Agents Building Cashflow

EP167: Building a Real Estate Empire with eXp Realty and Social Media Strategies with Connor Steinbrook

• Connor Steinbrook

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Investor Army creator and Founder of eXp Realty Wolfpack, Connor Steinbrook, shares his journey from real estate investing to building a massive real estate organization with over 3,400 agents across multiple countries. He breaks down his formula for success, focusing on decision-making, leveraging teams, and creating wealth through both transactional income and residual cash flow. 

Connor also discusses strategies for building a business using social media and how the real estate landscape has evolved. Tune for more of his valuable and actionable insights!

Key takeaways to listen to:

  • Why building a real estate empire begins with making a decisive commitment and sticking to it.
  • Generating long-term wealth by focusing on both transactional income and cash flow.
  • How to use recruiting and teaching others to recruit to scale a large real estate agent team.
  • Leveraging social media and inbound marketing to exponentially grow a real estate business.
  • Using creative financing and BRRRR strategies to scale a real estate portfolio quickly while maintaining liquidity.

About Connor Steinbrook

Connor Steinbrook is the Founder of the eXp Realty Wolfpack Organization, which boasts over 3,200 agents across all 50 states and 13 countries. In 2022, his organization closed more than 3.5 billion dollars in sales, completing nearly 10,000 transactions globally. As of May 2023, Connor was ranked #1 out of 88,000 agents at eXp Realty and is recognized as an eXp Alpha Agent.

In addition to his success in real estate, Connor is the creator of Investor Army, a top real estate investing YouTube channel with over 41,000 subscribers. With more than a decade of experience as a real estate investor, Connor is also a leading social media coach and content creator, sharing his expertise through the Connor Steinbrook YouTube channel. His deep knowledge of real estate investing has made him a sought-after expert in the industry.

Connect with Connor Steinbrook:

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To connect with Randal and learn more about passive investing, visit www.ridgelineig.com and follow our social media pages below!

[00:00:00] Connor Steinbrook: I think people should be doing both. I think they should be building on the investment side, transactional house flipping wholesaling. So they're doing transactional income and then controlling houses and building cashflow. So flip a house, keep the house. That's why I teach them on sale side, sell a house, add an agent.

[00:00:15] Connor Steinbrook: So transactional income, reoccurring income, transactional income, add some stock wards. So selling houses and doing deals keeps the business going forward, life going forward, but wealth has been created through the equity positions and the cashflow and reoccurring incomes on the side. But you should be doing it all.

[00:00:29] Intro: If you're a real estate agent earning 200, 000 a year, and you want to grow your passive income, this show is for you. Learn secrets other agents use and hear from experts in our field who will guide you on your journey to investing in assets like apartment communities, so you can take your commissions and turn them into cashflow.

[00:00:49] Intro: Here's your host, Randall. Let's dive in. 

[00:00:51] Randal McLeaird: All right. Welcome back agents. Today, we've got a special guest. We're bringing on Connor Steinbeck. He is crushing it at eXp has over 3, [00:01:00] 400 agents. He's built a massive team in a very short period of time. And it's interesting when you talk about investing, and my background is heavy in investing fix and flip and that sort of thing.

[00:01:09] Randal McLeaird: And I've always likened that strategy to having a product, right? If you're on the investment side of the business, you are creating a product and you are selling that product. And if you are on maybe the brokerage side of the business, you're really in the service based business where you're reliant on customers to sell a house, right?

[00:01:26] Randal McLeaird: So you're marketing for different things. And so the risk on investment strategy is a lot more in your, it's a riskier play is how I always think about it. And talking to Connor made me remember how I've thought through this many times in the past, because, and I've talked about it with other guests on the show as well, where I'm like, if you want to go out as an agent and de risk your investment strategies, all you have to do is start working with investors as an agent who do the type of strategy that you would like to do.

[00:01:55] Randal McLeaird: And then you learn it from them. Connor's taken it to where he has built a [00:02:00] massive business that grows exponentially over time. By building a business, right? The business of the brokerage. And so we talk about his unique skills of building a team, how he grew so fast, so quickly partnering with people, the Wolfpack mentality that he's got.

[00:02:16] Randal McLeaird: And so it was great conversation for me to have with somebody who is just out there really putting it together. And I love what he's working on and doing. Hopefully get something out of the show. Again, we talk heavy on the brokerage side of the business, but Connor's also done a ton of investing. He started, cut his teeth on investing first and then he got into the brokerage world subsequent to that.

[00:02:34] Randal McLeaird: So wealth of knowledge information. We could have talked for a couple hours, I'm sure. And so again, Appreciate the conversation. If you're getting something out of the show, please go on written review and give us a comment, give us stars, however you want to do it. Appreciate that. If you have questions or anything, definitely reach out podcast at agents building cashflow, happy to chat with you about anything we discuss on the show at any time.

[00:02:54] Randal McLeaird: So without further ado, let's bring on Connor, jump into the show. Here we go. All right. Connor, welcome to the show. It's good to have you on. I'm [00:03:00] excited for this conversation because one, I've been following EXP for a while now, and then looking at what you've been working on and building out such a massive team.

[00:03:06] Randal McLeaird: Just want to talk about how you went from zero to 3, 400. Is it now agents and what that looks like on a day to day basis for you and just managing that. So a lot of questions around that, but maybe, yeah, let's start with. How did that happen? 

[00:03:21] Connor Steinbrook: First step is you got to make a decision that you want to do it and that you got to go somewhere that you could do it.

[00:03:25] Connor Steinbrook: So you got to go to a company that has large market share, global saturation around the world so that you can actually have the ability to have a big enough market share to build a big enough team. 

[00:03:33] Connor Steinbrook: So the first thing is you need to be at the right place with the right market share and the right comp model to be able to do it. Then the second is you just have to make the decision to do it. Most people don't make the decisive decision. And with conviction behind it to be successful, whatever they're doing, they just kind of drift.

[00:03:46] Connor Steinbrook: But it is that first step is making that decisive decision. This is the path I'm going down. I'm going to figure this out. No matter what I'm gonna show up at the outcome. I desire no matter what. And I'm going to work at this until it happens. And that's the key to success is to pick a straight line to the future that you want and not deviate from it.[00:04:00] 

[00:04:00] Connor Steinbrook: Now, the actual three steps to build like a really big business or build a big team, especially in the override model. We're network marketing or MLM model is first, you have to start your own business. So step one is you have to, at least in our business, you have to learn how to recruit. Nobody's going to start your business, but you're going to have to get it off the ground yourself.

[00:04:17] Connor Steinbrook: So you have to personally learn the art of agent attraction, going out there, learning how to attract agents to your business. Now that you have agents in your business, this is not a recruiting business. It's really a training leadership and duplication leverage and scaling business. So you're not going to go out and recruit 3, 400 agents and manage 3, 400 people.

[00:04:32] Connor Steinbrook: That's not how it happens. You need the collective leverage of everybody working together. So step one, learn how to become a great recruiter. And as you learn how to do this. Now you can teach how to do this. So the second step to win is teach agents how to recruit. So learn how to recruit yourself.

[00:04:45] Connor Steinbrook: Now teach them how to do what you just did. Now you start having duplication leverage. So now you start having agents in your team going out there. Let's say you learned how to recruit 10, 20, 30 agents. Now you taught them how to do it. Now you have agents in your team going out. They're sponsoring agents.

[00:04:59] Connor Steinbrook: Now, the third step [00:05:00] is the full on leverage and the system systematizing it and for duplication. So first, first step, how to recruit. Second step, teach how to recruit, basically become a leader. So now they're teaching agents how to recruit and now you're removed from the system.

[00:05:15] Connor Steinbrook: And so that, that line or that business inside your business is going to grow on its own. But recruit, teach how to recruit, teach how to recruit. And that's, if you can master those three skill sets, you're going to build a big enough business that you never have to worry about money. And you're going to have a good life.

[00:05:28] Randal McLeaird: Yeah, that's awesome. Okay. I'm going to jump into that in one second, but you talked about. Making a decision and then sticking with it. So I know that you were big into investing. You were doing all kinds of different types of transactions, mobile homes, that sort of thing. So how did you get to a point where you were like, okay, I've made a decision.

[00:05:46] Randal McLeaird: And what was the catalyst that got you from the heavy investing side of the business into the broker side of the business? 

[00:05:51] Connor Steinbrook: So as you scale your businesses, because you're going to go into multiple of them over time, it's always a relationship between time and money. And so sometimes the beginning, you have [00:06:00] no money, but you have all the time and later you have money, but you have no time.

[00:06:03] Connor Steinbrook: It's vice versa. Sometimes you have none. Sometimes you have a lot of both, but I was trying to figure out how to build a big enough residual income as fast as I could, my goal is a 100, 000 a month reoccurring residual income, and I was working towards that. And I had career goals to get there through rental properties and owner finance notes and other residual reoccurring income streams.

[00:06:21] Connor Steinbrook: Now, the problem with most of them are their linear models, meaning if I want to buy another rental property, what do I have to do? If I'm going to do like a buy, fix and refire burst strategy, I have to source the deal. So I have to go out there and market for it. Then I have to find the financing to close on it.

[00:06:34] Connor Steinbrook: Then I have to go through the construction to get it to drive that value up. Then I have to go back and put a tenant in it and then refinance out and repeat it. So if I double my portfolio, I'm making 500 on that property to go to 1000. I have to do the exact same effort. Find deal source and go through that whole process.

[00:06:50] Connor Steinbrook: Whereas the growth model with an override system, there's leverage to it. So I could bring a partner and sponsor John Smith on my first year. Now, if John Smith is a great recruiter, so I actually [00:07:00] sponsored the number one recruiter in the world. So I brought the number one agent that you speak globally.

[00:07:03] Connor Steinbrook: He sponsored over 500 people personally. So that would be the equivalent of going and buying 500 rental properties for me. If you want to look at that way. So there's leverage. And as more agents come into the system, they all have the ability to go out there and build their own business.

[00:07:17] Connor Steinbrook: It would be like, as if all your rental properties had the ability to grow legs and arms and walk down the street, start growing their business too. So there's leverage and duplication to it now. Also. There was big benefits for me to get my license over the years, which I put off for too long. And all sorts of times we're getting referral deals and low equity leads that come into office that we can't do anything with.

[00:07:36] Connor Steinbrook: Yeah, just a lot of benefits to doing so. But mainly what happened was I was blown eXp off for over two years. I wasn't licensed and everybody was harassing me. We all know what it was like when eXp was taken off. It was, they were, everybody's trying to build a business. There's a lot of greed in the eyes of some, but others really knew what they had and they were doing a good job building it.

[00:07:51] Connor Steinbrook: But I was traveling around the country. After saying no for two years. And I was speaking at an event in Mississippi and one of the speakers at the event was the number one team leader in the [00:08:00] overall team size, the largest team at eXp was speaking at that same event and I spent three days with them.

[00:08:05] Connor Steinbrook: And I couldn't escape. And he showed me, he was making over a hundred thousand dollars a month and he did it in just over two years. And I was like, it's like that Wolf of Wall Street movie where it's like that scene from the diner. They're like, you proved to me, you're making 72K a month. It's just like that.

[00:08:17] Connor Steinbrook: I was like, Rob, you proved to me, you're making six figures a month. True net cashflow, no tenants, no termites, no toilets, no back end management system, none of these extra expenses and risks and liabilities. I'll go get a license and I'll grow, build, go build this around the world with you. And that's essentially what happened.

[00:08:31] Connor Steinbrook: And so I went and got my license. I joined the XP 2018 was starting. And so we're a little over six years into this, we now have 3, 400 agents. I think we've sold, we're closing up almost 7, 000 houses for the year already. I think to go back and look, but yeah, that's how it all started is finally getting in proximity to someone that I think I got close enough that I could touch that it was real.

[00:08:51] Connor Steinbrook: And I just was like, I got to do this. I was like, if I don't do this, I'm gonna look back and wonder why I didn't do it. But that's why. [00:09:00] I end up going down that direction. 

[00:09:02] Randal McLeaird: Yeah, no, it's incredible. When you put it that way and you think about growing a business in general, and how an investment in a business that can grow on its own, and you have teams of people working for you going out, and that's one way of exponentially growing your personal wealth and income.

[00:09:16] Randal McLeaird: But this is something different. I briefly looked at it full disclosure. We, I'm a broker and I looked at it, one of the guys that you had on your show, Chris Bounds, he was talking to me about it. He's a real estate investor as well, but it just didn't resonate at the time. I was like, Oh no, I'm flipping house.

[00:09:29] Randal McLeaird: I'm doing this thing. Nothing. How do you compare today, 2024 compared to 2018 when you signed up? Like it was ripe. It was a new thing. It was a new kid on the block. It was super easy, maybe easier than it is now to go out and sign agents up. But that's just me looking at it from the outside. And so is that true or is it just as easy today to go out and build a 

[00:09:49] Connor Steinbrook: big team?

[00:09:50] Connor Steinbrook: Truthfully, it's going to be a little bit harder to build a big team now, but the way these companies work is in the beginning, you have a bigger market share cause not as many people have gone through the company or seen it yet. So the traction abilities [00:10:00] easier. So there's two different things that create a net growth in a business like this, you have the front door in the back door, how many come in versus how many leave.

[00:10:05] Connor Steinbrook: So when the company's smaller. It's newer. It's easier to catch attention. There's less run through rates. Many people came in and said, had a bad experience or whatever it is. So you can attract more, but the problem is attrition is higher in the beginning. Cause in the beginning of businesses, there's growing pains.

[00:10:20] Connor Steinbrook: So there was a lot of issues in the beginning of eXp where they were scaling and system issues and things like that. Now, where we're at now is the company's bigger. So there's a little bit less market share, but the company's Light years better as far as like an actual company, what is actually like a really good company.

[00:10:35] Connor Steinbrook: Now, the joke was in the beginning was all we do is recruit agents, but now we're the number one brokerage in the world and independent for transaction count. So we're now number one in the world for transactions, but also for growth, the size we're at. So the company has got, it's a really great company now in the beginning.

[00:10:50] Connor Steinbrook: Not so much, but now, so you have less agents that you can probably attract, but you're sticking rate in the attrition is lower, if that makes sense. So I'm beginning to bring more in, but [00:11:00] attrition is higher. Now you can probably bring a little bit less, but you have a better company and you're going to have more long term partners.

[00:11:06] Connor Steinbrook: But over the years, they've improved a lot of systems and continuously added stuff on, but you're never going to get like any company, like that initial jump in the very beginning, those exponential windows only last for a year or two, every company ends up going to a lower exponential or even a linear growth.

[00:11:21] Connor Steinbrook: But I tell people like sincerely obviously each person is a little bit different, but I truly believe that it's still easier, even 10 years to come into a company like this and build a reoccurring income to 6 figures or multiple 6 figures than it would be traditionally. The way I was doing it to a rental portfolio and that type of process.

[00:11:37] Connor Steinbrook: So I think people should be doing both. I think they should be building on the investment side, transactional house flipping wholesaling. So they're doing transactional income and then controlling houses and building cashflow. So flip a house, keep the house. That's why I teach them on sales side, sell a house, add an agent.

[00:11:53] Connor Steinbrook: So transactional income, reoccurring income, transactional income, add some stock wards. Selling houses and doing deals keeps the [00:12:00] business going forward, life going forward, but wealth is being created through the equity positions and the cash flow and reoccurring incomes on the side. But you should be doing it all.

[00:12:06] Connor Steinbrook: But you can definitely, we've had people come in and still build businesses quickly. There's a lot of variance on the type of person that they are. So anybody that really wants to take it serious can, but I would say if you're not going to take it serious, you're not going to do it. And that's probably the case with any business, but that's my take on it.

[00:12:23] Randal McLeaird: All right, for sure. Okay. Break it down for me again. It's been a long time since I've looked at it. I'm just curious. I want to know if, again, I'm a broker, I'm like, Hey, this sounds great. I want to come over and do this. What is the timeframe or not maybe timeframe, but what is the, the transaction volume?

[00:12:36] Randal McLeaird: And maybe that's not even the key metric that you guys look at. Is it like, I need this many agents before I start making money on a residual basis? Or I need to have a hundred transactions a year before making some residual. I don't know what that number looks like, what those metrics are that you guys are tracking.

[00:12:50] Connor Steinbrook: Yeah, so we only earn revenue share during an agent's capping window. So we're on an 80 20 split 16, 000 cap. If an agent's doing a full 3 percent commission, they're going to cap it around 2. [00:13:00] 66 million. As far as the sales volume, you only earn revenue sharing during their capping window, because after we cap, we go down to a flat fee shop rate.

[00:13:07] Connor Steinbrook: So if they're selling a hundred houses, that's not going to help you as far as your income going up and beyond that, except it's going to be great for them. And that person, and it's, they'd be what's called an icon agent or company. They get their cap back and company stock, but someone's on a hundred houses would be a good partner because they're an attractive individual.

[00:13:24] Connor Steinbrook: Successful. And also people want to be around in proximity to that person so that you can help them help attract more agents. But as far as like production, your rev share gets, it stops for the year and caps when your partners cap. So you only have a rev share during the capping window. And then as far as the transaction volume, usually people are capping between seven and 12 houses is usually what I see.

[00:13:43] Randal McLeaird: So yeah, you want to go wide with agents doing at least two and a half. And that's where you are making the most

[00:13:49] Connor Steinbrook: range. Yeah. So you never like, so a lot of people get out there and tell you, Oh, you're going to make this per agent. You can only play with the range. So there's variations.

[00:13:58] Connor Steinbrook: So let's say I had a hundred [00:14:00] agents and you had a hundred agents. What if you had a hundred brand new agents that had a hundred capping agents? So there's the variance there. Then there's also, we have a seven tier growth model and each tier is a holding vehicle itself. You can look at it as an individual business.

[00:14:12] Connor Steinbrook: If you want to look at it. Do that those eyes. So if you pull out your back office, you can see how many agents are on each tier at any given time. Now each tier has a different percentage payout and a different qualification to open up that tier. So you may have a hundred agents where you sponsored one, if sponsored one, then you had someone build out the bottom side of your business.

[00:14:30] Connor Steinbrook: If you don't have those qualifying paying tiers open, you're not making anything, but if you went sponsored 20 agents and then those 20 each sponsored a handful, and now you have a big business on your first two tiers, you could be making a large income. So what I usually see people is they make anywhere from 400 to a thousand dollars per agent per year from what they started with.

[00:14:49] Connor Steinbrook: So if you started the year with a hundred agents, most of the businesses I see are making 400 to a thousand dollars per agent. Per annum, if that helps. Yeah, that makes sense. And it can range [00:15:00] because of a lot of things qualifying for tiers. The price point of the market also helps because they're in Canada and the Northeast, like one or two houses, caps and things like that.

[00:15:10] Connor Steinbrook: Even leases are high in those areas. Okay. 

[00:15:13] Randal McLeaird: Yeah, that helps. I appreciate that. So I want to know again, how much in the nitty gritty are you on the actual training of the. Hey agents, you need to go out and do X, Y, and Z in order to get more business. Or is it more, Hey, I'm going to train you how to go get more agents.

[00:15:28] Randal McLeaird: Which way would you say you're more 

[00:15:30] Connor Steinbrook: comfortable? So I'm more on a, I'm more of a, yeah, I'm more of an entrepreneurship coach, so I train them on how to understand personal excellence in every area of their life. So how to work on their health goals or financial goals or relationship goals or community goals or faith goals.

[00:15:43] Connor Steinbrook: We focus on building the person 1st and the person will go find the skill sets later. So we go into communications systems, time management, all the traditional stuff. We go into how to. Recruit brokerages, how to recruit individual agents, different types of companies. We're going into laws of business, [00:16:00] law of attraction, vibration, polarity, compensation.

[00:16:02] Connor Steinbrook: I teach them all how these fundamentally work and why these work. I do a lot of self esteem and self image building and help them understand who they are and what they are. But yeah, we cover the whole gamut. We cover social media. Paid strategies, organic strategies, proactive and reactive, meaning reaching out to people and placing content to have people reach back out to you.

[00:16:20] Connor Steinbrook: We're going into AI. We go into team building. Most of what I talk on is team building. I run a live mastermind call every Monday from 10 to 11. It gets anywhere from 50 to 300 agents on it live every week. These calls are archived. So everybody that joins us has access to these calls.

[00:16:36] Connor Steinbrook: There's. I think over 200 of them now that are between one and three hour mastermind calls. And these are the actual calls that built the Wolfpack organization lifetime that were recorded. So while we did this, we became number two in the world last year. So those are the actual calls that the agents learn those skill sets on.

[00:16:50] Connor Steinbrook: So they get access to all the mastermind calls. I run a Wolfpack investing mastermind call. So twice a month, I run a live investing call. And then all those calls are archived into investment academy. We're going [00:17:00] into. Creative financing, lease options, different types of lease options, like straight line, lease options, sandwich, use options, assignment, lease options, creative financing, creating and selling notes, because about one in four or one in five agents are also an investor.

[00:17:12] Connor Steinbrook: So if there's upwards of half a million agents out there in the market share that we can work with. So we focus on investing and then we go into a lot of social media. And then we also focus on production, but also the company really provides a lot of great production coaching because we have what's called an icon agent.

[00:17:27] Connor Steinbrook: This is someone that's doing 20 houses. 20 transactions after the cap each year. So it's like a top one or 2 percent agent. And those are who coach our agents in our company. So you're going to learn from all of our icon agents and they coach on their specialty. So let's say they're an IgE specialist.

[00:17:41] Connor Steinbrook: They're not just going to go coach on Facebook. They're going to coach you guys specifically on Instagram, and then they're going to find a specific icon agent for Facebook and stuff like that. But so then we run. Nightly explain calls. We have calls throughout the week where you can invite agents to learn more about the model.

[00:17:56] Connor Steinbrook: And then the last thing is I do, I'm actually boots on the ground, like in the game [00:18:00] helmet on next to my partners, like I'll be on calls with them. I'm in the calls when we're helping brokerages come over. I'm going back and forth with corporate and illegal teams direct to the top of the company at a lot of these executives I'm good friends with and have a lot of respect for, and we can do things quickly and get answers quickly.

[00:18:16] Connor Steinbrook: So I help transition teams and brokerages over. I hop on calls with you guys when you're talking to. Influencers and things like that, but those are all some of the stuff that we'll work with you guys on. 

[00:18:26] Randal McLeaird: Yeah, man. Okay. So you're a busy guy. Yeah. All right. I want to break down a few of the things then that you go through with the teams, because a lot of the listeners, real estate agents looking to invest, trying to figure out where to invest or where to start or how to grow their active income, which is their broker side of the business.

[00:18:42] Randal McLeaird: What are some of the things that you're seeing across the company with again, 3, 400 agents that Some of your reps are doing that is generating the most business right now for like agent. Yeah. Yeah. For growing like listings, buyers, that sort of thing. Just like top producers. What are they [00:19:00] working on?

[00:19:00] Randal McLeaird: That is, that seems to be working the most. 

[00:19:02] Connor Steinbrook: Yeah, the biggest producers out there have cracked the code to inbound reactionary social media marketing for sure, whether it's organic straight through YouTube or IgE, or they're using paid ads in some way, but like we had a freshman agent, his name is Suman Kim.

[00:19:16] Connor Steinbrook: He broke Texas state record with us his first year and did 67 million in sales. And the next year he did. It was either, I think it was like 83 million. Don't quote me on it. It's in the eighties or something like that. All through YouTube, a lot of our, the number one recruiter and the company who's my partner, Mike Gerard, so you guys know, he did it all through inbound agent traction.

[00:19:34] Connor Steinbrook: So the reason why that's the number one strategy is because of leverage of time. If you're doing most strategies, they're one to one time unit relationships. Meaning if I go knock on a door, I'm trading my time one to one. Whereas if I took that 30 minutes and I put it into a 30 minute video, And then put that video on the internet.

[00:19:52] Connor Steinbrook: What happens if a hundred thousand people see it? I have a hundred thousand time unit relationship to the one unit I put into it and also what social media [00:20:00] does for the clients is one of the biggest conversion struggles people have. Why their conversion rates are low is the report building side. When they come to the property, when people are watching you on YouTube over three, six, nine, 12 months, or following you on social, they're going through that report building process already.

[00:20:15] Connor Steinbrook: And so the conversion rate is extremely high for the leads that you work. When they come inbound, because when you pick up the call, they're only calling you, basically saying, don't mess this up. Like you have to mess it up at that point because they've already vetted you from the alarm report building process behind the scenes.

[00:20:29] Connor Steinbrook: Whereas when you get into a call, let's say you're marking to a list with direct mail or something like that, every lead comes in is cold. You have to take that to a. To that whole report process. So the leverage of time on the backsides higher the, and then just, you can reach out on a much wider footprint, but that's by far the how most are doing it now.

[00:20:47] Connor Steinbrook: Okay. A lot of them do it. Yeah. Good. 

[00:20:50] Randal McLeaird: No, sorry. I just want to ask on that. Can you break down here's the strategy that I've seen work or this is how he did 63 million because he structured his videos where they went out [00:21:00] sequentially or some tactic that somebody else could replicate. 

[00:21:03] Connor Steinbrook: And just go, y'all type in Suman Kim, so type in Suman Kim, his YouTube channel.

[00:21:08] Connor Steinbrook: And you can just go back and watch, he does property tour videos. So he goes out to the new build pre construction properties and he films but the thing that he does that gets him in front of everybody is speed delete, he's, everybody else waits for this kind of Subdivision to get up and go and he's, let's say a new property comes available.

[00:21:22] Connor Steinbrook: He's out there getting it done 1st and he's putting out there 1st. So when he puts that address or those keywords on the Internet, it's the 1st thing that the algorithm is going to crawl when someone types that property. And so he's making sure to get out there speed wise to get it out. There, but that strategy, a lot of people are using, it's not just assuming a lot of them have used this new construction, go film the properties and then put those out there.

[00:21:45] Connor Steinbrook: It works better for you guys. If you're in a migratory market where people are moving into your market, not away from it. So the reason why Suman's done well is he was from California, moved here to Texas. Then he helped out a few of his friends and then there's a bunch of people moving from California, Texas.

[00:21:58] Connor Steinbrook: So if you guys are in a [00:22:00] market where people are moving to, that's a really good strategy. Now, if you're in a market where people are moving away from it, you may have to look at different strategies there. And I don't know what to tell you right there, but You can still get a transaction on the way out.

[00:22:11] Connor Steinbrook: You just find someone like Suman in Dallas or wherever that Florida is another one or Arizona. And then you just connect people for referral fee at that point. And then that person like assuming in Texas is going to. Be like, Hey, that's served it up for me. I'll go do the deal now and just partner with them.

[00:22:28] Connor Steinbrook: But that's a good thing about being an agent is you can do referral deals and you can pass leads to people. 

[00:22:34] Randal McLeaird: Yeah, 

[00:22:34] Connor Steinbrook: for sure. 

[00:22:34] Randal McLeaird: Okay. So then let's get some of the strategy on the social media set. What's another, before we go back, cause I want to talk about the recruiting and how you recruit some of the things that you're working on, but sticking with growing that active business and active income as an agent that's one and it sounded like you were going to say something else or go down another path and I cut you off.

[00:22:53] Connor Steinbrook: I don't remember what I was going to say, but yeah, a lot of people doing businesses through referrals, traditional marketing strategies, neighborhood canvassing and being [00:23:00] the dominating an area, meaning instead of just doing 10, 000 houses, one touch, they're taking a thousand houses and touch them 10 times, but really canvassing that area once they know a good area, just all the traditional strategies that people are like, the thing is, guys, if you're in, if you're hearing stuff out there, people are doing like direct mail, paid ads, paperclip, all this type of stuff.

[00:23:21] Connor Steinbrook: Anything works if you've learned it and work it enough. So it's just, do you want to do that? So some people will never put themselves on camera, but they'll cold call day. And then the other person will never call a single person or knock on a door, but they'll film videos at home all day. So what you need to do is find out what you would be comfortable doing.

[00:23:40] Connor Steinbrook: And also you need to look at relationship between time and money. So there's time strategies and then there's dollar strategies. A time strategy would be. Pulling out your MLS and work in expired listings and just reaching out to them. Whereas like a paid strategy, you're running paid ads, right? So you need to look at your individual business, where you're at time and money.

[00:23:56] Connor Steinbrook: And if you guys don't have a lot of money right now, don't feel bad. I didn't do my [00:24:00] first deal in real estate till I was a hundred thousand dollars in debt. You do not need money to do this business. You need goals and work at a thing, the belief that you can do it and never giving up until you figure it out.

[00:24:07] Connor Steinbrook: But you need to figure out your individual position. How much time and money do you have to put towards your business each month? Then look at all these different strategies out there, watch as many YouTube videos as you can. And we can give you ideas when you come with us and we teach a lot of these strategies, but it's not more what you're doing.

[00:24:22] Connor Steinbrook: It's will you do it long enough for where you'll figure it out and what work for you, because if you're going to do something, that's going to burn you out, you're not going to do it anyways. And if you can't afford to do something with a big enough sample size where you can get real data to see if it's working or not in split testing, then you're not going to know long term if this is going to work or not, you're going to have too much variance in the short run of your sample size to decide if this makes sense to keep marking behind it.

[00:24:44] Connor Steinbrook: Yeah. Yeah. 

[00:24:45] Randal McLeaird: All right. Let's dive into then that the actual recruiting side. Again, you built a massive business. How. Long after you joined eXp, did you really start to see growth in the number of Asians? Was it right away or took some time? How did that grow?

[00:24:58] Connor Steinbrook: Yeah. So like my [00:25:00] first year, I think I recruited 40 people for Xero. So I personally attracted like 40 or so. 

[00:25:05] Randal McLeaird: Yeah. 

[00:25:05] Connor Steinbrook: And at the end of my first year, I was just over 150. So I personally attracted like 40 of my businesses. Like 150 or so total across all those tiers. And then we got to, I think we just over doubled and got right over 300 the next year.

[00:25:19] Connor Steinbrook: We just over doubled again to 600 the next year. And then we had a really good year that year. That's when I brought Mike Sherrard on and a couple other great leaders. And also that was the big pandemic kind of explosion. When everything took off, we added a thousand agents that year. I think we went from 600 to 1600 in one year.

[00:25:35] Connor Steinbrook: And then we went to 23 or 400. And then last year, I think we went to like low 3000 and now we're sitting at 3, 400. Something like 

[00:25:44] Randal McLeaird: that. And so again, when you first started, was there already training in place for eXp that you tapped into? Or it was like, I'm going to build this whole thing.

[00:25:52] Randal McLeaird: I'm creating this. Yeah. So you, okay. Yeah, that's what I was curious about again when I was talking to Chris about it back in the day, but [00:26:00] again, I don't know if he signed up with you or who he's with, but Yeah, Chris is with me. Yeah, he is. Okay. Yeah. Cause he was telling me he's, this massive training program is already built out.

[00:26:08] Randal McLeaird: You don't have to do anything. Just come on and check it out. 

[00:26:11] Connor Steinbrook: Yeah. So in the beginning, EXP, when I came in, they didn't even have like corporate company slide decks. Me being entrepreneurial coming in, I'd been building businesses for a while before this. So I think I had a good understanding.

[00:26:20] Connor Steinbrook: So I never came into sell houses. I came in just to build the business. What I realized was there was no infrastructure. There was no unity. Everybody was running around like a chicken with their head cut off. And so that's when I came up with the idea of the Wolfpack. So what the Wolfpack stands for is what do Wolfpacks do?

[00:26:34] Connor Steinbrook: They're family. They run together. They went together. They don't take on the world as a lone wolf. So the mentality behind what the Wolfpack is, it represents our revenue organization as a shared compensation line, but we're going to do it together. So that's when I started creating the mastermind calls and all the training academies and the investing course and all the stuff that I was talking about.

[00:26:50] Connor Steinbrook: Our value proposition, and then we branded ourselves. And so what that did was it created an environment to where you had extra value added on top of what eXp was [00:27:00] providing. Now there's teams doing this forever. Everybody's built teams, but what a lot of people did differently than what I did was they wanted to charge.

[00:27:08] Connor Steinbrook: So they're all running production teams. They want 25%. I said, I'm going to run this. It's a production team, but I'm going to give out everything as if. It was just the revenue organization. There's no charge for it. So we give out more than what most people find, even what they're charging for. And then we didn't made it up through the volume.

[00:27:22] Connor Steinbrook: So I said, let's give it out. It's the same thing with social media, just a jab, right? Hook approach from Gary Vee, same thing we all do on social give out. And then later their outcome comes behind it, but that's the mentality. But I think that's why we grew so much is because we were giving our partners everything instead of trying to charge from it and everybody else around us was trying to.

[00:27:43] Randal McLeaird: Yeah. It sounds great. Let's talk about the investing calls that you're doing then. What are you seeing right now on the investing side? Is there like a new thing that people are pivoting to and saying, okay, this market is best suited for X? 

[00:27:55] Connor Steinbrook: Yeah. One of the things that is coming back to the investment world that hadn't been around for a long time is [00:28:00] buying houses off the MLS.

[00:28:01] Connor Steinbrook: I'm literally contracting today, a house that's been up there for, it was like 111 or 113 days. It was up there for 260, 000. I think it's probably worth 293,000 as it is. I'm going to have to put a little bit into it, but I'm getting them to come off almost 50,000. To buy this property and it's one in which all I'm going to do literally is put granite countertops in it and then drywall and paint like a small area of the house and it's good to go.

[00:28:26] Connor Steinbrook: It's already basically they put a lot of work into it. It's an estate sale, but there's no way in the world for the past few years since probably 2012 or 13, could you get someone to come off from a 260K price point down to 210? And this is like a good house. This is not like a structurally compromised, like frame house.

[00:28:44] Connor Steinbrook: This is like a nice property that you'll keep in your portfolio for your career. So I think people should be starting more conversations, making mobile offers on properties that have been up there for more than 60 days. There were in this weird stalemate where homeowners that have low interest rates don't want [00:29:00] to trade them in because they don't know if they can get a better loan.

[00:29:01] Connor Steinbrook: So they're sitting there. A lot of lenders have shut off. A lot of investors. So you're seeing a lot of the freshmen investment class, like new wholesalers and people like that kind of weeded out of the market. And right now what I would be doing aggressively is raising money because I've been saying this for years.

[00:29:15] Connor Steinbrook: Like when there's deals everywhere, there's money everywhere, but right now there's no money. So there's deals everywhere, but people can't get the money. So if you have private money right now, you can take these down. So on my Wednesday call yesterday, I did training. So what I'm going to do is I'm gonna buy three properties.

[00:29:29] Connor Steinbrook: I'm gonna pay about five and a quarter for these houses. Now I'm going to fund this with my own money. So I'm about three houses. I'm going to put anywhere from $90 to $115,000 into these three deals is what I figured. So on a low size, probably 90 high side of the range, 115. And then with all my carrying costs, basic, I showed that I'm going to be in the mid between $650 and $660,000 into this deal.

[00:29:51] Connor Steinbrook: Now I'm going to be able to go back to the bank. I'm pretty sure when I get it appraised. It's going to be a low $900,000 number. We'll just say $900. So when I [00:30:00] did the 80 percent refi on the example, I think I was going to be $720,000. And so I went through and I showed basically how all the numbers worked out.

[00:30:07] Connor Steinbrook: I showed all my carrying costs, utilities and everything. Basically I'm going to be pulling out probably a 60 to 70 check after refinancing have almost $200,000 in equity in this property and cash flowing private fit, or at least three houses, about $1,500 a month. And then I'm going to pull my money back out and I'm going to go do it again.

[00:30:23] Connor Steinbrook: And so instead of doing just like a one off BRRRR strategy, I'll do a multiple a time and then I'll finance them on one loan package, loan, portfolio loan, blanket loan, whatever you want to call them. It's just a loan product that you can finance individual, single family properties as one.

[00:30:38] Connor Steinbrook: Payment across all those, but, and then you take that original dollar and you go do it again. So what I was trying to explain to my agents the other day is why some people create wealth and why some don't. So let's look at why most people don't create wealth. Let's say I have a dollar. Okay. I have 1 in my hand.

[00:30:52] Connor Steinbrook: And then what I go to a gas station and there's a candy bar. If I buy that candy bar, what does that mean? My dollar goes from my hand to their hand, but the candy bar [00:31:00] comes to me. So I have no dollar, but I have a candy bar. Now, if I eat that candy bar, what do I have? Okay. I have nothing, no dollar, no candy bar.

[00:31:07] Connor Steinbrook: I'm completely broke. And this is what most people do with their money. As soon as they get it, they spend on something that it doesn't bring value back to them. They don't buy assets. They just waste all their money. Now let's say I go different route. I have that 1 now, assuming this is equivalent to buying a house, but just bear with me guys here.

[00:31:20] Connor Steinbrook: So now I take the dollar. Let's say I go buy a rental property. Like I'm talking about here. That's. At a low value, I'm going to renovate it, drive the value up, and I'm gonna pull my money out. So at the beginning, I have my dollar, I trade my dollar for a house. Now I have the house, but my dollar is still in that house.

[00:31:36] Connor Steinbrook: Now when I fix it up and force the equity value up, and I go back to the bank and I finance out, I'm gonna get my dollar back. But I also have the house. So look at the two scenarios. One had their dollar, and then they ate the candy bar, and then they had nothing. One has their dollar still, and they have a house.

[00:31:51] Connor Steinbrook: Now I can take that same dollar and go buy a new house, go through that same process and bring my one dollar back. Now I have two houses. I can do it again with that dollar. I can keep bringing it [00:32:00] back from now. We're talking about more like a couple of hundred thousand here, but you can raise that money through private money lenders, credit lines.

[00:32:05] Connor Steinbrook: I might be lines of credit, but essentially what I'm pointing out is you can use your same money to cycle it and out and build a portfolio with it. And so you start out with one house. And then as you build your net worth up, now you can do two houses at a time. Now you can do three or you can go into apartments but really that's the way that you guys can create wealth.

[00:32:21] Connor Steinbrook: And then also while you're doing this, you're getting the tax write off from your production business or you're flipping, whatever you're doing, you're going to get by acquiring this cash for real estate, you're going to get bonus depreciation and then your write offs. And so if you can buy enough real estate each year, you can wipe out a seven figure tax burden where you don't even have to pay taxes, honestly.

[00:32:38] Randal McLeaird: Yeah. 

[00:32:38] Connor Steinbrook: If you keep buying property. 

[00:32:40] Randal McLeaird: For sure. Are you focusing mainly on the BRRRR, that strategy? Because I know you've done notes and you've done a lot of stuff in the past. Why BRRRR strategy now? 

[00:32:48] Connor Steinbrook: Right now, because part of my career, guys, I was massively in debt. Just know you can get to where I'm at right now.

[00:32:53] Connor Steinbrook: But where I'm at right now is over a decade later, I've cracked the code of business and now I've got cash. And I've been [00:33:00] saving cash waiting for this moment because I can go and strike. Okay. So this deal that probably making a quarter million dollars, if you'd run the math on it, if you had to use a hard money lender, that's going to chop out price $70 to $90,000 of that deal

[00:33:11] Connor Steinbrook: if you carried it on those three properties to the refinancing window. So you can still do the deal with the hard money lender, but think about your profit goes down. So say you're now making 90,000, less than 250, people are like, that's still good. I'm what is that? 160. Don't get me wrong math, but what if you can't get to that 160 because somebody else can underbid you because if I have say $90,000 spread and I'm using my own cash, I can actually pay 45 grand more than you, but also still make 45 grand more than you.

[00:33:39] Connor Steinbrook: So this is how a lot of you guys are getting beat out by investors is they're not leveraging their money. They're using their own money, but they have limitations with their own money because the time value money and they don't have endless amounts of money. So let's say, so I'm basically going to take

[00:33:53] Connor Steinbrook: almost $700,000 of mine, put it into this deal, tie it up for six months and then pull it back out. But while that money is [00:34:00] tied up, I can't use it at that moment. But I can strike right now. Why I'm doing it this way is because I can strike really quick with not having to get hard money loans like this property right here.

[00:34:09] Connor Steinbrook: I made a decision just like that on. But, and I tell them like, as soon as your title company gives me clear title, I'll close. So I can go quick and I can strike fast. So you guys can find people that will partner with you raising private money. A lot of lenders out there will give you 8 percent if you look hard enough at no points or 10 percent with no points, but it's not that I'm opposed to doing other strategies.

[00:34:29] Connor Steinbrook: This is just the fast. So where I'm at right now is I'm trying to acquire as much debt as I can. Essentially, that's leveraged correctly. I'm not so concerned about the cash flow on the property because I got cash flow coming from other businesses. I'm more concerned about getting the property controlled for an equity play.

[00:34:45] Connor Steinbrook: So even if I pull my money out and let's say I'm only making like flat, I'm breaking even, but I can control a few million dollars with real estate. What happens over time is you'll season into the performance of the property. You're going to have. The market going up, hopefully principled being paid down by the tenant.

[00:34:59] Connor Steinbrook: [00:35:00] And then rent rates have historically gone up in time. And you guys can track how your rent rates are going up. So let's say you have a property that's negative a hundred dollars cashflow today, but you financed out all your money and you have the money to carry that a hundred dollars a month payment.

[00:35:11] Connor Steinbrook: Then let's say in five years, you may be making 500 a month cashflow. So if you can carry the properties and control it, I'm a big believer in just get the asset. Now, most people are trying to build their portfolio to create cashflow. So it really is depending on your position, but. If you have enough money to cover maintenance, and let's say you're barely making any cash flow, just controlling those properties, if they're strong performing properties in good areas.

[00:35:34] Connor Steinbrook: And also this area I'm buying in has been a growing market. They've gone from 10, 000 to 25, 000, almost 30, 000 people, and they're growing quick. So I'm not just stupidly doing this, I'm forecasting and watching like real performance data that it's going to season into a better deal, if that makes sense, 

[00:35:49] Randal McLeaird: yeah. No, for sure. It's, we talked a minute ago, you said you were investing some as an LPE in some apartment deals and that sort of thing. It's all likened to what I have seen on the apartment side. [00:36:00] 21, 22, everybody's selling on Performa. And that has gone. Mostly away from what I've seen lately.

[00:36:07] Randal McLeaird: Now people are actually like, Oh, we should probably actually pay for the actual, see what's actually happening at the property if you're still. You're buying it deep enough to where it doesn't matter on the single family side, like you're buying in the money and you're going to be in the money on the refi.

[00:36:21] Randal McLeaird: It's not the exact same, but even if you are net negative 100 per month cashflow or whatever, then it's still in the longterm. Yes, you're looking at the whole deal as a whole. And what I'm getting is that one, you need part cash or two, you need part cash. You are looking for assets that are going to offset some of your other income as well.

[00:36:38] Randal McLeaird: And you have the capital to go after those deals. 

[00:36:41] Connor Steinbrook: So that's where you guys are starting to think about. I'm sorry to cut you off there. So like I could finance out of this deal on a 15, year loan. Yeah. And so technically I could go down to 15 year loan. I may be negative cash flow on three properties, like $1,000 a month.

[00:36:53] Connor Steinbrook: But if I'm pulling out almost $70,000 refi check, What's a thousand dollars a month. That's $12,000 a year. That's going to [00:37:00] cover that for five, six years. And do you guys not think that the rent rates are going to go up enough to cover that? So it really depends on what your goal is. So if your goal is to try to create cashflow, you want to finance on a 30 year note.

[00:37:11] Connor Steinbrook: So you're going to have cashflow today, but if you've got your other businesses, let's say bringing in 20, 40, 50 K or more a month from something else, like you don't need to, so you always just need to look at. That's why it's specific for that individual. Now, the reason why I invest in apartments like that is it's a quick dump into at the end of the year.

[00:37:28] Connor Steinbrook: So let's say, as I'm coming into 3 weeks left for the year, and I need to, I got a couple 100 grand sitting there. I may not be able to find a house that makes sense in those last few weeks, but I can stuff it into apartment deals if it's going to drop my tax burden down. And it makes sense to do the deal now.

[00:37:43] Connor Steinbrook: I wouldn't just do it just for the taxes. That's how sometimes people overlook and get in a bad deal. I'm trying to do that, but if it makes sense, tax wise and the returns are sound and you've got a good GP team, you can get it in there quickly at the end of the year, put that way where it's not trying to source it.

[00:37:58] Connor Steinbrook: An actual house to [00:38:00] buy during the holiday window at Christmas, when everybody's, you're not going to get a house at that point. So it's, and it just diversifies a little bit. So I have some of my money in apartments, some of them single families, some in stock market, some in crypto. And so I just chop it, spread it around.

[00:38:15] Connor Steinbrook: But most of my money going forward is going to be in a single family rentals or apartments. 

[00:38:21] Randal McLeaird: Okay. Yeah. If you are, I know you just touched on this at the end of the year and you are looking to dump some money into an apartment deal. Yeah. Make sure you start in like November, September, something like that, vetting the sponsor, talking about deals.

[00:38:35] Randal McLeaird: Because you don't want to just throw money into a deal just to throw some money into a deal. Just a word of caution. That's good advice. Yeah, because I have a rush money 

[00:38:45] Connor Steinbrook: into a deal and it did not work out. So yeah, 

[00:38:47] Randal McLeaird: some good advice. Awesome. Hey, Connor, man, I appreciate you jumping on. I could ask you a ton of questions.

[00:38:51] Randal McLeaird: I know, but we're at the top of the hour. And what you've done, what you've built is awesome. It's great to see. And maybe I can talk to you offline a little bit more about eXp and what's going on. [00:39:00] Because when things tightened up over COVID it was evident to me as a real estate investor that having a source of income that was not reliant on just necessarily marketing dollars or the effort of a single type of investment strategy became evident.

[00:39:18] Randal McLeaird: And again, growing a business and having a group of agents who are helping you produce and helping pay your living expenses, that sort of thing is, it was very appealing. And yeah, we've looked at starting and increasing the brokerage side of the business and building that sort of thing up. And so you mentioned how you exploded during that time, because people getting away from.

[00:39:37] Randal McLeaird: Product based business, which is investing. You're selling a product, you're getting a house at the end of the day, you're going to rent it out, whatever. You're in the product based business to a service based business where people come to you when they need something. And it's just income from other people's activities is very appealing.

[00:39:51] Randal McLeaird: So anyway, again, I just wanted to touch on that briefly, 

[00:39:54] Connor Steinbrook: are you guys watching? You got to push them to join and then you guys can join with them. And we can go into, yeah, there's a lot [00:40:00] of other benefits just outside of the comp model. For example. We're selling a large five figure amount of houses each year.

[00:40:05] Connor Steinbrook: If you ran the business, what does that do? It creates big liability expense for counting. And so like literally last year, we sold well over 10,000 houses. I didn't see any pieces of paperwork. I didn't have to review any contracts. I carry no risk and liability. I had no CPA bill. I got a 1099 given to me at the end of the year.

[00:40:21] Connor Steinbrook: And so really, they do all this stuff that we don't want to do as business owners. Counting fundamental, all the back office management stuff. And then they let us focus on the fun stuff, recruiting agents, training of partners, doing transactions. And so I look at them as just like the partnership as the facilitation side of the business that I don't have to deal with, but I had a broker that he had a.

[00:40:40] Connor Steinbrook: 130 agents came in with us, he got sued and had a hundred was $187,000. He took it on the chin and he was like, I'm done. And that's why they moved their brokerage over is the liability side. But if you guys want to have that conversation, just let me know. And there's always room in the pack.

[00:40:59] Randal McLeaird: Awesome [00:41:00] Connor, man. I appreciate it. Thanks for jumping on. Catch you guys on the next episode. Did you know that 80 percent of the agents we speak with got into real estate in order to gain passive income so they could obtain financial freedom and become work optional. If you want to stay up to date, the best way is to make sure you're subscribed.

[00:41:15] Randal McLeaird: So if you haven't done that, go ahead and do it now. We'll catch you on the next episode. 

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