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