About

Today we have Dallas based agent and real estate investor Ian Flannigan. From an investment real estate agent to Ian has been in the real estate industry for over 15 years and has come a long way gaining a diverse background around investment property sales and distressed properties and has become an expert at it travelling around the country speaking on creative financing and topics.  Ian talks to us about what attracted him to EXP and his transition coming out of a franchise system and joining EXP. He touches on the things that led him to decide to move all of his businesses including his investment business his brokerage business etc. over to EXP Realty  He brings a business owners perspective not just a listing and selling agents perspective.  Learn More about eXp Realty - Click here to watch a quick 7 Minute Intro Video. 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. The Investor & Business Owner's Perspective  Creating Cashflow and building assets Benefits the Cloud provides Equity and revenue share Being the exponential earner Getting awarded EXP shares and becoming an EXP icon The compound effect on my revenue share & referrals  Predicting your income   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 contact Ian to inquire or ask questions. Contact Ian: Text at  214 213 1737  Links: www.EXPCloud.com   Take away "you borrow capital you'll leverage it against a property and then you receive that cash flow. The reality is not too many people ever get to that point" Ian Flannigan   Podcast Transcription Kevin: Welcome back to another episode of In The Cloud the EXP realty explain podcast I am host Kevin Cottrell. Joining me today is Dallas based agent and real estate investor Ian Flannigan Ian is going to tell us about his transition coming out of a franchise system and then working for a transaction based brokerage to decide to move all of his businesses including his investment business his brokerage business etc. over to EXP Realty and why he did that. He brings a business owners perspective not just a listing and selling agents perspective. Ian and I are going to talk about things ranging from equity revenue share and the other things that attracted him to EXP realty. Please stay tuned for my interview with Ian Flannigan. Welcome to the show Ian. Ian: Hey how's it going. Kevin: It's going awesome. I'm looking forward to our conversation now for any of the listeners the podcast that may not be familiar with you once you take a minute and give your background and history as far as real estate. Ian: I've been in real estate for almost about 15 years and I was a young hairdresser in my past life. We all have that story right? So you know I read that book Rich Dad Poor Dad and made me realize that I was you know spinning my wheels as a self-employed business owner. I didn't own a business I owned a job and just like you know we have friends that are attorneys you know real estate agents. Well you know all that stuff that they had these commission businesses and stuff like that so I knew that I had to make a change so I started studying real estate and I started flying around the country go into seminars was like a lot of people I didn't come into the business through the licensing side I came through the investing side which I really cherish that information because I have a very intimate knowledge of how the legal process works with pre foreclosures. We know probate houses people losing their houses the tax liens. I mean I've bought fire damaged houses all kinds of very interesting distressed property situations. I've become an expert at it and I've traveled around the country speaking on creative financing and topics like that because I ran a big seller financed real estate model for quite a long time and like I said I wasn't licensed I leveraged to brokerage's one in Oklahoma City one here in Dallas and we used all of our marketing and we ran all of our leads through them. I learned the business on both sides so when I was drafting my own contracts two years before I ever got a license so you know the market changed and I felt like I left a lot of money on the table so I started. I realized that like look I'm going to get go ahead and get my license because I'm processing so many deals through my investment company. So I might as well do it so you know I got my licence I hung out with Keller. Keller was a great company at the time, for me it wasn't a good fit. When I moved my licence over to a 100 % shop and it was a much better fit for my needs at the time but I had a big exit out of my investment company and everything that I had built over the last nine years kind of came to an end and I knew that I needed to buy and sell houses I knew I needed to list and sell houses but I also knew that I had to build more cashflow and I needed to build more assets because I just made an exit out of a company and it was a very interesting time in my life because I went through a legal divorce. You know I went in business with these wealthy individuals that were coming out of it luckily everything the dust settles all right. I came out OK but you know I knew that I had to build something again and when I saw the model with the EXP I was like oh my gosh this is interesting because there have been nothing like it that I've ever seen. So that's how I got to be. Kevin: Great! So you have a diverse background especially around investment property sales and distressed properties. When you looked at EXP you mentioned like myself I was a team leader at Keller Williams for a long time great company but the EXP is.. You know especially and I want to chat about this for a minute. It's a different model. When you talked about Rich Dad Poor Dad in thinking like a business owner that I think the industry has seen so there's a lot of noise and information out there that is confusing for real estate agents. In other words I want you to take a few minutes and talk a little bit about how you process this as a investor slash business owner because for real estate agents listen to this a lot of them have a commissioned sales job and they need some help understanding how to think like a business owner. Ian: You know that that couldn't have been the more perfect way to explain that because you know being an investor we have to think about OK how are we going to get money out in the market. This is how our thought processes we have X amount of capital we can leverage capital and we're going to put that money out into the market either short term or long term and then we're going to get a return on it's going to be a four month timeline a six month timeline. So that's what we're doing when we're buying and selling houses right we're thinking of it as a business it's not on the other side of the track where when you're listing agent it's a different experience because you don't own the house you're not responsible for the repairs utilities all that other stuff it's just a different ball game but it's a great way for someone to be able to get into the market and that's what almost drives me crazy about getting a real estate licence. Was I did that in a couple of weeks it took me almost a year to get a licence to cut hair in the state of Texas as it was mindblowing how different it was but my point is you know getting into real estate is the barrier to entry isn't that you know it's not very difficult. So there's a lot of people coming in and they don't really think of it like a business. They don't know that they have to put themselves out into the marketplace and sell themselves as a business owner so they get stuck in just that hamster wheel of the commission side of the business still thinking of it from an investment standpoint is like like oh my gosh this company... Forget the name forget all of it just look at your balance sheet and what are you doing on your balance sheet. Right you've got income expense asset liability what are you doing to create income in your business that you only have a commission type of business you only have one source. So this is the way that I see it because I built a seller financed model by leveraging capital we would raise millions of dollars actually. We didn't raise millions of dollars until after we placed it because one of our limited partners was our lender. So we had in-house lines of credit and I was buying you know five to 10 houses a month that I was selling them on owner financing and carrying back a note and we were archiving basically building a big huge spreadsheet of notes right. So once my mind opened to that like I knew that there were so many different ways to make money in real estate but once you find one model that you can't replicate and duplicate... And that's what exactly what I was doing with seller financing I was buying a house. I was renovating that house and that I was selling it and carrying back a note. And the more notes that I could create the more money I could borrow because we had we were building. A balance sheet of. Assets. Yes we had debt on it but. Our cash flow was compounding. Our interest was compounding. So having that experience with selling houses in volume like that and then carrying back notes like a bank that's what expanded my mind into understanding how to create massive amounts of cash flow and that's traditionally how you do it you borrow capital you'll leverage it against a property and then you receive that cash flow. The reality is not too many people ever get to that point even when they've been in real estate 15 20 years especially if they're coming from the licensing side of the world unless they have some mentors and coaches that were great that helped them put money back in you know build assets outside of their license that would be great. But most people never experience that. So when I saw EXP I really understood like oh my gosh like I got it immediately. Not only could I you know sell houses I could get you know software and technology to plug into to sell more houses because the training in EXP is you know second to none which people don't realize is the support and the training in the cloud is 100 times more effective more efficient. I mean the words just go on and on and on that describe how well you know it is and how easy it is to plug into the cloud. It's... The support and training is you can access it from anywhere in the world any time. There are no restrictions on getting in your car driving down to the road like that is gone that is over we plug into the cloud. So. That's one of the biggest takeaways of you know. Jumping into that is the time right we're all trying to... Maximize our time. So you know not driving down to offices. I had a huge office on the eighth floor overlooking. Downtown Dallas and I hated it because I had to get my car. I had to drive down to the office. Much more efficient with the home based office than I'd take my laptops and I got my Wi-Fi. So when I travel. I'm connected so. That I was the one thing is offloading that big expense of an office so that's the biggest thing that the cloud provides. And you know. To grow business you've got to reduce your expenses and grow your cash flows. And grow your transactional cash flow too. Kevin: So let me ask you a question regarding the business small as a business guy. You know so when you're traditionally a commission based business you know like you said that's one stream of income. When you look at the two big plays that EXP let's talk about the one being equity and the other being revenue share. The market really doesn't get this from the standpoint of the way startups work in Silicon Valley that's where I come from. You know so they look at it. I'm a real estate agent. I'm at XYZ brokerage I'm at independent it could be a big franchise. I go through my business I sell own a bunch of houses every year and either take listings and so on will get buyers at the end of the year or if I run my business well like you said I make a little bit of money. Ian: Yeah. Kevin: Now meanwhile there are people like Sherry Elliott who you know because she's in your marketplace that come on the podcast and go Hey by the way I'm buying a EXP stock for 20 % below on the commission plan. I've also been awarded it as an Icon for several years. You know I look at my account and I've got seven hundred thousand dollars in equity and if you'll look around a big franchise market center or office I would challenge you and you know this because you're in the marketplace. This is where the market doesn't get it right. There are not people running around with 150000 like I met an agent here in Austin or 700000 like Sherry Elliott where this is just occurring on automatic investment because the average agent just at the end of there like oh how many units did I sell. Ian: Exactly. That's you know the biggest part of about the business model is. Having that that potential to be what we call the exponential earner right. How you can scale a business. And adding stock and equity to your balance sheet. You know it's like sitting down with a financial planner and saying hey we're going to take a little bit of your cash we're going to put it here again take a little bit more your cash. We're going to put it here and then over time we're going to let this grow. And that's what people don't understand is. EXP offer's.... It's almost like a 401k for real estate agents. So as they're closing transactions moving forward paying into the brokerage we're actually getting a return on the money we're paying in. Right. Especially with the stock program that we have you know there's actually you know there's six different ways to get stock. One is to buy over the counter. Another is when you close your first transaction with the EXP you'll get awarded I believe it's 50 shares right now that could be off because the numbers are changing so fast I can't keep track of them but you'll get awarded shares of stock when you close your first transaction and then when you cap once you sell you know two point six six or about three million depending on what commission structure you're on 2.5 or 3 % whenever you cap you'll get more shares of stock I believe around 100 shares right now and then here's the cool part is if you sell 20 houses after your cap which a lot of team leaders do and a lot of brokers do they do a lot of volume or if you're a commercial and you sell about half a million then you can qualify to become an Icon. And then there's a panel that vote you and once you get qualified. You can receive your entire cap backing company stock which is sixteen thousand dollars just awarded back to you in company stock and that is pretty darn amazing. Because think about that. All the other franchise models that are out there there are great companies. You know. Nothing has changed in real estate in the last hundred years. Now the Internet has finally caught up with the brick and mortar real estate model. And no longer are agents being you know paying every dime in you know into their brokerages and not seeing a return on it. So it's a completely different mindset from this day forward of technology and growth and all that it's just changing the game in you know the billion dollars in expenses that all the big companies have. What do you think they're going to be in five and 10 years. I mean the internet has completely changed everything. But but that's why it's so important to build a future. And we haven't even talked about the revenue share. I mean you know as you're closing transactions you can be accumulating stock just through production. So every transaction you close your laying stock you have to think about that is building assets on a balance sheet. So back the very first thing we first started talking about where is why is what attracted me was understanding that I could build and compound more and more line items of assets on my balance sheet like in a spreadsheet. When you see cash flow coming at you in a spreadsheet and you see a total at the bottom and that total gets bigger and bigger and bigger and bigger and bigger by adding more line items of assets to your balance sheet. When I saw the revenue share model my mind was blown. And I've been in the company two years in what I've seen happen in the last two years. I mean I just stopped telling people the numbers because they're so big it just It's not relevant to them right. How does anyone relate to the kid that won the 450 million dollar Powerball in Florida. Like how is that relevant to me right. That's a massive amount of cash. It's like you know it's just one of those things. What do you think about that. Kevin: It's exactly what people miss. I talked to somebody last weekend. She's in Southern California and I'm glad you brought up the Icon program because as I started to ask her questions I could see that because she comes from a big franchise system that she was confused by the noise and information and other words they're trying to basically make it not clear that you're getting an equity award if you qualify for the Icon program of 16000 and that that's highly highly difficult to actually obtain that. Well as you mentioned either based on GCI or 20 transactions above capping. Ian: That's right. Kevin: There are very clear terms on how you qualify for this. So in her case she's got a big presence right. So I asked her some questions and just to clarify for our listeners in her case I said well how many referral fees on top of capping right she does about four or five million dollars a year. So she easily qualifies based on capping and she's in a high priced market in Southern California. I said well how many referrals did you do. She said I did I think somewhere around eight or nine referral fees that I got paid back to me last year. I said do you do any leases you're in a pretty high price market you've got to have people that are looking to lease houses and she goes I did it at least 10 of those on top of my real estate transactions. I said well just the referral fees and the leases are 18 transactions. How many did you do above. Approximately three million in volume. She goes well I have like another six transactions on top of that based on her pricing. I'm like OK well in our model you would be an Icon. Ian: That's right. Kevin: She's like I have no idea. I'm like yeah that's exactly how this program works. And assuming that you want to participate you're going to get all of your money back after you basically qualify based on transactions and you know the other structure and then for anybody listening to this you can certainly reach out we'll have some more information about the Icon program in this and other episodes. But don't let the marketplace confuse you. This is a real program. We can refer you to plenty of icons within EXP to talk to them about qualifying. Some of them have qualified for more than one year. In other words this isn't some promo special like you'd have at the car dealer where they're doing it once right. We have icons that have been here for more than two years that have qualified. Every year their hair. So the whole purpose of this podcast and I'm glad you brought this up is to have people understand because as a business owner at most brokerages there is no way to qualify to get your company dollar back. Right they just don't offer programs like that specially around equity which is an appreciating asset in most entities like this. So you absolutely are in a position to create value. I mentioned two numbers and now I want to tie this down. There is a agent I met at one of the meet greets right one of the EXP explained meetings and when this came up about Sherry Elliott in the conversation she said well I don't have a big mega team right. I'm a Capper. I do business and I've been investing in EXP stock through the program that Ian talked about where you can divert 5 % of your commissions. She said I have a hundred and fifty five thousand dollars in less than two years in my equity account. I would challenge any listener here if you're in a franchise or even an independent brokerage. Go look at your equity account and go ahead and send me a message if you have a hundred and fifty five thousand of your company's stock in there. And I think you and I know the answer is not unless you're buying at the market and you happen to work for a company that's traded right there's companies like Real Ajee or Remax or others out there that you could buy stock but you're not buying it for 20 % below market. Ian: Now you've got to buy it at today's value which it's been going down. Kevin: Let's transition a little bit to revenue share I'm going to give you my perspective and then I want to hear yours as a real estate investor so Gene-Frederic and I come out of the team a role or the regional owner role if you will at a big franchise system Keller Williams in particular but they all work the same way right. So one of the big things that were trying to basically make sure that agents understand is in a franchise system and if you are lucky enough to be around Keller Williams in the early days and this would be in the 90s right Gene-Frederic and Susan joined in the early 90s. They along with others had the opportunity to invest and buy regions right Gene-Frederic in particular with a couple of partners own Northern California Hawaii. Ian: I actually hung my license at DPR and live right down the street from where they used to live in Plano Texas. Kevin: That's awesome. And so for anybody looking at this the way regional owners are paid in franchise system and I'll speak specifically for Keller Williams is the royalties are taken off the top and they are paid half to the regional owners and have to the regional operating company in Austin. Right. So half and half. So one of the interesting variants of information out there in the marketplace is taking money off the top. It's not sustainable. Well if Remax does it if Keller does it. If all of the real Ajee franchises do this and if they have a regional operating partners or owners they're all paid this way then I challenge anybody that has been told that to go back and ask the person that told you this is this not how our franchise system the regional owners get paid. And the answer I'll just give you the answer is yes. So don't let anybody tell you that paying money off the top out of the revenue stream is not sustainable. This is exactly what EXP is doing. They don't have regional owners. From the standpoint of anybody buying in and owning Northern California Hawaii like Gene and Susan did with their partners. You are paid as a regional owner any EXP so to speak and I'm using that term broadly and loosely but it's the same concept off the top. Based on agents that are attracted to the company they become like your regional owner group. So with that as a precursor so people understand the concept here. This is not any different than what the franchise are doing. Ian what's your perspective on this as a business opportunity. Ian: So the way I see it and then you can correct me if I'm wrong that you know this is a big referral type of based payment right. Everyone understands. Getting a referral you mentioned the referral a moment ago. I have someone in California. I have a lead in California. I'm in Texas. I contacted agent say hey I have a great lead for you. They're jumping up and down because it's a five million dollar acquisition. So they think I've hung the moon. And I come and I go back to that same age and I say Hey. Here's the business model. That I'm operating around the entire country if you're interested in it and you're attracted to it and you like it. I could sponsor you into this model and then I could show you how to expand that. Across the entire United States as well. So now I sponsor that age in California. Now every time they close the transaction I'm going to get paid a referral fee. How cool is that. Right. And then every time they attract somebody. Into the company underneath them they could be in Seattle they could be and. They could be in. WASHINGTON They could be in Florida. They could be down in Alabama taxes Arizona. Every time those agents close transactions not only is that agent that I sponsored in California are going to make a referral now I'm going to make a referral fee off of another 20 agents. And wow the crazy thing about this model is every single person is on the same plan and they all want to expand their business so now I get organic compound and kind of like compound interest. So I'm getting a compound effect on my revenue share because now I've gone from two agents to 4 agents to eight agents to 12 to 24. I've expanded my revenue share business into 14 states and Canada and I just hit 84 agents and almost 30 of them hit my team in the last 60 days. So I'm now getting the organic compound effect of the duplication of what makes this lucrative revenue sharing model so amazing. Kevin: I've interviewed several independent brokers because their business owners right? They get blown away with is all of a sudden like Mitch Ryback and Florida they wake up and they're in 32 states in two provinces in Canada and they're adding more people per month than they had in their brokerage when they converted to EXP. Now you started from scratch right. You didn't convert a brokerage but for any agent listening here it doesn't matter if you're a single solo or and an agent that operates by themselves. You're a team and you're the rainmaker. You have an opportunity just to have when people ask you and I'm sure this happens right. And they like Tell me about the EXP. Why are you with EXP. You know somebody is going to listen to this podcast or other episodes and get it right. You're going to be able to have people have an understanding of the reality of EXP and to tie this down. From the standpoint of my comment earlier in the down markets right there is a several franchise systems including a very large one that operates on profit share. The regional owners and I'll speak to Gene-Frederic and his partners in Northern California. We're making a enormous amount of money in that 0 8 0 9 downturn. Most of the market centers we're not profitable for obvious reasons right. People's production were down however... because it's paid off the top the regional owners were making money like they were printing money and they felt guilty frankly about it. If you ever hear Gene interviewed about it he talks about the fact that they felt fairly guilty about the fact that if you're out there and you're thinking that it's all about profit share that's your reality check. We are going to go through another business cycle correction and you're going to see that when something is paid off the bottom at a profit. There's nothing wrong with that. It works. I'm invested removed partner. I was at Kellems for more than three years so to speak. And so I'm vested. I get paid profit share every month. So does Gene-Frederic. So do plenty of people. Now the difference is we're now comparing revenue share the profit share and it's a completely different model revenue share. Just to make it really easy is paid off the top like original owner. Like. I described earlier. Ian: And it's 100 % transparent. Kevin: It's very predictable. In other words.. Ian: You know exactly how much it is you can calculate it on your own. Kevin: And you can build a business around it in other words you've got to look at it like Ian talked about if you've got 80 people you've got 100 people if you've got like Pat Hays you have 800 people. You can predict very accurately. But here's what I expect at a minimum I'm going to make. And usually the numbers end up higher than what people are estimating. So let me ask you this before we wrap up today if somebody is listening to this and they want to do some due diligence obviously they can listen to this or any of the other episodes they can click on the link and watch that seven minute intro video that's in the show notes. What would you advise them to do as far as due diligence to really understand what the EXP is about. Ian: I would just refer you to some Web sites like you can really learn about the company. Number one is we're a publicly traded company right. That's one of the big game changers about this and why Glenn Sanford created this because he wanted everyone that was contributing to the growth of the company to be an owner and to be rewarded with it. So EXP world Holdings Inc. Is the site that you can do your due diligence and you can see our balance sheet. You can see everything about the company we're very very transparent. That's number one and that's the myth that everybody that's listening maybe for the first time or have heard something negative from someone else about the company like just forget all that. Do your due diligence were a publicly traded company EXPworldholdings.com The next thing that I would say is maybe we could take him over to the cloud side so they can see the training schedule they can see the agent handbook at EXPCloud.com. That's what I like to refer people to you know if you scroll down on that site you can see the agent handbook and you can read this and you can see exactly what the financial model is. And you can read through it. There it is it's right there in PDF form you can download it you can read it all the contact information for everybody in the company not everybody as far as the agent count goes. But now it's got Vicki in there it's got Jason Guessing in there. It's got you know Glenn its got their e-mail addresses in there. Everybody in this company is 100 % transparent. That's the great thing that I love about it so EXPCloud.com that you can see the agent handbook there. Kevin: Excellent.. which are the two suggestions I would give. I also would like to state this and I know that we're going to get your contact information before we wrap up. And when you're introduced to EXP the person that introduces you to EXP can get you in touch with Ian or anybody else or any of the people you interviewed on this podcast ask for references if that's what you need as far as your due diligence. There may be somebody that's from the same franchise you are with that you can chat with maybe you've never met them maybe you admire them and you respect them completely. That is the culture. As owners of this business that's also not apparent from the outside. In other words he and I'm sure you've had this happen we're all of a sudden you have somebody that needs to chat with somebody that's in another part of the country you reach out and say Hey John this person is from the same franchise that you were with. They want to talk with you. The answer I found 100 % is yes sent them my way and I'll be happy. Yeah. And it's not that clear from the outside. And so now with that even if somebody listens to this and they want to chat with you a little bit more directly what's the best way to reach you. Ian: I mean best way to reach me is by text at 214 2131 737 and I'm in the Dallas market. This is my backyard and I've had a lot of fun. I still do tons of fix and flips I actually have some pretty huge renovations that I document put on Facebook and LinkedIn and stuff like that and I invite people to come out and check them out when I'm done. Kevin: Fantastic. Appreciate you coming on the show. Ian: Thanks buddy. Thank you.