The $600K Mistake That Led to 85% Profit Margins in Real Estate with Robert Lee

Robert: [00:00:00] The biggest problem that people in all industries have, but especially in real estate, is they try to focus on 900 things at once. But when you focus on 900 things that aren't that bottleneck, you're just adding capabilities and capacity to things that don't actually help you make any more money. 'cause that bottleneck determines how much flow you can produce, what we call throughput in the TOC world.
Intro: You are listening to the seven Figure Leap podcast. We're here to leverage rich relationships and smart strategies to take your business to the next level. Here's your host, Dustin Reman.
Dustin: Welcome back to the Set Free Lead podcast. I'm really excited. We are kicking off. A new coaching series. So we did this, late last year where we had five different interviews with people in very different types of [00:01:00] businesses.
Dustin: We got to really look inside their business, understand what was working, maybe some of the constraints, and then we were able to create a game plan for them to meet their goals and ambitions for the next 12 to 36 months. So we're gonna do that again. And today is the first in our new series of coaching, and I'm reconnecting with an old friend here.
Dustin: So, Rob Lee from Lee six Agency is my guest today. Rob and I, we were talking before we hit record, connected in person way back in. It feels like an eternity 2024, at the Traffic and Conversion Summit where I had the privilege of speaking and got to know Rob after, after I got off stage. And we've stayed in loose contact, although he's been doing some really cool new things.
Dustin: so Rob, yeah. Just first of all, thank you for being here and I'm really excited to unpack your business today.
Robert: Yeah, I mean it's a privilege to spend some more time with you and we not only got, I not only had the privilege of watching you on stage, but I took one of your crash courses afterwards 'cause I was so in love with everything that you talked about and, you [00:02:00] told me how you sold beef jerky, which just instantly means you're kind of a cool dude.
Robert: 'cause you hit me right here with food that I just absolutely love. So , it's nice to get reconnected after we've, been doing our thing for the last 18 months or so.
Dustin: I've since exited my beef jerky partnership, but I'm still a consumer of that. And,in our program, we all, we send a welcome box to every new client and we, I still include Fire Creek snacks, in there because I still love the product and it's obviously a big part of my own story and how I got into this whole world of podcast guesting.
Dustin: So. All right. So we said lease six agency. Yeah. In your words, just kind of give the audience and me some context, like what do you do, who do you serve? And then we'll start drilling down more into like offers and revenue and that sort of thing. But yeah, like in a general sense, how would you introduce your company and who you serve?
Robert: Yeah, so our goal is to help real estate professionals, agents, all the way through to real estate, schools and associations [00:03:00] find the bottleneck that is preventing them from scaling their operation. Help them to think clearly and understand their bottleneck and ultimately and purposefully generate more profit and less time than they would have otherwise.
Dustin: Well said. You must have some, some marketing chops here. That was a really good summary and I learned this as we were, heading into the interview. So, Lee six is a combination of Lean and Six Sigma. and then if anyone watching a video, they can see theory of constraints over Rob's right shoulder there.
Dustin: So I think that's important to kind of start with is while you have a rich marketing background, and you've been doing that for many years, you're not just looking at this as a marketing engine, it's bottlenecks, operations, scaling. So it is a, you have a different value proposition than just marketing.
Dustin: Is that fair to say?
Robert: 100%. So the goal of any for-profit business is to generate profit. And if it's one thing that Lean and Six [00:04:00] Sigma, and especially TOC teaches us, is that when you sit there and treat your organization as an organism that shares that common mission, you can find that particular bottleneck that is preventing you from generating as much profit.
Robert: The biggest problem that people in all industries have, but especially in real estate, is they try to focus on 900 things at once. But when you focus on 900 things that aren't that bottleneck, you're just adding capabilities and capacity to things that don't actually help you make any more money. 'cause that bottleneck determines how much flow you can produce, what we call throughput in the TOC world.
Dustin: Love it. All right, well let's, I think a good place to start would be your offer stack. yours is pretty well defined and I was on your website and there's, different boxes for different parts of the, the market that you serve in the real estate industry. You kind of threw out a few there in your introduction.
Dustin: Maybe we can start with, the [00:05:00] more, I don't know, basic, I dunno, like we're gonna start with the real estate agents and we're gonna build up to brokers and, schools, associations. And I guess what I'm trying to think through this is more that direct consumer lower price offer up through the more enterprise level offer, the more B2B offers.
Dustin: So maybe you can just give us, we don't have to get into every nook and cranny, but sort of the main way you serve each of these different groups and sort of an associated price point with that. And I'll make some notes for that so we can come back to it as we're thinking about the, your bottlenecks maybe and places where we can add some value to your business.
Robert: Absolutely. Yeah. So the key thing to keep in mind about all four of our key markets in real estate is that they all share the same root cause of why they struggle. And that is in the industry. Believe it or not, profitability is not treated as a professional standard. And what I mean by that is we spend a lot of time with our CE classes, and I say we, 'cause I am now technically, even though I don't sell homes or do any transactions, I [00:06:00] am a licensed agent in the state of Georgia.
Robert: I went through the misery of getting my license to understand the misery that everybody goes through, but it's very clear that this industry doesn't treat profitability as a measure of your professional capacity and capability. Your ability to maintain compliance with ethics requirements, which are incredibly important, protect the consumer, which are incredibly important.
Robert: sound financial and fiduciary management, incredibly important. But all of those standards are very compliance oriented. So we approach it from the perspective with all of our markets that we are here to make profitability a professional standard in your business. So starting with the lowest price offer our real estate agents, we build an entire engine or have built an entire engine called the 90 Minute Marketing Department, which are basically documented AI process, AI powered [00:07:00] processes that you can use on demand with a coaching community that you can pop into and out of at any point that you want open office hours that you can schedule, you don't have a limit to the number of office hours that you can schedule.
Robert: Two to three different types of live interactions each week where we talk about business principles and how to use AI to scale your real estate business. We offer that to real estate agents because they're businesses of one, they're not employees, they are self-employed. They pay their own taxes, they have to worry about all of their own compliance, even though they hang their license with a brokerage.
Robert: so that low price point offer is great for them because there's no commitment, there's no obligation, no contracts. They can come in and learn as they need to. And it's also great because the next level up is for brokers. And what brokers can do is actually hire us to build that method inside of their [00:08:00] brokerage, use it as a recruitment engine, and we actually guarantee the profitability of the system by saying you don't pay any money out of pocket.
Robert: You pay $12,000 when your first 10 transactions from newly recruited agents come into the brokerage. For brokerage that's easily worth 15 to $20,000. And we basically say if you can bring in an agent or 10 agents each quarter or 10 transactions each quarter using our system, you can guarantee yourself new revenue lines of about a hundred to $150,000 a year that continues to stack.
Robert: So by the end of five years, you're pushing, nearly three quarters of a million dollars in consistently predictably producing profitable revenue without spending any more than, 10 to $12,000 a year with us to help you continue offering that.
Dustin: So just pause real quick. So [00:09:00] agents, if I'm just like.
Dustin: I want your help. I want the 90 minute marketing department. Is that a monthly,just membership, I guess that's the word. I'm struggling to find a monthly membership fee. And how much is that?
Robert: $47.
Dustin: Oh, okay. So very affordable. And then the brokers is much more of a. Partnership model where you come in and you guarantee results and it's a recruitment and training and coaching.
Dustin: And then obviously those agents that come in also get access to the first tier of the 90 minute marketing department. And you say 20,000 is like 20,000 for the first year and then there's a renewal, or how does that work?
Robert: It's $12,000 for the first year, payable upon those firsthand 10 transactions, and then six to $8,000 depending on what level of reselling or relicensing you wanna do for those agents that you bring into your brokerage.
Robert: So either way, what we do is we give you a recruitment [00:10:00] model. We teach you how to recruit for business consulting. because again, agents don't have that. They don't get that in any broker. Or not really. Right. and the coaching and consulting out there that they do get is not really oriented towards profitability, like I said.
Robert: So it's a long way of, and just repetitive way of saying the model is we teach brokers how to recruit. They can use our system to do it, and then they can continue to license our system. And we do all the ongoing coaching and consulting and AI training that comes in. And what we have built in the 90
Dustin: and your front end of that is basically pay for performance.
Dustin: It's like, sign on with us, give us what we need to help you implement what we tell you to implement. Or and after you have 10 transactions in the door, then you write us the check for 12,000. We're now effectively partners and what we want to do is continue to , help you do that as much as you want to grow the number of agents.
Dustin: But then we also want to. [00:11:00] Be a partner in, empowering your agents who basically license our, 90 minute marketing department to your agents. And, it kind of becomes a benefit of working at that brokerage. And obviously it increases the transactions that those agents can do because they're actually, focused on profitability as a standard.
Dustin: So I've kind of captured things so far in the first two tiers.
Robert: That's, look, that is exactly it. And, you should own a brokerage. 'cause I think you nailed that, a lot quicker than some folks in the industry have.
Dustin: I love it. I have, several friends who are real estate agents. My aunt, was a successful real estate agent.
Dustin: She's now retired. and then my wife worked at a brokerage, sort of as an intern when she was in college. I've always had sort of a fascination with it. so no, I'm probably not gonna start a brokerage, Rob. But, I, I, when you were talking about earlier and introducing this idea of like. It's like all they talk about is like, contracts and compliance and ethics.
Dustin: and if they happen to close a house and they get a $30,000 check, it's like they hit the lottery and it's like, this should, it's a business, right? Like [00:12:00] this should be an expectation. so I love the sort of professional standard. the bigger, yeah, just the bigger sort of vision and standard that you're holding for this versus just saying, we do marketing for real estate agents.
Dustin: Like it, it's so much more deeper than that. Okay. So I think we got the agents and the brokers, is the next tier of the schools real estate. Schools.
Robert: Schools, yeah. and the offer package is very much the same in terms of cost for brokerages. we'll come in and actually teach them to run their school.
Robert: As a profit engine versus an educational institution, much like what you and I do, right? We live in a world where profitability is not only a professional standard, but the professional standard. It's what measures the success of a business. And we know that. So we come in and for real estate schools and we basically teach them, don't sell classes, sell profitability in the real estate industry.
Robert: And the way that we help them [00:13:00] monetize what we do, like brokers, is we actually say, your license allows you to resell it to your students. So if students are coming to you for pre-licensing, we will help you package pre-licensing with post-licensing and the 90 minute marketing department to basically say, we will be your coaching for real estate.
Robert: And then teach them how to create a membership model inside of their school that doesn't. Thrive on the number of people in class, but thrives on the number of people asking for help, if that makes sense. And so that they can create offers on their end that are much more attractive and give them a decisive edge in the market versus the umpteen number of real estate schools out there that offer classes for free or do things online in a way that makes it extremely convenient.
Dustin: And you clarified this to me earlier. when you say real estate school, these are state licensed accredited schools in every state where a realtor has, do they have to, I [00:14:00] guess they have to go through one of these institutions to get the real estate license like you did in Georgia?
Robert: Every Yeah, 100%.
Robert: Every single state in the country has license requirements that require you to go through education in some fashion or form. Here in Georgia, it's 75 hours. I think in Alabama where I have some clients, it's 60 hours. It varies from state to state on the amount of time and the way it's constructed.
Robert: But every single state has schools, every single state has instructors and they are required to meet the regulatory needs or determinations of what that state says. So,
Dustin: and with this offer, are you, like with the brokerage, you're helping to recruit new agents in and then basically licensing your IP to them so you have a recurring revenue stream from your standpoint.
Dustin: And with the schools, I get totally get the recurring revenue stream. It's like if someone comes to you and wants to be an agent, empower them to be a profitable agent. [00:15:00] Make that part of your own differentiator in the market. Why they choose your school over others. We got all this stuff already. You can basically license it from us and charge people for access to it.
Dustin: Is there also a component of selling? To, prospective agents or like the equivalent of recruiting at a brokerage as a recruiting for the school, or is it just a straight license play?
Robert: yeah, I mean, it's, it should be, and it would be under a membership model. So what we try to help schools understand is that what people need in this industry is coaching.
Robert: they need constant mentorship. And because most brokers, or pretty much every broker is a former agent who didn't get coaching or mentorship, they don't exactly provide consistent quality of mentorship and guidance. or you can go to some of these larger brokerages in the country that make you pay through the nose for that coaching, and it still doesn't talk about profitability as.
Robert: Professional standard, right? it [00:16:00] teaches you all the different nuances of what you could do here. And like you said, contracts and compliance and all that kind of stuff. So yeah, absolutely. Schools should be out there recruiting new potential agents and keeping them all the way through their career as some sort of member in whatever program they offer.
Dustin: Is there a per year sort of range for schools? I'm sure it varies more widely than a brokerage because you're not talking about kind of groups of 10. You're thinking about, kind of, it almost sounds like taking a real estate school and making it, adding to their list of things they do is like business, like, like teaching you the business and profitability of real estate.
Dustin: and so, I mean, I guess, I'm trying to think of the right way to ask this. If a school has 500 students every year anyway, you're affecting all 500. It's not like, A standalone thing that they only offer to certain clients, right? In most cases,
Robert: no. Yeah, in terms of schools, what we recommend that they do is either set up that membership model like [00:17:00] $99 a month or $150 a month, whatever it might be, and offer the 90 M as part of that, or include it as an upsell.
Robert: So somebody comes in and pays for a pre-licensed class at $500, add a 90 membership at $37 a month, or $47 a month. And again, we make the same guarantee. You can use the system so long as you're basically trying to sell it, and you can pay us when you make your first 12,000 if you want to use the profitability guarantee.
Robert: And we know every student that comes in because as soon as a membership is signed up for with the school. They automatically get pumped into our community and they're tagged in the appropriate way. So we have full control over making sure that we know that revenue that's coming in. I mean, we can identify what that revenue is and, most [00:18:00] school owners are trustworthy enough to say, yeah, you can see everything we're doing, so
Dustin: we hit it and we're gonna pay you your just due, or whatever.
Dustin: okay. And then the final one, if I'm keeping up, is associations. And I mean. I'm assuming that's a lot like the schools, but it's the professional association, version of this where their members get access through a license to your coaching and mentorship programs.
Robert: Yep. So the realtors, funny enough, this is just a little educational moment for everybody out there.
Robert: A realtor is not the same thing. Same thing as a real estate agent. A realtor is actually a trade term, so they are not interchangeable. You have to be a member of the realtor's association to call yourself one. so I can say that because I'm a member of an association, but not every real estate agent is.
Robert: So these member associations, because it's a trade association, it's driven by ongoing membership revenue and [00:19:00] they offer a variety of different additional services and benefits joining as a member, and this is one particular membership benefit that would be extremely helpful for agents who. Don't operate in an industry where profitability is a professionals.
Dustin: Hey Keith, coming back to that core value proposition, which I love. And is there, are there like a bunch of different realty realtor associations? or is there like, the one and I, it always jumps out in my mind 'cause I hear radio commercials, they never say realtor. They say the association of realtors, like, they make it sound like real fancy.
Dustin: But and I guess that's probably the right way to say it. I'm poking fun at it. But is there just like one big realtor association or are there a bunch of fragmented ones?
Robert: Yeah, it's very much a hierarchical organization. You have a national organization, you have state organizations, then you have local organizations, and then you have a variety of different ancillary.
Robert: Support organizations like [00:20:00] Young Professional Network is one of those ancillary organizations. And the Council of Women Realtors is another one. I mean, there's a, it's a very professionalized operation all the way from the top. And they have something like a million and a half members across the country or just a shade under that.
Dustin: Okay. And in, like, for your business currently, do you just have like a contract with a certain chapter in a certain state, or do you have like the whole national, I mean, I guess you wouldn't be talking to me if you had 1.5 million active people on your licensing just from one association.
Robert: Look, if I had 1.5 million people, yes, you and I would be, partying on a yacht somewhere.
Robert: but,I don't have,the national organization signed on as of yet. So it is really just with local organizations that are looking to. Provide unique benefits. and I will say this, I mean, the trade association has taken a lot of heat over the last couple of years. If you've, if you have [00:21:00] any knowledge of the industry, NAR, the National Association of Realtors, was faced with some very serious lawsuits regarding, anti-competitive measures.
Robert: the people that brought those lawsuits, I, I don't personally feel like they were trying to do the best thing, or from their perspective they were. But I think that it was, I think it's just a, it's a changing time that we live in the digital world. And NAR like every other organization out there is trying to figure out the best way to navigate it.
Robert: And our program, going back to that root struggle that the real estate industry has, is perfectly aligned with offering a unique benefit. That, members just don't get anywhere else unless they went to a school that offers it or part of a brokerage that offers it. So,
Dustin: so with the, at the association like it, at the brokerage level, it's like, I own this brokerage.
Dustin: I wanna make more money. I'm signing on with a [00:22:00] lease six agency to do that at the school. It's part of their own profit model, right? Like if I, I can use this in my, as a differentiator to recruit students and I can charge for it and tack it on and basically have a markup. So it's a profit center for me as a school.
Dustin: Is the association the same way where this is offer at, let's just say a local chapter, they say this is an option and when you sign up for it, it's a hundred bucks a month, and then, Rob gets his cut and we keep our cut? Or is it like baked into the membership where everyone gets it? or does that vary?
Robert: it would vary on the organization. So it, in that particular case, realtor associations have a different specific goal because they are. Nonprofit trade association organizations, they, even though profitability is not their goal, they still have to generate revenue and pay the bills like everybody else, but they can, they, they have a lot more flexibility on how it is that they can offer the program.
Robert: they have membership dues that come in that [00:23:00] give them the ability to have that flexibility. And if they wanna upsell it, great. And if they just want to include it as a member benefit, great too, and that they can figure out the best way to, to make their revenue stream on that.
Dustin: Thanks for breaking all that down.
Dustin: I mean, I've learned a ton from a conversation just about how these different parts of one industry think about profitability and think about the, the different, types of value that you provide and, to the extent that you're comfortable, we can talk around numbers or whatever, but,I'd love to kind of shift right now to kind of snapshot of the current business, right?
Dustin: So revenue total clients, and then what I would like to kind of break it down really rough percentages is like, which of these buckets are generating the primary revenue for your company, right? Like, we get 5% from agents, we get 80% from brokers, or whatever that number is. so what's like trailing 12 months look like for you guys?
Robert: it's, so, in full honesty, it's been a little while because as we were talking before when I met you, [00:24:00] I was primarily doing political consulting, right? And I made a tremendous amount of money doing political consulting following the same business principles that I follow here. And that last year that I was dedicated to doing consulting.
Robert: In that industry, I think I grossed something like $600,000 and had roughly a 60% profit margin. Right? Which was good. 'cause as I've told you before, you know my long story that we're not going through, you can look up other podcasts out there if you wanna search for it. it was going through some financial struggles because of the emotional challenges of dealing with loss of my father and my son, and a business that just went under because of it.
Robert: So that long story set aside, this previous year, we did about half that, but our profit margin was significantly higher, like closer to 85%. So I, in terms of the net revenue from taking out [00:25:00] operational expenses. we did, not quite as much, but about the same. And then I was able to pay my staff and, pay for stupid Disney trips with my wife and girls and, whatever sort of kitch toys I like is a 44-year-old man and pay taxes and all that kind of stuff, so,
Dustin: yeah.
Dustin: And I know you're. You sound, a little like apologetic about it, but it's basically a brand new business. Obviously you have tons of experience, you've been doing marketing and operations and all these, we talked about lean six sigma theory constraints since you were like 18. and you gave enough context, I think for us to understand where this fits into your overall journey.
Dustin: and that, you had the financial difficulties that came with a lot of different personal things and a different, a shift in industry. And then you kind of had this year of cash cow political consulting, which you could have done and made a ton of money, but it wasn't alignment with your values.
Dustin: It was a difficult client base, I guess to say the least. And so you made a very conscious decision. [00:26:00] Was it about a year ago that you really got into this? Focus area.
Robert: Yeah. So after, after the mail house, we did direct mail marketing in addition to consulting on the side and all that. after that crashed out, I actually had a good friend in the real estate industry say, Hey, why don't you come set up a booth at this conference?
Robert: They don't have any marketing experts. They don't know a damn thing about marketing. And that was really the first foray into it, in late 2023. And then 2024 came, and I kind of on the side had the real estate practices and involvement growing and just kind of learning the industry a little bit better.
Robert: And then went through the emotional struggles of 2024 and, just realized like, if my personal goal is to be a happy present father and husband, this is not the place to spend my time working. so it, it isn't even really. Apologetic. I like, I don't want the, I don't want [00:27:00] that tone to come across, and if it did, I apologize.
Robert: it's definitely, it's from a quality of life perspective, the best choice I could have made. And more importantly, I'm far more profitable. I mean, when my profits increase 15, 20% over what I was making, I mean, as well as I know there's a ton of people out there that make a ton of money, but they're not banking any money, right?
Robert: They're not able to actually have a choice about what they do. They have to grind over and over again. Funny enough, that's a struggle in the real estate industry. I mean, because agents have to pay their own taxes. Oftentimes they'll make $200,000 in a year and have to take out a equity line loan to pay their taxes and then hope they plan better for the next year.
Robert: baffles my mind. So yeah, our total revenue is down, but our profit margin is up, which means we're doing less work. Making more money. Making more money. Now the question is, that's stable. How [00:28:00] can we scale it up to the height that we had making in politic?
Dustin: Yeah, and I maybe apologetic wasn't the right word.
Dustin: I appreciate you saying kinda like I have made a lot more in revenue, doing things I don't love, and now I'm doing something I actually really love. It's scalable. I have time to actually hang out with my kids and freedom. and I guess what I wanted to hear, say for the audience's sake is like $300,000 in your first year and a new business with an 85% margin is freaking awesome.
Dustin: You know what I mean? Like, that's fantastic and 95% of the people listening to this who would kill for that. I would love to have that. but that's, but I also just wanna kinda give context like. you obviously have the capacity and you've experienced, even more than that and you're being very intentional about the type of business you're building, the model and scaling it, in a way that honors your more important roles as a husband and father and I feel the same way.
Dustin: So, I love that. So basically about 300 k really high margin business in the past 12 months. And if we look like 12 or even 36 months [00:29:00] forward, like kind of what's your ambition for this? Where do you see it going?
Robert: I would love to be at that $600, 600, $600, $600,000 level, by the end of this year.
Robert: Would love to do it. because that would just instantly mean, I mean, we had the sky's wide open at that point. I mean, I could walk into any one of these conferences, splash the cash that I want to be able to splash to, buy bar tabs for hard drinking realtors who spend all day working and then, the nighttime partying it up.
Robert: but more importantly just be able to give back to the industry and invest in, people and my own business and
Dustin: Okay. I mean, I think, and I think that's very realistic with the model. So, next thing I wanna talk about is we're gonna kind of be looking towards strategy of how do you basically double your business this year from last year.
Dustin: So if we look at, I wanna talk first about reality and then we'll talk more about aspiration. Like in the reality of say the last 12 months or even like this month, like a real [00:30:00] time snapshot. When you look at the four buckets, agents, brokers, schools, and associations, you have a rough breakdown of like, I was gonna say revenue or, and we do profit separate, but your are almost synonymous.
Dustin: so just basically. The amount of money you make from each of these four buckets right now?
Robert: Yeah, so I'd say probably about 45 to 55% is real estate schools.
Dustin: Way different than I would've guessed. That's awesome. Okay.
Robert: Yeah, I mean, it's honestly not where the biggest profit center is, and I'd say the remainder from month to month, it kind of varies or split up between the associations and the brokerages.
Robert: and with agents bringing in probably like five ish percent associations bringing in maybe 10 to 15% between the services that we offer, and then the remainder of that being brokerages. What I'd really like to focus on is almost exclusively scaling up brokerages. [00:31:00] 'cause one, they are the ones driving the majority of the business because from a real estate perspective, it's their responsibility to manage these individual businesses and vendors.
Robert: They're being their agents. So again, brokers to, to give you a little bit of insight into the real estate industry, when you work with an agent, you are actually technically working with the brokerage. The agent is serving as a agent for the brokerage. They're representing the brokerage. You sign the contract with the brokerage.
Robert: If there's problems, it falls back on the brokerage. They're the ones that have the biggest risk in the industry. They're also the ones that have the biggest opportunity to grow by recruiting the right way. So I'd almost like to focus on figuring out how to best connect,to get them to slow down.
Robert: Just long enough to have this conversation and talk about their business and their [00:32:00] profitability model and, get them to see why this should be a professional standard that they hold themselves to
Dustin: love it. That's super insightful. So, if I did my math right, like, let's call it 50% of revenue comes from schools, maybe 30% from brokerage, 15 from associations, five from agents, but the schools have less profit margin, I guess, because it's, that's almost purely a pass through service, right?
Dustin: Where it's, a white label service, effectively it's a licensed service, whereas with the brokerage you get that, but in front of that you get sort of a high ticket service. For the recruiting aspect. Right. is that part of why that's such a better model?
Robert: Yeah, and there's just, again, further opportunities to grow there.
Robert: I know for a fact, and we don't necessarily have these services dialed up yet, but it would be relatively easy for us to create additional growth oriented services for brokerages, like consulting them [00:33:00] on how to start their own school. That, that feeds into the recruitment, which a lot of brokerages try to do, but they don't do a great job with it.
Robert: They're recruiting the wrong people there. There's just a tremendous amount of opportunity there. that would be great to take advantage of.
Dustin: A year. I was gonna say 36 months. Screw that a year from now. like if all the, obviously you'll get some spillover into the others, right?
Dustin: Just 'cause like, as long as you can service them, some of them will want your service and you'll take that revenue. But you could basically laser focus, like we are focused entirely on selling to brokerages. And if you did that and you could just flip these where the brokerages become 80% and everything else is sort of a footnote in the, p and l, that would be a huge win because you see that's the real opportunity for growth.
Dustin: I just wanna kind of restate that in my own words. That Okay, cool.
Robert: Awesome.
Dustin: Well let's talk then we'll kind of shift here in the last, 15 minutes to [00:34:00] strategy around that. So we can just, let's just focus on brokers. With the ones you have now, and particularly sort of the 80 20, the ones you really like to work with, and the ones that are most profitable and the ones that grow the most with you.
Dustin: Like, how do you find them now?
Robert: it's the relationship driven one-on-one sales opportunities, right? You show up to events, you have conversations, and you do your marketing that way. It's such a relationship driven business that there is a, there's a validity to your presentation when you get to shake somebody's hand and look them in the eye.
Robert: I mean, that's just, it's just that personal marketing, right? And I mean, there are definitely opportunities out there to market on various platforms, but that's expensive advertising. And while it is that my profit margins are high, the quickest way to blow through cash is advertising that [00:35:00] is. Well, it's just, it's an expensive way to scale.
Dustin: I was just gonna say, if we think about that in per, let's just first kind of talk about in person, are you overindexed by geography now? Do you see like, we're just gonna own the state of Georgia first and then we're gonna go Alabama and then we're gonna, whatever, or is it, is it really agnostic to geography Currently?
Robert: it's agnostic to geography. I mean, the dynamics of what we're trying to work with is you have these big national firms, Kel Keller Williams Compass, which has now something like 20 different brands because they merged with another real estate company. you have a tremendous number of those size of brokerages out there, and the brokers are.
Robert: Franchises, essentially, right? they're responsible for running their own brands. So we have to compete against that. 'cause I don't have the both cash flow that Keller Williams corporate does, nor do I have the brand recognition that Keller Williams corporate does. And then you have your smaller local, [00:36:00] franchises.
Robert: I belong to one here in Georgia, that has I think like six or seven different franchises. And it's really, I mean, it's not even regional. It's Georgia based with maybe one, other state that it's in. And then you just have your small independent brokerages out there.
Dustin: I see. Who's your ideal client in that from a vertical standpoint?
Dustin: It obviously not Keller Williams because they're the, they're gigantic. They, I'm assuming they would tell you they'd already do all this themselves. Right. but obviously there's so many brokerages who aren't a franchise of Keller Williams. So you, yeah. And like, who's the ideal client size, brokerage size for.
Dustin: your vision for your business.
Robert: So it's really funny. I would tell you that I would be ideally suited to Keller Williams, better Homes and Gardens, Coldwell Banker, whatever the brand might be, local, national, whatever. They have between 50 to 150 agents, maybe 15% of [00:37:00] those agents are actually producing on a monthly basis.
Robert: And they're looking to shift that ratio of producers to non-producers. And this is a wild thing about the real estate industry. And the first year, 75% of agents fail out 80% within five years, every year. Nearly 95% of the transactions that, that number might be off, but I'm fairly positive it's done by about 10% of the agents across the country, right?
Robert: So there's a ton of non-producers out there, even in those larger brokerages. And it doesn't matter if you're just a one-off brokerage that has 500 agents or part of a larger franchise that has 500 agents. those brokerages are overcoming failure with volume. And I wanna find those brokerages that don't have that volume and don't have that recruitment in place to go out there and actually [00:38:00] recruit the right agents for their brokerage.
Dustin: And can you sell to a franchise of all these, the big ones, like if it's Coldwell Banker or whatever, like that broker in my town here in Edwardsville, Illinois, the broker, Coldwell Banker, they make their own decisions. They can go hire you. Outside of whatever, the big company and the big company may offer some things and sell it down to them, but they don't have to use that.
Dustin: they can independently do whatever they want when it comes to education and recruitment.
Robert: Well, yeah, absolutely.
Dustin: Okay. And you're like,
Robert: I mean, by and large. Yeah.
Dustin: Yeah. I'm, yeah, I know that's a blanket statement, but I want to clarify. It's not like, well, if they have this shingle, I can't touch them because the big boys above them say they can't do anything with me.
Dustin: It's, they don't have that level of control. They get to do their own, their own thing when it comes to the work that you're helping with. So your sweet spot is like. Small to medium size brokerages, was it like 50 to 150? And they're very intentional about the recruiting and they want a much higher [00:39:00] than standard percentage of those recruitment of recruited agents to be producing within the first year.
Dustin: so that's their model. Versus we just have 500 and we just get a hundred new ones every year and most of 'em leave, but there's enough of 'em that make money that it works out. I mean, that, that's one model. But you're not trying to convert those people to your model. You're trying to go to the ones sort of mid-market who, who would understand and appreciate what you do already and they just want your help to do it better.
Robert: Yeah, 100%. 100%. I mean, 'cause in those cases, they're still seeing the same fallout rate agents are coming and going at the same rate, but because they have fewer producing agents. the work that goes into just maintaining a roster is just over the top difficult. So, recruiting 10 agents every quarter for a brokerage that has 150 agents, that adds an additional 40 to 60 transactions per year could literally double their revenue.
Dustin: That's wild. [00:40:00] So we're, we got, we're zoomed in now. We got the brokerages with 50 to 150 agents. They want to be very intentional in hiring agents that are top quality and can be profitable, and they're gonna invest in a way in helping them be profitable through education, coaching, accountability, community.
Dustin: so now that we got, like, that's who we're, that's who we're reaching. Those are Robert's ideal clients here. One question would be so, and right now you get those, but you get them basically like by shaking hands at a conference or someone, refers you directly, which is, most people's businesses when you really get to talking to 'em.
Dustin: it's very heavily based on referrals, which are great until it's not right. So, and I'm speaking to, someone who's done marketing longer than I have, like obviously having a machine or system that can more systematically bring you these folks in one option is paid advertising, but it's extremely expensive, highly competitive, and maybe not even that effective with this target market.
Dustin: so we wanna talk about some other strategies about how we reach them and have these, strike up these conversations that [00:41:00] don't require you to fly to every city where they exist and be in every conference. Right. so one question I like to ask sort of as a prompter here is who already serves these.
Dustin: Brokerage owners, like are there tax specialists, financial planning specialists, are there recruiters, like who's in their ecosystem already? That could be a more consistent referral partner for you who's already working with numerous of them at once. Does that make sense?
Robert: Yeah. So I mean, tax professionals definitely, mortgage lenders.
Robert: I mean, even though they're in the same industry, right? different service entirely, Appraisers, home inspectors, people like that would definitely, home trades generally speaking, would definitely be people that have relationships with, real estate agents, property managers. Another part of the real estate industry that we don't serve.
Robert: But that obviously, either has overlap because a property management company also has a brokerage, or [00:42:00] they have relationships with brokerages to manage those properties after investment companies come in and buy, I mean, there's, those are the ones that have the closest relationship with brokers primarily.
Robert: Right? they're the ones that brokers have the most interaction with, on a regular basis.
Dustin: I like that. And then are there standard services or softwares or anything like that. Pretty much these ideal brokers kind of use that if you had a relationship with them, they could also be a referral source.
Robert: yeah. there's platforms like, KV Core is a platform that, that I know of. 'cause my brokerage offers that, that technology. there's plugin developers. There's actually a very large community of real estate servicers and providers inside of,the high level community. So, and I was not aware until I presented at the [00:43:00] high level summit.
Robert: Yeah, there's, there was a lot of people that took interest in what I had to say at that conference because I was in real estate. So, and work with real estate professionals, and there's a tremendous number of others right there. There's, a lot of coaching outfits out there that, that service real estate professionals all.
Robert: Although they probably look at me more as competition than anything else. But, and,
Dustin: and in a sense, the schools, while they are currently one of your larger clients, by number, it sounds like in this model, they actually better perform as a referral source, right? Like it's the schools are placing their top agents with these brokerages.
Dustin: and so if you have a relationship with the school and they're like, here's the class of 2020 or, March, 2026, and, and you guys like the students are aware that you're there and like, and then trying to, I'm thinking like kind of a triangular relationship between you, the school and, and the brokerage who's hiring people through the school or from the school [00:44:00] that you should be, part of the trinity there, I guess of being a resource to both.
Dustin: But that. The schools are primary, connectors to the brokerages. 'cause I don't know, we don't have, we don't have time today to get into the whole dynamics of how recruiting happens without you. but obviously somehow they do recruit into brokerages and I don't know if, I'll just ask it real quick. Do a lot, is a lot of that recruiting straight from the school or is that sort of like the low bottom of the barrel?
Dustin: We don't really want the new grads. We actually mostly recruit from other successful brokerages. Or like, what's that look like?
Robert: it's really kind of weird. So there's this industry trend for brokerages to start real estate schools and then just offer free CE classes and then you are prevented by regulations from recruiting in class.
Robert: But nothing says you can't call them a week later and say, Hey, you were in class. Right. Sounds pretty similar to what these, marketing funnels are that we use. I mean [00:45:00] exactly the same sort of thing. so there's independent real estate schools. there's a good number of them out there that,definitely serve the interest of recruitment for the brokerage.
Robert: And, but a lot of people will just get their license and find the first brokerage that they find on Google Maps and stuff like that. So, I mean, it's, it just kind of varies by location and region and what, how much competition there is. I mean, here in Atlanta, because it's a larger market in the US it's, there's a, there's just a lot of weird stuff that goes on.
Robert: None of it wrong, I'm just saying weird. 'cause it's everybody's trying to get a leg up and by doing the same thing. So, but I, you're exactly right there, there is, there's a very close knit relationship between all of those entities that I talked about. Agents, brokerages, schools, and associations.
Robert: They have very unique concerns, but we all talk to one another. We all know what one another is. we're all aware of [00:46:00] what people are doing. In many cases, we serve multiple roles and in a variety of different, different organization types. So the, the referral partners would definitely be cross cutting in a variety of different ways within the industry.
Robert: And then outside of the industry, there's a lot of different service providers that could connect us.
Dustin: Yeah, and I mean, you bring up a good point. You have four buckets, and if you really want to get more brokerages on board, I gotta think one of the top referral sources to the brokerages is the agents, right?
Dustin: If like an agent hears you, let's say on a podcast and they're like. I love this idea of a professional standard or profitability. I really need help with this. I would love to be part of a coaching community. I'd love to be able to have someone to ask questions for, and I'll have this marketing support and they're calling their broker like, Hey, if you want me to keep working here, we gotta get, we gotta get signed up with this.
Dustin: 'cause I just heard about it and this is gonna really help me and our other top producers, and otherwise I'm jumping ship to someone who's got it. that's why there's that sort of bottom up, demand for these types of services. [00:47:00] And then you got like, the schools is more of the parallel and then obviously the associations is a huge awareness play.
Dustin: and that these brokerages are members of those that go to the conferences and the happy hours or whatever, all the networking events and all that, since it's such a networking heavy, business. So, I mean, I, one of the things I would, I'm taking away from our conversation, Rob, is your.
Dustin: you're primed for forms of, long form educational conversion, right? Does that make sense? So if we can get you behind a microphone and talk about, you're extremely articulate. You talked a lot about this, the profitability as a professional standard. Like, I think that becomes a headline that who doesn't want that?
Dustin: Like, they may not understand how to get it, which is obviously what you do, but I think getting you behind a mic to tell this story of like, this is what your standards should be. If you're a brokerage or you're an agent working at [00:48:00] a brokerage, or you're a school pumping out, people with new licenses, or you're an association, like all these things, but obviously focus mostly on brokerages.
Dustin: this is possible and here's why. Here's how it works. Here's why it's so important. I think that would be not only much less expensive, but I think more effective than, paid advertising, for example. Like it, it's hard to capture that in an Instagram reel, right? Or it's hard to capture that in an image, for a meta ad or something like that.
Dustin: But the ability to tell a story behind it and use examples and show people what's possible makes them realize that I didn't know this existed. I know this was an option for me, but when I hear it, I can't unhear it. Like, I know I, I really need this. Like, this is something I really need. I think that's part of it.
Dustin: And then you have such a powerful guarantee for the brokerages, right? It's like, not just like find warm bodies to put on your roster, but like, find 10 new agents a quarter with transactions and [00:49:00] don't pay me until you do. I mean, it's like the ultimate irresistible offer. So it's all about awareness and letting them know that this exists and how it works and why you're the one to deliver that.
Dustin: I mean, is that all kinda landing?
Robert: No, it's 100% the case. And I will tell you my struggle is. Figuring out the way to do that out in a creative way outside of the kind of normal industry way of doing it. and I love doing it the normal industry way, which is to teach classes and stand up and speak at conferences.
Robert: And I, not to brag, I'm a better effing speaker than most people out there. again, I, like I was joking beforehand, I'm not the best looking guy that's gonna present to you, but I'll crack jokes at the right time and I will know how to be serious at the right time. And I love doing that.
Robert: here in April, I get to have 10 minutes in front of education directors from around the country for associations, on the main stage at, the Beats Conference. And they do this [00:50:00] with 24 people every single year. And it is an amazing event that these people put on. it's put on by other speakers.
Robert: They get paid thousands of dollars every year, and real estate is very much because it is a relational business. I'm the new guy that nobody knows. And one of the reasons why I'm so thankful to talk to you today is the fact that you know how to break through noise by telling stories and connecting with people in ways.
Robert: and it's, from my perspective, the way to do it is exactly the way that you've done it. In this particular case, plays to my strengths. I just haven't been able to figure out how to. Flip that switch in the right place. And I take what I've learned from you, and I could definitely, continue to learn more through conversations like this and opportunities to, to learn like this.
Robert: So
Dustin: I appreciate that. And I think, I mean, what I heard there [00:51:00] is, and this was my assumption, but you sort of confirmed it, is like if we can get you behind the mic in front of a group of people who are either the broker or the agent, or they're one of these, decision makers at a school or an association that will work, right?
Dustin: So it's just a matter of how do we replicate and scale that? And there's obviously a significant limit to your ability to fly to every one of these rooms and speak to 20 people in a conference room or whatever, right? Like, and we take those opportunities, we can get 'em, you get on a big stage at the association and talk to the education directors, like you said.
Dustin: this is gonna sound a little bit like. when someone's like, when you're a hammer, everything looks like a nail, So predictably, one of the ways I think that would be super effective at this is podcast casting, which obviously is a thing that we do and we're known for, but there's so many real estate podcasts that I know agents and brokers listen to.
Dustin: and, investors and, mortgage brokers and tax professionals in the real estate industry. Like there's such a rich, base of [00:52:00] education for this. And what's cool in your case is the story's kind of universal to all of them. And they, if they're not the broker, they all know the brokers. And the brokers are some of their top referral partners, right?
Dustin: And so I think this could be a very, like, it just, I guess where I would kind of end us here from a prescription standpoint. That's my advice is like, if you are on a real estate related podcast once a week. From the comfort of your office there with your theory of constraints, books over your shoulder with this story that you've pretty much laid out.
Dustin: Obviously today we got much more into like money and, offers and all that, but, sticking to more of the vision for this and how it actually works and how to do recruiting differently, would be a really obviously, key que key teaching for the brokers. It's like reframing how to think about recruiting, how to think about agent performance, how to measure success.
Dustin: And then, you're a marketer, then you have a strong call to action that's probably not going straight to like in, you would sprinkle into the interview and. [00:53:00] Like, we not only do this, we guarantee the results. Like everything we do is based on performance. So I know this works 'cause that's the only way I get paid and we get paid a lot because this works well.
Dustin: but, and then at the end you have the call to action to bring 'em over into,a, a free gift, a lead magnet basically. Right. To get 'em over into your emails and, then you could, I'm sure convert well from there with some more education and letting them know how to take that next step.
Dustin: I know you've dabbled in podcast guessing. Is there anything that sort of held you back from that? I know, I know you already knew it as an opportunity, but is there anything here, provided any clarity for that? Or is there something you might wanna pursue more as you're thinking forward?
Robert: No, it's definitely, I mean, every coach needs a coach, right? and again, for the things that I do know, I've always, I've taken what I've learned from you in those four weeks that we spent together about 18 months ago, and I just haven't got it to land, right? I don't know if that's because it's to the wrong podcast, or I haven't done enough volume of sending out, or I haven't set up the follow up the [00:54:00] right way.
Robert: I mean, it's those types of things, the mechanics that I don't have any intuition for. I mean, in TOC we talk a lot about intuition being a driver for, figuring out solutions. And it's very sufficient to understand the logic. I don't understand the logic before because. And I just kinda look at it like, you sold something much harder to sell from a podcast than I, I have, I do think I have what I have and it's real well dialed in.
Robert: but I mean, you clearly have demonstrated for the world that it is a door opener that people that have an interest when you're talking in the right places. And maybe it's just not the right places that I've been trying to go for, or the right methods to get in those places. And,it's refining that practice in a way that produces consistently and predictably.
Robert: And,the last, I'd say the last six [00:55:00] months has really been driven by, connecting with people that I've connected with in the past, like you today, Christine Marie's become a real good friend over the last year, and she was another person at TF. TNC, mark Degrass, all of these people that we, we know through the community that we belong to.
Robert: It's been great practice, but it has to be a lot more focus than that. that's the thing I need help with.
Dustin: Yeah, I was gonna say,and as I was reflecting back too Yeah, we'll continue this conversation after we, we end here. But, as far as some more tactical things, to give you some action items from a standpoint of like much more specific, but I think as sort of a summary statement, what I would say is, you have the right story.
Dustin: You have an amazing offer. Then a lot of times that a lot of times these interviews start with help me with my marketing, and it turns into half an hour talking about their offer and like, your pricing is kind of screwed up. Or, what about the continuity aspect or this, what about the front end of this?
Dustin: How are you gonna remove the risk from this? Like this sounds. Confusing. You [00:56:00] have none of that. Your offer, especially for the brokerages, is beautiful, right? You're articulate, you have a great story. So it's really just connecting the dot between getting that story to in front of the right audience so that they're aware of the offer.
Dustin: And then you're a great marketer, right? So I think in this case, it's really about directing the right story to the right audience with the right call to action at the end of that interview. Right? and yeah, so we'll talk more about that and I'll help you put together, a list of very specific podcasts to kind of go beyond what people probably want to hear, on this show.
Dustin: But, yeah, what would you say as we're closing up here, is your biggest takeaway so far from this conversation?
Robert: exactly what you've always said that I probably haven't listened to with as much attention as I needed to, or just, I've got such a thick skull. It didn't sink into the right degree, but be, you don't have to be in front of.
Robert: The right people at every instance. You have to be able to connect with the right people in the right ways. And like you said, being creative [00:57:00] about the podcast focus, but creative about the type of places to be in. because I acknowledge what you have said. My strength is in storytelling, making the offer and connecting with people on a personal level.
Robert: that's what sets me apart from so many people in, well, I mean, I just think in, in life general, not to be an arrogant asshole about it, but, I think I've,
Robert: it.
Dustin: It's not arrogance if it's true. Right. cool. Well as we close out, Rob, tell people like maybe there's some realtors listening. we serve a lot of different types of entrepreneurs. I'm sure there's some realtors or some real estate investors, maybe some brokerage owners listening.
Dustin: But if people are just like, I gotta check out this guy's stuff. 'cause his offers are like blowing my mind. where should people go to connect with you or what would be a good next step for people from our conversation?
Robert: Yeah, [00:58:00] so visit, rob.leix.com. That's ROB dot LESI x.com. You can get access to scheduling a discovery call if you want one, and you can just join the Rolodex and we can send each other stupid memes on Facebook if that's the way that you wanna connect.
Robert: but I tell everybody that all of our connection points are right there. We do produce a tremendous amount of content for Lasix that is all oriented towards real estate. So even if you don't want to talk from me with me, you can learn from me. but here's the thing about that discovery session is that it's completely free and in an hour you will see the path to profitability in your brokerage that is specific to your brokerage and your experience.
Robert: So even that free hour we spend together is gonna answer more questions than you would get from. Fill out this form and download this lead magnet.
Dustin: I love it. So ROB, do [00:59:00] Leix, which is LESI x.com. So rob.leix.com. You guys can go connect with Rob. Yeah, he's a great, just a great social media follow.
Dustin: But, if you're in the real estate industry, obviously I go book to call. You've already heard his brilliance on display here, even though I, we weren't here to teach about his methods. hopefully enough of that got through that you can understand the value,that's available to you. So Rob, man, it's awesome to reconnect with you.
Dustin: I absolutely loved unpacking your business and, man, I. Honestly, if you don't double this year, I think, we're doing something wrong. I think, you have all of the most important parts there and it's just getting a little more exposure, so other people, so the right people know about it. And I'm excited to help you do that.
Dustin: So.
Robert: Well, I'll tell you, it's a privilege to spend time with you. I consider you a celebrity and anytime a celebrity knows my name, I feel like I'm just a little bit bigger in the world. So it, it means a lot that I gotta spend some time with you.
Dustin: I'm gonna flag this part of the interview and send it to my wife.
Dustin: Someone thinks I'm important here, so, alright man. Well, you're awesome. Thanks again for being here. It's great to spend time [01:00:00] with you.
Robert: Appreciate it.