If your business requires you to have an active role in its day-to-day transactions, it becomes your job. Business owners should aim to build a business that they can one step away from and will generate long-term passive income for themselves.
Brian Charlesworth joins Jeff Cohn, Owner at kwELITE, as they talk about building businesses that will eventually require minimal active participation from the owner, how Sisu plays an important part in achieving that goal, and how to ensure brokerages thrive in the future by expanding into ancillary businesses.
01:49 What Jeff loves about Sisu
07:29 Jeff’s greatest passion
11:05 How true leaders serve
11:48 Why he launched The Team Building podcast
13:19 What the Team Building Summit is about (and how to get $100 off on tickets!)
24:00 Three ways for individual agents to win
25:39 The evolution of ownership
26:48 Where is the industry going in the next five years
29:54 What brokers need to do to survive in the future
32:29 How to make consumers convert to using your ancillary services
33:22 What can small team owners do to start building ancillary businesses
35:58 The magic of getting agents to support ancillary businesses
37:43 The role of future agents
Get in touch with Jeff Cohn
Podcast: The Team Building Podcast
About the guest:
Because of his early entrepreneurial aspirations, Jeff Cohn owned and operated many enterprises and earned his Eagle Scout award - before he finished high school. His two years spent working as a missionary in a remote part of Brazil served as an added proof of his tenacity. He then took up Business Administration with an emphasis in management from the University of Nebraska at Omaha.
Jeff got his real estate license right out of college in 2006 and spent his first six years selling real estate full-time. In 2011, he made more money than he had ever dreamed of, but he realized he wasn’t living his best life. He was spending too much time in his active role that he didn't have much left to do anything else. He learned that if he fired himself and replaced him with ten more people to do his role, he could make more money with less time and energy.
In 2014, Jeff stopped selling and built a team called Omaha's Elite Real Estate Group. The team grew from 70 to over 700 transactions a year in 6 years and was the #1 team globally at Berkshire Hathaway HomeServices in 2019.
Today, Jeff is a nationally renowned speaker and host of The Team Building Podcast. He is also the CEO of a tech-powered Keller Williams market center in Omaha, NE. His passion for providing exceptional service to his clients propelled him to establish ancillary businesses in Title, Mortgage, Insurance, and Investing. His objective is to expand these ancillary businesses into 100+ locations across the country.
Brian Charlesworth 00:36
All right. Hello, everyone. And welcome back to the Grit Podcast. I'm Brian Charlesworth. I'm the founder of Sisu, where we streamline and automate your entire business if you're in real estate. And if you haven't checked out our new client portal, make sure to do that because it'll change the way you communicate with your clients forever. So to do that, just go to our website Sisu.co and request a demo. Or you can look at a recent blog that we put out. So welcome back to today's show. Super excited. Jeff Cohn is with us today. He's in the house. And Jeff, I used to spend a lot of time with Jeff and I haven't spent a lot of time with Jeff since COVID hit so he came out and visited me about two years ago, and checked out our new offices at the time. And since I haven't spent a lot of time with him. So Jeff, at that time, you were making the move over to kW from Berkshire. And maybe you can just start right there. We'll dive into all these questions, elevator speech. Thanks for joining us on the show today,
Jeff Cohn 01:35
Super excited to be here, Brian, obviously, you and I've had hundreds of hours of ideation over the last couple of years. And I have a lot of respect for you, as a CEO, as a founder, as well, as a visionary when it comes to technology. And I think what you've done with Sisu is fascinating. What I love so much about it is it's not just real estate specific, every business in America needs the Sisu solution. The younger generation demands it, we have to quantify and qualify everything, rather than using a quote I came up with a couple of months ago, “inspect what you expect, or expect what you expect to never happen”. And so many of us expect something, but we do nothing to follow up with that expectation. We don't train our people to do the thing, we want them to do better. We don't hold them accountable to doing that thing better. We don't track if they even did it. And we expect to have change, which is obviously the definition of insanity. How many people can listen to what I just said and say, yeah, that is my biggest problem. So you built a product that takes care of all of that as long as you use the product, no different than any other tool that's out there. And for me, my big belief in anything I do is that it needs to save time and money. So if it's not saving people time and money, then there's no point in doing it. And there's a lot of tech out there, that's cool. But it doesn't save people time and money. What Sisu has done so well is it has removed the need of having an operations manager that you pay 50 grand a year, and now your admin person making $15 An hour can simply put some inputs in once a day for five to 10 minutes, and you just removed 60 grand a year costs. And you've empowered your team to have so much more data. So obviously, I know you talk a lot about the product. I'm a pretty big believer. So when I met with you, we're in Salt Lake and your office is just outside of Salt Lake and I was getting ideas for our new office, we were building what we call pre COVID, a hybrid tech powered office of the future. And it's a residential real estate office. But it wasn't built with that in mind. It was built as a technology company that offered We Work businesses space to rent that created cliche word synergistic relationships, and so translation into we wanted a real estate office with all the ancillaries in one place. And we wanted to give the consumer the ability to choose if they wanted to go to that place physically or virtually, six months later, COVID hits and the whole world falls apart. And I'm laughing to the bank because people are like, wow, how are you dealing with that? Are your employees coming into work? Are you letting work from home? We said they have always been able to work from home if they want to work from home like it's all virtual if they want it to be virtual, or they can come into physical space. Same thing with a consumer, what's the consumer doing? Well, they're coming on to zoom calls. Well, how are you guys doing that? All of our rooms already were pre wired with aver sound bars and kept computers and zoom and big 55 inch flat screen TVs like we had prepared for the pandemic, pre-pandemic because we believed that was the future. And the pandemic has just simply accelerated our advancement in our adoption of technology by 10 years. Yes, and it couldn't have been a better time for us. So I went from 30 agents to 150 agents over the last two years. That’s 500% growth and amidst a pandemic and political unrest, which is pretty fascinating. But the biggest success and where I spend a lot of my time and why we haven't talked for so long. My time has been my one thing has been expanding ancillary businesses because I believe the commission is under attack. And I think as commissions go down across teams and brokerages across the country, a lot of agents are going to struggle to know how to make money. And so my solution to that problem is joint venturing with brokerages and big large agent teams in mortgage, title, insurance and investing products and then providing them the training platform to help all those people be successful through real estate systems, and then holding them accountable. And then providing systems and strategies including marketing, lead generation lead conversion, contractor closed services. So I still have a role, but it's more of a passive role with the real estate arm of things. And a lot of my time and energy has now been going into how to use save the industry that I think is under attack when it comes to commission.
Brian Charlesworth 05:20
So Jeff, the one thing I didn't say in your intro, and something that's always impressed me about you is you are the king of knowing how to work on your business instead of working in your business. Like you always know how to hire the right people, make sure your businesses are growing and scaling without you having to be in the day-to-day, which I appreciate that. That's one of the best talents anybody could have. Because that's what's allowed you to build so many businesses like you have so 100%
Jeff Cohn 05:45
On that, yeah, and if for anyone listening to me for the first time, just so you know, where I came from in ‘06, I got my real estate license out of college, I did an undergrad in business. I spent my first six years selling real estate full time, I went to war, you know, I was a Navy Seal of real estate, I fought the battles and put signs in yards and put lock boxes on and negotiated contracts and listed houses prospected and dealt with deals over the weekend and midnight and all that stuff. And in 2011, I was making money I never dreamed of. I was on, I'll share it, I was getting 350 a year and I was in my late 20s. But I wasn't living my best life, I was spending too much time working in an active role. And you just talked about how I was able to convert into passive, but it's taken me a long time to learn how to do that. And I learned that if I fired myself and replaced 10 more of myself, I could make more money in less time with less energy. And it took me a long time to learn how to do that the first time, but then I did it again and again and again. So in 2014, I stopped selling and I grew a team called Omaha's Elite Real Estate Group from 70 to over 700 sites a year in six years. And we were the number one team in the world at Berkshire Hathaway, and 2018. And then we caught the attention of Gary Keller, who was the first billionaire to ever reach out to me and say, Hey, you wanna come hang out? I was like, Yep, I would love to do that. So we went up three separate times. I went to spend some time in Austin. But you have to remember and I'm glad I shared before what I'm doing now. My whole focus is how do I expand this ancillary arm all across the country across all brokerage brands, I never was married to one brokerage per se, I'm agnostic to brokerage brands. And Gary obviously shared with me some strategies of how I could implement his same strategy and helping to scale and helps you know, the real estate industry. And that's what we've been focusing a lot of our time on. But to your point, because of leverage, I can continue to focus on the things that I'm passionate about, I can get on podcasts like this, this is what I want to do. I didn't get paid to be here today. But it's what I enjoy doing, you know, hosting events is what I enjoy. Focusing on technology has been one of my probably my greatest passions, thinking about what the world is going to look like in 10 or 20 years from now and then starting to make changes today to pioneer and pivot to accelerate our growth. And like there's a lot going on. There's a lot to talk about. That's exciting, exciting times to be in the business.
Brian Charlesworth 07:45
So I want to go a little deeper on these expansion businesses. So are these ancillary businesses, which are also expansion businesses, because you're building your ancillary through expansion? When you talk about ancillary you're talking about mortgage title and what else?
Jeff Cohn 07:58
Yeah, so to be specific, semantically, I'm talking about building an ecosystem where we serve anyone that's in our database. So anyone who's ever bought, sold, referred business to you or anyone you think will ever buy, sell, refer business to you should be in the database. And you build a relationship with your database by communicating to it and you communicate it to it by sending a mailer, dropping a voicemail calling, texting, emailing, hosting events, there's lots of different ways. So when I talk ancillary, what I'm saying is actually, I would like to partner with every type of business, it can be residential real estate, could be any industry and engage with our database and build an ecosystem where they buy products that we make available to them. And they choose to buy those products because they know us, they like us, they trust us. This is no different than when someone banks with Wells Fargo, and they get their mortgage with Wells Fargo, they now put their checking account with Wells Fargo, they put their savings account with Wells Fargo, they refi their loan with Wells Fargo, they get their insurance through Wells Fargo, we want to be that solution to the consumer. So first and foremost, the first Domino's would easily be the obvious ones that point of sale, when someone buys a house, they need a mortgage. They need property casualty insurance, and they need title. But that's the path of least resistance. The thing that people take for granted, the people listening to the call today, most are agents, they make commission one time that's an active role active as your job passive is your legacy. Active is your job passive is your is your long term income without you having to be necessary without you having to doing anything, that's a business. If a business requires you to have an active role, that's a job inside your business. My goal has been to own everything and have no active role in anything. So that's under that my job. My goal has been to have no active job and just have passive ownership of everything. And that's whatever.
Brian Charlesworth 09:38
That's exactly my observation, Jeff, which is why I said you're the best I know at just working on your businesses instead of in them.
Jeff Cohn 09:47
I appreciate it. Yeah, it's hard. You know, it was hard for me as a top agent. I was the number one agent in Nebraska for 10 years. And it's fun and that's who I was. And so to remove yourself, you have to lose your identity, as that thing you've created, and a lot of us have created this monster we can't get away from. Our ego keeps us in it or we validate who we are because of the success. And I know you've exited a large multimillion dollar company in the past. And I know your identity changes a little bit. You have to like rediscover yourself. And so for me, I always had to define first, what do I love? What am I passionate about? What do I want to wake up in the morning to do and when I stopped wanting to go on a listing presentation, I removed myself when I stopped wanting to make prospecting calls to remove myself when I stopped wanting to do coaching calls every day, I removed myself, but I found replacements, and are the replacements as good as me in some cases, they're much better. In other cases, they're not as good, but they don't have to be you no one else in the world like you. And that's okay. And understanding that recognizing that I think is key to being able to move on to the next big thing. Okay, great.
Brian Charlesworth 10:45
So, Jeff, if I'm out there right now, I'm going, I would love to learn how Jeff's done this. So you're having an event? Yeah.
Jeff Cohn 10:55
So we show everyone everything, you know, I started a podcast in ‘15 Brian, and I know you and spring were able to come out, got to spend some time with you guys in Omaha at one of our events years ago. And I always had a big belief that true leaders serve their followers by giving them the ability to be just like them. Well, I started to learn that as a leader, I had to improve myself to be able to give the people that followed me more value. And the way that I did that was no different than everyone listening. The difference between you and me are the books you read, or listen to the podcasts you listen to or watch. And the people that you choose to associate with and mastermind with. That's what changes who we are. And I wanted to become better. And so I started focusing tons of time and energy on visiting top teams across the country, real estate teams and being with thought leaders like you people in the tech space and understanding entrepreneurial ventures and formulas to success and systems and strategies and culture and leads and lead conversion. And I became crazy, right, obsessive. And with that we organically launched a podcast and 15, The Team Building podcast. And my reasoning was I was unhappy with the questions, people were asking their guests on podcast because those questions weren't pertinent to me. Because a lot of other real estate podcasts that existed were teaching people how to have active roles, I wanted to hear people talk about how to have passive roles in real estate. And so the thing that kind of started shaking stuff up was I started going in front of audiences and saying, My goal today is for all of you to quit being a real estate agent, and start building a real estate business that can grow without you being necessary. Who in the audience would like that show of hands. And 90% of people raise their hand, the other 10% of the people like selling real estate, and there's no problem with that, if you like selling real estate, I didn't like selling real estate, I like making money. So that turned into us launching a coaching company. So on the heels of your question about our upcoming event, what we wanted with the podcast was to be able to interview top people, including yourself, Brian thought leaders, industry leaders, broker owners and team leaders, so that we could identify what are the best practices today that apply to us and we will implement in our backyard that's in Omaha, Nebraska. And I'm sure other people would love to listen to these conversations like the one today and apply those strategies in their backyard. And it's complete abundance. I don't care if my own competition in my own city takes these ideas and runs with them. Go do it. Because I know how much time and energy it takes to get to this point. So I'm not worried someone is going to do it. If they do good for them, they should do it. Why would you not do it? We were the fastest growing team in the world. Like why would you not follow the system. So with that, we launched a coaching arm. And with that coaching, we started to discover that people wanted to come hang out with us. They wanted to be coached by us. They wanted to come to events, they wanted to be trained. And so four years ago, we launched an event that's once a year. It's the one of a kind called the Team Building Summit. And the idea was to bring together thought leaders, broker-owners and team leaders from across the country for two full days in downtown Omaha, Nebraska when the weather's nice, the city sexy and alive. And talk about real estate, talk about ancillaries, mortgage, title, insurance JVs, Sisu products, how the industry is changing, what's changing, like, I just read an article yesterday that rents and just Omaha, Nebraska up 9% Some places are almost 30% on single family. And so this conference was intended. It's not a coaching conference, it's taking thought leaders and implementers and people from across the industry and putting them on the stage for 45 minutes. And we are going to have Brian and his wife spring, come and speak this year. They have an amazing session planned for us. You want to talk a little bit about what you're going to talk about Brian.
Brian Charlesworth 14:08
Yeah, I mean, we're super excited to be there. You know, Jeff, we came out to your event, I want to say it was three years ago for the first time. Spring, Sisu was just launching, Spring was I think doing round 200 150 200 transactions a year or something like that. And you know now Sisu has has 2800 teams and Spring has. She's doing 1000 transactions. So she's.. how did we get from there to here and three years? That's what we're going to talk about.
Jeff Cohn 14:39
Absolutely, man and you guys have done amazing things. I love seeing that scalability and for someone that doesn't want to have to scale in numbers. I know a lot of people that talk teams think to grow you have to add agents or you have to add listings. There's a lot of other things you can do to change the goals for some isn't to make more money, some is to get more life back. And there might be a tiny little shift in what Brian has to share at the event. That includes implementing Sisu and different strategies around Sisu. That could allow you to have a two person three person team, you don't need to have a mega team and make more money, less time, less energy, maybe work half the amount of time and make twice as much money. And a lot of people say, Yeah, that's what I want. I don't want to have 100 agents, I'm babysitting, because scaling is not easy. It's hard work. You break stuff. The only way to grow is to break stuff and fail forward. And so I think the event also represents this opportunity for people to be a little bit more introspective, and ask themselves, what do they want to be when they grow up and what changes need to take place in the next 12 months to five years, to be able to become something new. On the top right corner of the Millionaire Real Estate Agent book that Gary Keller wrote over 10 years ago, it says it's not about the money, it's about being the best that you can be. And I've actually challenged Gary on the word being because semantically, it is just an inexistence. It's not a word that describes someone's ability to change. And so I changed it to becoming. It's not about the money, it's about becoming the best you can be. And I have found my greatest pleasure, satisfaction, happiness in the journey of becoming, not in arriving if you if one can say that they've arrived in any capacity. That's not fun. The fun part is…
Brian Charlesworth 16:12
You have arrived, you are done. So yeah, I don't think anybody wants it to be over.
Jeff Cohn 16:17
You don't want to arrive, you passed the finish line. What's the next race? You know, David Goggins talks about this, what was the book Winning by Mark Grover that talks all about Jordan and Kobe. He said, Every time that they want a game, true winners, they win a game and they're like, no when is the next game. It's like when I get off of a stage or a podcast like this, and I'm like, Dude, I just frickin crushed it. You're only as good as the last time you showed up. Right? And like, the fun is that is presenting the fun is the doing. It's the building. It's the growing and all of us compare ourselves to somebody else, your dad, your brother, your uncle, your friend at the office, this guy you grew up with, it's a trillionaire. None of that matters. All that matters is who are you today versus tomorrow? Versus yesterday? Are you becoming something more? Are you better serving the people that follow you? Are you becoming a better version of yourself in every aspect, every area. And that's been my mindset. And it's interesting that as I've implemented that formula in my life, it has impacted other people. Thankfully, the changes I've chosen to make have also affected hot for the positive other people. So the goal of this podcast wasn't to just promote the event. But of course, But of course, we do want to invite anyone listening to come check it out. We have a special code, Brian, haggled with us. So got you guys $100 off. We're breakeven on events. A lot of people don't know that. I know, Brian, you know this as well. But most of the time people lose 50, to 100,000 hosting events, our goal is break even with our sponsors, and see sudipto choose to sponsor this event, we're very grateful for that. So there'll be there. But the cost is normally 397. With 100 off, it makes it 297. So just use the discount code: PODCAST, since that's where you heard about this, just put in P-O-D-C-A-S-T, and it'll give you guys $100 off, if you want to come hang out, it's June 1 through the third. And you can find more information about it @growwithERS or TheTeamBuildingSummit.com.
Brian Charlesworth 17:57
Okay, and one thing I want to add to that, Jeff, I know just from being to this event a couple of times, you are not just focused on how you build a real estate team. This is like, how do you do whatever you want to do as far as building any business and you know, getting your life back?
Jeff Cohn 18:12
So 100% Yeah, it's a lot. People say they feel like they're drinking from a firehose, and the goal there is to truly inundate everyone with so much information that they're like, how am I going to implement this over the next couple of months, and you're not, this is a lifetime, right? That's why I talked about the race, there's no finish line. And so we invite everyone to participate in our coaching product, which is $997 a month, we give you a special six month discount that's 50% off for the first six months if you come to the event, to test out Elite Real Estate Systems coaching product, but we coach teams, the thing that's really unique, and I didn't even share this with you offline, Brian, but we've started coaching brokers that own mortgage brokerages, insurance agencies, title companies, real estate companies, marketing companies, and investment companies. So we have a product every week, the CEO of each of those businesses that are all located in my office here in Omaha that I'm in right now, do a coaching call for 500 bucks a month. So a mortgage person joins them all the agents, title insurance, all the other companies get access a real tour joints, all their ancillaries get access. And so to your point, it really isn't just about oh, how are you gonna go sell more homes are recruiting for agents while it is that it's also what's the next step? From a perspective of a person that did it? There's so many people out there that claim they know how to do something. And I'll ask them, tell me about the team you exit how many agents were there? How much revenue Did you generate? What ancillaries Did you own? And there's a lot of coaches, I would say 99% of them in the country today that have done none of the things that they're teaching people. So that's like a Navy SEAL someone that claims to be a Navy SEAL that went into battle that never went into battle. And I'm seeing that more times than not. So I think one of our claims to fame is the fact that not only did we do all these things, we are currently doing them. So when we launched kW with 30 agents, I said we're now up to 150. We were at about 650 700 transactions a year. Last year we did over 2000 We had about $500 million in sales and we're growing we think that we'll hit over a bit Lean this year in 2022. And no one needs to grow at that rate. But the fact that we're growing like that, amidst all the stuff going on right now, I think is a testament to the fact that we are using systems and strategies that work and systems and strategies that we have proven work in other markets as well. So go check out the teambuildingsummit.com, Use Discount Code: PODCAST. You’re going to see Brian speak, he's gonna do an awesome job. I'll be on stage as well. Everyone speaks quick. It's like 30 to 45 minute sessions. All day long. We do stuff at night to the event includes breakfast, lunch, some snacks at dinner drinks. We do a silent disco. It’s a fun time. Yeah. And can contest. Yeah, outside of the event is like, just as good as during the event.
Brian Charlesworth 20:37
I feel like, well, I think within any event, Jeff, I mean, part of going to an event is getting to know people like you and you know, spending time and just that that's where the real learning happens, in my opinion, even though there's a tremendous amount of learning going on during the day there. So you just mentioned that you're at 2 billion already expect to hit two to 1 billion, 1 billion I'm sorry? Is that real estate? Just real estate close transactions we're talking about when you say
Jeff Cohn 21:05
That's what I'm speaking of, for the audience. I think that's probably here today. But yeah, yeah, as overall revenue is concerned, we're in. We did about $25 million in revenue last year, gross revenue across all the businesses. So yeah, there's so much opportunity. It's not right now. So
Brian Charlesworth 21:23
That's what I wanted to point out. I mean, you're also closing, as you're closing, let's just say you're closing a billion in real estate. I don't know what that would equate to that you're closing in mortgage and title, but it's up there, right. And then you're creating this recurring revenue stream with insurance and everything.
Jeff Cohn 21:39
So anyway, these are all the things we talked about, like a lot of people don't know, I'll give a few teasers in each industry if you want.
Brian Charlesworth 21:54
I just read this morning on Inman and Gary Keller is actually getting attacked for those but just people trying to take away buyer’s commissions on numbers. And so you have to be doing this kind of stuff to protect yourself in the future.
Jeff Cohn 22:10
Yeah, and I think the first thing we started talking about, which I did back in 2015, was building an investment company parallel to our real estate company. And I started teaching investment teams how to build real estate companies parallel to their investment teams, they're the same thing. You prospect for investment leads, you put an Acquisition Manager there, you have a disposition manager, meaning you have a buyer's ended buys it, you have a selling agent that sells it, you have a team that goes and fixes up like a stager, it's the same exact business model, but the product is different the type of products you call your avatar that you want to invest in. So first and foremost, talking about passive, if you are in an active role today of selling real estate, you always should have an investor hat on, we'll teach you how to do that at our event, we teach people how to invest. On the insurance side, you have all these clients that are buying homes that need property casualty insurance, they don't know that using a captive company is going to charge them an extra 15 or 20%. And that they can save a ton of money at an independent company that shops 20 Different insurance products. What we also don't know, including the people listening, is that wherever you write your insurance policy, they're netting around $500 a year off of you, netting $500 A year every time you renew. So now add up every buyside transaction you've ever done. We're closing 60% of our buyside transactions into our insurance products. So we closed 1000 buyers last year and 600 contracts went to our title company. So take 600 times $500. And that money will reoccur at a 98% reoccur rate year after year. And every year I'm going to add another 600 people and then 600 People in 600 people, and that's just Omaha. And we're going to be in 100 cities over the next five years. So
Brian Charlesworth 23:36
That business takes time to grow. But ultimately, that is the business that's going to feed you for the rest of your life. Right
Jeff Cohn 23:45
100% And there's an X apply to all these businesses right now are worth 10x multipliers. Yeah, take the net, and they're worth 10 times that. So you start building these businesses out. Once they get to a certain level, they hit economies of scale, and they're worth so much money. There's large institutional money that wants it. So if you're an individual agent out there, like hey, how do I win? There's three ways of winning one is vendor relationships. So if you don't have enough deals right now to justify building your own mortgage, auto insurance investment company, that's fine. Go get a vendor partnership where they pay you 100 bucks a month and you can use that that can be net profit, you can be their marketing. Our second is strategic partnerships. No longer are they called MSA strategic partnership is where you partner with someone else and you go pay for sync leads or Boomtown leads or Zillow leads, and they have access to all the leads, you have access to all the leads, but you're ultimately a glorified scrubber. You're gonna put people under contract and then hopefully those people choose to use your partners deals and we've generated 12 grand a month for the last 10 years. Through strategic partnerships. We've generated over a million visitors to our website, kW elite.com. In the last 10 years 100,000 registered leads off of that million dollars of visits and 2500 closed sales $17 million in gross commission, of which I kept 50% So I know there's lots of numbers there, hit rewind, listen to it again. but a million visits 100,000 leads 2500 closings 2.5% 17 million in revenue and a 50%. Net take home for me. Following the strategies we're going to teach at the event the team building Summit.
Brian Charlesworth 25:11
Yeah. And to your point, Jeff, I think it's something that most people in real estate don't really think about. But there is an extra opportunity there. Spring and I have a good friend that just sold his title business for I don't know what the exact number was, but I know it was in excess of $20 million.
Jeff Cohn 25:26
So you know what the multiplier was? Do you remember him saying it? Or? I'm not exactly sure. Now, I'm hearing five extra 10 on title. And when I got into title and 15 people talk one to x, maybe something like that. So yeah, the evolution of ownership, you guys as vendor relationships, when you're small to strategic partnerships, as you start to grow to joint ventures where you have maybe 1% ownership and something to 99 to 100% of ownership in something, depending on how you structure things. And so I today own all the ancillaries. But I don't have 100%, because I have strategic partners that also have ownership. All of this, of course, we've gotten approved in our state, we've gotten approved nationally, we have a RESPA attorney that works for us that charges $1,000 an hour and makes sure everything's legal and disclose, disclose, disclose is the trick. So we have affiliated business arrangement disclosures, where people obviously know that we have ownership and all these things and are making money in all these different ways.
Brian Charlesworth 26:18
When do you guys disclose that Jeff?
Jeff Cohn 26:21
Point of sale. So part of the purchase agreement, they would be we would share with them a one page document, and they would go through and see, okay, they have ownership and all these companies, you have to disclose the amount of ownership you have, and then what that company typically charges. So everybody knows I have ownership in each of those entities. And that's how we keep ourselves out of a real estate deal.
Brian Charlesworth 26:41
Yeah, great. Okay, so we don't have a lot of time left. So I want to switch gears here. Jeff, I consider you a visionary as well in this industry. So I want to know what your thoughts are. Where's the industry going? Like you're out looking and always trying to figure out, okay, well, where do I need to pivot? Where do I go? What's happening? Let's get your take on the next five years.
Jeff Cohn 27:01
Yeah, residential real estate. I think we'll see ever changing technology will continue to be adopted. So the big war today is who is the fiduciary? Who represents the client? Today, it's the residential agent, the independent contractor who has a real estate license, they represent the client, but the client more and more and more is using technology. And so at what point is that residential agent no longer necessary, but the state's laws will require that there is a fiduciary as part of the transaction. So if you're a company like Zillow, who generates the lead scrubs the lead, puts the lead in contact with an agent can possibly facilitate access to the house by the homeowner giving permission and or putting the Zillow lockbox on Zillow can even buy the house from the seller, like at what point is the big tech company will use Zillow as the example need a Realtor Just because there's a state law? So this is the scary question for those listening. How many real tours do you know in your city that would take $100 to go show a house right now? 100 bucks to show a house. Everyone's thinking, big $100 and $100. A show house? Well, why couldn't Zillow do everything I just said, Get the agent to go show the house it could almost look work like Uber, like they put out a bat signal and say, hey, this person wants the house right now who can go someone hits I want to go, here's what here's the 100 bucks. So now they've covered the fiduciary, they have a fifth person who works at a real estate brokerage. Maybe it'll be Zillow. But maybe they're out on another independent, who cares. They're getting their 100 bucks to open a door. What has to be done by the fiduciary? And what can be done by somebody in the Philippines. And that's going to be where the rubber meets the road. Because I believe the future is that the person that controls the data, this isn't just real estate, this is every industry, the person that controls the data, the person that controls the leads, the person who's created the system is the person that controls the technology. They control everything. And so what's the agent to expect for their future? What do they have to look forward to? I don't think they get to look forward to more commission, I think their commission goes down. I think there will be people that will pay a higher commission, but it's going to be a niche market, it's going to be somebody looking for a golf course condo in Scottsdale, or a vacation home in St. Pete's in Florida, or a luxury property in Omaha, Nebraska. So like you'll pay somebody, but it has to be a niche, that traditional deal will be done using I call tech agents, big tech companies. And so the way that you pivot to protect yourself or hedge against this being a probable future which I can be wrong. And if I'm wrong, it's okay. My advice is going to be a win no matter if I'm right or wrong. In terms of what happens with commission. What you want to do is have ownership of the ancillary businesses that go along with the real estate transaction. Because if you can make money like we talked about earlier on the insurance, and then at point of sale on title, and then on the refi, if they go to refinance and rates come back down super low with rates are still arguably super low compared to when I first got into business or in late 80s When my parents bought their first house. And so there's a lot to say there and I know nobody knows but my guess would be out of the 3 million agents today there will be 10% of those that are licensed called 300,000 agents and out of that 300,000 agents This is in five years, out of the 300,000 agents standing 50% will work for tech companies and just get paid $1,000 A house or $100 a showing or it'll be some model like that more of the Redfin model base salary and no real bonus, the other 50% will be niche agents. And the way you survive, if you're a broker listening is you do both. And you let the consumer pick based on the value they want. Because everybody wants different things, just like agents come onto a real estate company and they want different things. So we're working on being the first domino that allows agents to hang their license at our brokerage for free, we make nothing off of the agent being at our office. But we encourage the agent to promote our ancillary businesses. And so our win isn't the company dollar and Keller wins vernacular aren't when isn't keeping a tiny little percentage of the commission, our win is the buyers and or sellers probably use possibly using our mortgage title insurance, investment, property management, development, new construction, all the other things that we can sell to them at point of sale and after point of sale. And so as far as hedging and protecting be a part of the at point and after point of sale transactions and the things that can take place, like there's companies out there, One Source is a great company, we work with them. It's a concierge service, where when your buyer purchases a house, sorry, I say when a seller moves from house a house be one source helps them move all their utilities, and then they get compensated if somebody moves to house B, and they get DISH Network, One Source gets paid a commission, if they get ADT Security one source gets a commission. Well, One Source can sell anything, you know, at that point, and then can follow up at any point. And they do a rev share with the company that refers One Source to the client.
Brian Charlesworth 31:35
So Jeff, thanks for teeing that up, because Sisu actually just rolled that out as part of our client portal. So
Jeff Cohn 31:40
Love that! Was it One Source?
Brian Charlesworth 31:42
Another place you guys can get that. Yes, absolutely.
Jeff Cohn 31:44
What? That's crazy. That was totally organic, too. So that was perfect timing. And one, One Source will be at the event, by the way and speaking. Okay. Oh, yeah, they're gonna be at the Summit. That's crazy! Small world. And they do, they are so good. They do such a great job. So you talk about the future. I don't know what it is. But what I said was, if I'm wrong, let's say commissions stay the same, or they go up. And I just recommended to get into all the ancillary businesses, all the parallel businesses at point of sale and after point of sale, and you get to make an extra 7%. You're welcome. Yeah, there's you only win and the consumer wins. And this is what people don't get like, the agent gets to say to their consumer, here's the dialogue when someone says, Well, Jeff, why would they use the company's, you know, ancillary and not their best friend or a company, they are young, we're just here as a second option to make sure that your first option is being honest. So in our office, right now, in Omaha, it's a factory, it's an assembly line, you go down a hallway, super tight tech hallway, and you have your mortgage company, your title company, or insurance company or developing company or investment company or your your transaction coordination team all in one place. So that the first time a buyer or a mortgage person or title person or insurance lead any of these other ancillary businesses, they come to the office, the person leading them down the hallway says, this is this person, this is this person is this person, Mr. or Mrs. potential client, we know you already have companies you work with. And that's great. We're here to provide you a second option to make sure that the first one stays honest, we're holding that first entity honest by giving you a second option. Do you have one minute for us to run your numbers? Yes, yes, yes, yes, yes. Well, hey, we're independent, we can do better. Nobody can beat us. Because we have better products, we offer better coverage. And for less surprise, most people are going to convert over to us.
Brian Charlesworth 33:17
So Jeff, I know you're at a hard stop. I have one last question for you in these last two minutes. If I'm out there listening to this podcast right now, from what I know about most team owners, especially smaller team owners, I'm thinking to myself, how am I going to do this, like, I build all these different businesses? And where do I start? What am I so I believe, if I'm not mistaken, when we spoke last year, we're really focused in on you part of what you're doing with these expansion teams is you are providing all of these services to these owners,
Jeff Cohn 33:48
People simply haven't created a space in their world to put time into this. This is all I've done since 2014. So I quit selling in ‘14, I spent seven years of my life, figuring out how to build businesses that can go to all 50 states that can partner out of a box with an already existing company that doesn't have to do anything more. So our partner keeps, it's negotiable. But around 40% ownership. So let's say you launch an insurance company in Montana, you'd keep 40% ownership of the portfolio 40% ownership of all the revenue. And we would do all the work. Now every state have different rules, but we get licensed in your state. We're already licensed in a lot of states, but if we're not we get licensed in yours. Some states require boots on the ground, some don't, some require a physical office, some don't. So we'd simply do our due diligence, figure out what's necessary to partner with you. The challenge is there's economies of scale. So if you're not doing 500 buyer sides a year, we're not going to talk to you. And not because you're not valuable, you are valuable, but not to us because you haven't hit your economies of scale. The way that people overcome that is that if you get a group of people together that will do 500 transactions, we can partner with you and it can be across brokerage brands. We don't care if you can get 500 buyers a year under contract. We know that based on 500 buyersides we're going to convert a certain number of them and the magic isn't giving us the ability to reach out to a client at They've gone under contract, we don't rely on the agent sending us a referral, we just go straight to their database. So we would use their Sisu platform if they're in the Sisu world. The day it goes under contract, we're reaching out to Jane Doe and say, Hey, Jane, I understand Brian Charlesworth just put you on a contract 123 Main Street. Congratulations, super excited. Brian had mentioned he wanted us to give you a quick call just to make sure you have the best rate when it comes to home and auto insurance. Can I take two or three minutes of your time to capture information and give you a quick quote, we know you already use State Farm, that's totally fine. We want to make sure that's the best product for you. Yes, that would be wonderful. I mean, who says no to that? We're just going to keep your original company honest. Like, yeah, we want to see that. So with that dialogue in that system, on every one of our closings, which we have 100 closings a month, we close 60%. Okay, that's across nine offices. That's pretty fascinating.
Brian Charlesworth 35:44
You say you close 60% that is... Your lead on that Jeff is Home insurance?
Jeff Cohn 35:49
Every business entity promotes their products differently. But the marketing..
Brian Charlesworth 35:52
They're going to get calls from each of those business entities?
Jeff Cohn 35:55
Or a text or an email or that will just be in the purchase agreement.
Brian Charlesworth 35:58
Jeff Cohn 35:58
The magic of getting agents to support businesses is just building it in your dotloop or DocuSign purchase agreement as the selected box as the default. And then the second option is other and most agents are so lazy that they don't even click the other and write something and they'd just rather take the default. I mean, people make it so difficult to, to cross sell ancillary, and it's not that hard. There's just two main rules, one, the agent has to win and the consumer has to win. If it's a value to the agent of value to the consumer, then it's a value to us. And everybody's a win, win, win. So when you build these opportunities out, make sure there's a win for the agent, and those that can look a lot of different ways. Make sure you do it legal, ethical, etc. And then make sure there's a win for the client. If the client is making more money, less time with energy, it's when agents are making more money, less time, less energy, it's a win, where Gary, I think he's put himself into some trouble. And I don't know if this is specific to the article you just saw, I saw one release yesterday. They're doing kickbacks to the buyer. So their mortgage company is saying, Hey, if you buy a house over 150,000, that and that might not be exact, but they're saying to the buyer, if you buy a house over 150, and use our mortgage company and Keller Williams, we're going to give the buyer 1500 bucks at closing. And the idea behind that was to protect the agent's commission, because if the agent is making 3%, and the market is saying hey, no, no, we only want the agent to make 2%. The buyer's agent can say, Well, no, my fee is 3%. But the way I'm going to help you get that money back is if you use my mortgage company, they're gonna give you money at closing. And so that battle is happening right now to establish is that allowed? Is it not allowed? There's always going to be battles, laws go into play because people go into a gray area. And anytime you're in a gray area, they have to establish that is that black? Or is that red? Is that allowed? Is that not allowed? And then you shift and you create a new gray area and then a new gray area and it's not too shifty. We're doing this to create value for the consumer so that there's no monopolies of people saying no, no, no, you can't do that. Why can't I do that? So the future agent is called an agent advisor. I believe that they're going to act more like a house adviser about everything about the home you know, like One Source kind of does the utilities the agents are going to facilitate the house advising role stager pictures marketing? post sale would be you know, who and what utilities are you using? It's not just going to be, go open a door for someone, it needs to be more than that. It's always needed to be more than that. And I mean, the great thing about that is then you like you said, you're about providing a better experience, you control the experience from beginning to end. And 100% you can make sure the client has a better experience. And then they stay in your world forever
Brian Charlesworth 38:20
Or they're coming to you.
Jeff Cohn 38:21
The magic is they stay in it forever. So think of being an agent, I gotta close on this but where you reach out once a year, once a quarter and check in with Jane Doe and say, Hey, I just wanted to your house is good. How's the insurance working out? You know, what's your interest rate these days? Because did you notice rates drop? Who did you end up using for cable? I heard YouTube TV is way cheaper right now, every year, you can essentially run and do it audit. And of course it can be a third party company, which is what we would do through our call center. But they can run an audit and now you're the point of contact with someone who knows you like to trust you to make sure they're getting all the best stuff. And when they think about switching any of those things. They go to their agent advisor who represents all of that. That's the future agent if you want to survive, you can't just be the person that opens the door because somebody's going to do that for $100. Yep.
Brian Charlesworth 39:05
Okay. Well, with that being said, Jeff, I'm gonna cut you off because I know you have a hard stop. So thanks anyway, thanks for joining today. I love hearing from you. Great connecting with you again, and I'm gonna see you at the summit. I
Jeff Cohn 39:18
We hope to see some right first or the third heard through the audience. Go check out the teambuildingsummit.com. And then if you want to follow me on Instagram, like what you heard today go to @JeffMCohn, C-O-H-N. And then we also have a podcast as well, which I'm gonna Brian on next week called The Team Building podcast. If you search Team Building on any podcast app, it'll pop up first couple.
Brian Charlesworth 39:39
All right, that's awesome. You guys need to check that out. And Jeff, thanks for being on the show. We'll see everybody next week. Thanks, you guys.
Jeff Cohn 39:45