Most real estate brokerages are barely profitable because agents chase cheap leads instead of building referral businesses. AJ and Crystal Johnson built theirs on 80% referrals, hired people who work hard, and installed systems that hold the team accountable without burning them out.
How is it possible that, you know, some agents are able to scale their businesses profitably and sustainably where most of the industry struggles to survive? You know, success in our industry isn't guaranteed. And this concept of scaling a profitable real estate business that's sustainable, I want to break that down for you. I want to talk about, you know, not every real estate business is profitable, but brokerages for the most part are not profitable. Most real estate teams are marginally profitable and the team leader has to stay in production to make a decent living. This concept of sustainability means that the thing can run without you grinding it out all the time. So when you think about the journey from agent to owner and you know, how someone are able to do it and earn really good money and do it sustainably where they can take time away from the business, it's a step by step process. And I put together a training that I want to give you access to. If you stick around to the end of the video and make sure you give me the thumbs up if you like these videos, make sure you subscribe to the channel and turn on notifications so you're the first to know about new videos when they drop and also leave me comments. You know, this conversation about profitability and sustainability and scaling a business in an industry that has set us up for failure. You know, the, the veteran agents in our industry, according to NAR, National association of Realtors, are making $71,000 gross commission income. Gross commission income. So that's before expenses, before taxes, Right? There's not more than probably $2,500 a month after taxes. A 16 year veteran. So how is it that real estate B school, we're able to train up folks to take their unfair share of the market, to do it profitably and also sustainably where they could have a life outside of real estate. In real estate B school, we talk about more money, right? That just makes life easier, easier. It provides for more freedom in our life from stress and also freedom of time to have more of an impact in our families and in our communities. You know, one of our members who's been in our world for going on five years now is AJ and Crystal Johnson out of Washington D.C. their journey was a little bumpy in the start. So when I talk about scaling a business on the right economic model and on a profitable and sustainable model, it came down to honestly assessing where they were at and at the time. And Crystal will say this, she said it publicly, so I feel like I can say it. AJ had surrounded himself with a bunch of Buddies that weren't willing to work so culturally their business was never going to be successful. They did about $26 million the year I started working with AJ and Crystal, and the business didn't have a chance of scaling. So the first thing that they did in their journey and fast forward, the punchline is that they've tripled their business, you know, and now they have just an amazing culture. The first thing they had to do was honestly assess the people in their world. And if you haven't started a business yet, aligning yourself with the right people, people that are willing to work, that have patterns of success that fit your core value values, that is the number one ingredient to be able to scale profitably and sustainably. I would say the second thing that they focused on was, you know, they weren't going to pay a bunch of money to a bunch of really smart marketers to generate leads for them. The Zillows, the realtor.com's a bunch of junky pay per click leads. They committed to serving their clients and getting those clients to sing their praises, getting referrals. 80% of their business, and I'm talking a $90 million in volume real estate business, 80% is referral based. And all of their scripts, all of their dialogues, the way they handle their clients, are geared toward loving and serving the people around them, leaning on each other in the process. And as a byproduct of that, they're getting business from people that know, like, and trust them. So ask yourself in that journey, you know, in your business and the journey that you're on, you know, are you really loving and serving your clients? And then I'd say the third thing is that the cadence that they've installed in their business is a cadence that allows their team members to be successful, to be loved, and also to be held accountable. You know, to me, accountability is love. Accountability get that has this negative connotation where I say, hey, I'm gonna hold you accountable to that. You know, it's not this sort of lovey feeling, right? As a team leader, though, it is our responsibility to hold our team members to a standard that allows them to live a bigger life than if they weren't in our world. And that opportunity to impact somebody's life and to do it in a way where we're not gonna pull back a punch, we're gonna have a tough conversation, because at the other side of that conversation, that team team member has a choice to step up or step out. And either is fine. As small business owners that want to build high performing businesses and we want to, you know, have sustainability and profitability so we can have some freedom to be present in our families, but also to impact our communities. It's not going to come without some hard conversations. And they're willing to have those conversations, AJ and Crystal, where before they weren't willing to have them. And I would say the last thing that I've seen these two awesome individuals do is to give each other grace and to give their team members grace. You know, we've gone through a lot in our world and we've gone through elections, we've gone through tough economic times, we've gone through pandemics, we've gone through stuff that is just hard. And to give team members grace and to support them when there's something bad happening in their personal life, to know that this is a long term commitment we've made to each other, that's one failure I did early on in my leadership is not really to be fully committed to a team member like, hey, no matter what we come against, as long as you're going to show up and you're going to be honest with me and I'll be honest with you and we'll work through stuff together. As long as you show up and do the work, you will have times where you fall down and I'll have to come alongside you and pick you up. I get emotional saying that because I didn't always show up that way. Now it's just a different approach. And I've learned that from members like AJ and Crystal, how they show up in their businesses. And so if you're at the point in your journey where you want to make this journey, maybe you have a small team started or maybe you're a solo top producing agent and you want to build a business that has sustainability, is profitable, built on the right economic model. It has, you know, standards and accountability. Yet it's not icky accountability. And there is tracking in place and recruiting systems and agent onboarding systems and you have a place planning system and you know, you have, you know, high quality leads coming in your sales conversion systems and client care, all of them that is running, you know, efficiently. You know, just come into our world and let us help you. I put together a free training that goes through the five steps for you to go from where you are today to building out a seven figure real estate business. Just go to realestate business freedom.com, that's realestatebusinessfreedom.com where I'm going to lay out exactly step by step what you need to do from a mindset perspective, from a marketing perspective, from a sales perspective, and from a who you surround yourself with perspective. So go to realestatebusinessfreedom.com if you like the video, give me the thumbs up and make sure you subscribe to the channel, turn on notifications and leave comments below. We'll see you in the next video.
