day.
01:31:32
He's creating a platform for, that essentially has broken down what he believes the agent's role is or value into these different bits. So there's like the marketing component and it's all prompting based. So you would, as a for sale by owner, go to the platform and type in, you know, I have this type of house, give me a marketing plan for it. And then it would walk you through the document uploading and the data input. And then it would give you, you know, when you got an offer, there'd be a, you know, offer contract review process again, like what we're talking about. And then there's a negotiation widget where you can go in there and you can, go back and forth and it gives you negotiating strategy. And then it's got a checklist, generates a checklist. And then you've got someone that you can, anytime there's a problem, it problem solves for you. Essentially he's saying, here are all the components of an agent. We can do this all via these different, essentially custom GPTs that he's created for each of them.
01:32:21
And I think he's the first of what I believe will be many AI first AI
01:32:28
attempts to kind of disintermediate us again. It seems to be kind of the flavor. Every seven to ten years, there's a new tech or a new thing that's going to get rid of realtors forever. How do you see it going in that regard? Do you think that there's an existential risk with these AI-first companies coming and compressing margins and getting rid of agents? Do you think it'll be only the strong survive, the ones who still have a real value proposition will survive? What do you think happens over the next five years? Well, as long...
01:32:58
as long as an agent can make $10,000 on the sale, there's going to be a lot of agents because it's, it's a pretty good risk reward to spend $500 on a license and make $10,000 on that 500.
01:33:11
So like as much as we don't like part-time hobbyist agents, as long as they can still make one deal and it covers their license every two years, there's going to be a lot of agents that are willing to,
01:33:24
You know what I'm saying? That's just so far from how I see the world that I just. I know that because they're not running up. They're not actually running a business.
01:33:32
They're making a little extra money. Yeah. Side hustle. Yeah.
01:33:36
And so as long as the consumer is willing to hire their friends or family or hobbyist, and they will because of guilt and shame, and the human mind isn't going to just get rid of like, oh, this is going to be awkward if I see AJ at the gym and I didn't hire him. But it becomes socially acceptable not to hire an agent like that. That's one thing. Where I'm thinking long-term future here is there isn't going to be a compression on commission. There will be.
01:34:07
And we might be able to withstand that longer because we have so much more value and we're going to probably make a ton of money. A ton. Don't get me wrong. We're not going to be... When it finally hits, we're fine, AJ. We're fine. But let's say commissions do compress.
01:34:25
I don't think our revenues go down. I think there's a world in which our revenues stay the same or go up, but we just don't get paid the same way. And they've been saying it forever. I call it rev capture. So rev capture is capturing revenue that's outside of commissions other than anything other than commissions primarily is going to be service.
01:34:48
So what, what services can you provide? And that could be staging. It could be home services. It could be,
01:34:57
advanced marketing. It could be a latte every Monday. It could be an open house. It could be a fee-based system. I think there's a world in which there's a fee plus commission-based system, right? And I think someone like us, people like us, I think we can actually increase our overall revenue with that. We just don't have the people to do it yet because they're too busy inputting listings, right?
01:35:23
right but what happened what happens if our people aren't doing that people will pay for experience you don't think they would pay for an event they would pay for an event we're only doing free events you don't think they would pay for staging or they pay for uh window washing or home prep or listing prep we just add it in and the primary reason i believe we we aren't getting paid for other services is one we just bake it into the commission
01:35:50
But if our commission is going down, we're not going to bake it in anymore. We're going to be like, what the heck? No, I can't bake it in anymore. So I'm going to have to have a way. So here's what happens. I'm going to have to have a way to bill for it and collect it.
01:36:03
So I call it rev capture. It's the ability to invoice your client and get paid by your client. Now, most states, and I don't know if it's the same in Canada, the agent can't touch money unless they have a separate business. They can't touch it.
01:36:18
So the brokerage is going to have to have a way for the consumer to pay for things other than commissions and they don't want to deal with that right now. So I'm building the technology now just like a Venmo, just like a Venmo or a, or you could get QuickBooks and do it, but it needs to be trackable and needs to go to the brokerage and it needs to be paid out to the agent. Like if your agent could get an extra thousand dollars for doing a weekly drive by,
01:36:49
I'm just making this up. Or logistically hiring a window cleaner and a handyman to do some repair work. To manage a remodel project of $100,000, you should get paid 10% or 20% of that project.
01:37:03
You're not a general contractor. We GC stuff all the time for free, don't we? I was doing that for 20 years. Oh, yeah. Bringing in all my... All my subs and going in there, doing the design, telling people what they should do, not do, bringing all my best people in there, dealing with the conflict if there was ever any concerns, like literally doing the GC role for pro bono. I hear you. Actually, you mentioned home services. We're starting Vantage Home Services now. We've been running a little mini contracting business that does a half a million a year. It's been pretty small for the last five or six years, but now we're at the size now with 1,600 doors under management and selling hundreds of homes each year that it would make sense for us to have this ancillary business. So Vantage Home Services is being born in real time right now. So I agree. I think it is going to come down to capturing more revenue. Pretty cool of you to see around the corner and to position your brokerage in that way. I think it's cool what you're doing, man.
01:37:56
I love it. I'm excited to watch you do this and build it. Yeah. I was inspired by people like you. I remember there was a mastermind. I forget what it was. It was in Napa. Remember this Napa mastermind? Yeah, that's right. Frank put that on, I think. Frank put it on. Actually, you weren't in my world view at that point, but Frank's like, AJ's coming.
01:38:20
I'm like, okay. He's like, oh. No, but it was like,
01:38:26
And then I heard about you, and I found out what you're doing. I was super, super impressed way back then, and ever since then I've been following you. So, yeah, good for you, man. I'm excited to see what you're up to, and thanks for having me on. I'm sure you'll have to pare this two-hour behemoth down a little bit. I don't know, man. There's not really much fat on this thing, just like your business. Just like you, man. You're in good shape. Are you doing an Ironman or something? What's going on?
01:38:50
Yeah, so I had a 50-mile bike ride race last weekend, and then this weekend I have an 85-mile gravel race, so I ride bikes. Good for you, man. I like that you find time for the family, for your fitness, and for your business, and you've got big dreams, so you're my kind of guy. So I enjoyed chopping it up with you, buddy. Let's do it again. I appreciate you.