VISION Will Always Be The Key to All-Round Success w/Brett Jennings

This is Real Estate Team Builders, and I'm your host, Lars Hedinborg, the founder of Real Estate B School. The real estate team building world is driven by big egos who boast about how many homes they've sold or how much GCI they've earned. We don't hear much about their low profit margins, the long hours they put in each week, or the unbearable stress they endure. In fact, I've discovered that most real estate teams are losing money when you consider the amount of personal production their owners must do to make ends meet. I believe that if you want to profitably scale your real estate team without working crazy hours, enduring unhealthy levels of stress, or coming up short at home, then thinking like a business owner, building sustainable systems and empowering your team are absolute musts. You won't find any smoke and mirrors or hype here on my podcast, just the real world tools, systems and strategies that work. So if you struggle to balance growing your real estate business with focusing on the areas of life that truly matter, then this show is for you.

All right, what's up, Real Estate Team Builders? This is Lars Hedinburg, the founder of Real Estate B School. This is going to be a fun journey here. Brett Jennings, who is out of Silicon Valley, California. I've known Brett. We were just catching up for probably over 10 years now. So here's a guy that had this incredible vision of growth in an industry that generally has a bunch of mindset, limited folks in our industry. And the journey that we want to take with Brett today, I think is going to be super valuable, is like, how does a guy go from a million GCI to going down the path of team building and traditional team building, maybe 3, 4, 5 million GCI, and now is doing 30, maybe 40 million GCI? And so that's a lot to unpack. We're going to unpack it in a very specific way. But, Brett, just give us a quick overview of kind of your backstory, two minutes or less, and then we'll tell most of it as we kind of unpack your. Your journey here.

Sure, sure. So. So I, like many people, backdoored into real estate, right? I didn't come out with the intention of going in and becoming an agent. For me, the journey was I owned a couple of businesses before real estate. The last one was in financial services. I grew that business for five years, had about 300 clients, and noticed that all my best clients own lots of real estate. So I sold that business in 2006 and was kind of trying to Figure out where I wanted to focus. But I knew I wanted to be real estate based. Honestly, I had an aversion. I did not want to become an agent. I had some weird ideas about what realtors were from what I seen on shopping carts and bus benches. And I don't think Modern Family, the show had come out yet, but the concept of a Phil Dunphy was what I did not want to be. Right. Anyway, I decided to start on the mortgage side of the business. And this is in 2007. I get licensed, get trained up. My mentor says, hey, if you want to do well in mortgage, you got to go land the business of top Realtors. Here's the list of the top 100 agents. Go get them. So it took me two and a half months, but I interviewed 42 of the top 100 agents in the county, and I landed accounts with five of the top 20. But the process dispelled some, like, just stinking thinking I had in my mind about what. What agents were. And I realized these top agents, some were very successful. They were cool. They had great lifestyle. So I started to like that. That kind of cracked the mold for me a little bit about what realtors could be. And then it was, you know, as life or fate would have it, I'm 30 days into my mortgage career, and Bear Stearns collapses, and my wife is eight and a half months pregnant. And so I'm like, oh, crap. You know, it was an oh, crap moment. And, you know, you were not able to get loans done if you were a new loan officer at that time. And one of the top agents that I was serving his business, he said, hey, dude, you're a sharp guy. I like your. Like, I think you'd be do. Do really good in real estate. Why don't you join my team? So my first year, although I could have been a solo agent, I did join a team. And he ended up leaving the business the second year. And the rest kind of was, was, we would say, was history. I, you know, did start in the downturn, so was heavily focused on short sales and then grew the business, I think around 2011. Lars, is when you and I first met. I knew being focused just on short sales that that market would turn sometime. And so I started seeking out, you know, top producing agents and teams. And I think we connected through Jake Hinder and Michael Reese at the time and that community. And that really opened my eyes to what was possible because I'm in an environment where home prices are high. You know, at that time, they were maybe 500,000 where the rest of the country was like 150. And nobody was selling more than like, you know, 15 or 20 homes a year in my market because they just get comfortable. So it was great to see people selling hundreds of homes and that, that kind of put us on the path to, to scaling up.

Yeah, it's awesome. And I have just a massive amount of respect for what you've done. Let's unpack the journey here from sort of solo agent wanting to sell more, but let's unpack it first when it comes to like leadership and vision. Then we'll get into sort of building and developing people and then we'll talk about the importance of an operations team and how you've sort of leveled up the backstage of your business to support this growth. So let's talk about leadership and vision. Generally when you think about like hiring your first administrator, you know, we all get into business, we have a license, and then we get busy and we're like, oh crap, you know, I need help. And so talk about what was the vision? How'd your leadership have to develop so you can sort of hit these massive growth trajectory that you've been able to achieve?

Yeah, well, I think it started, you know, for me once I hired my first assistant. My first assistant, like I made the most mistake that most agents make and they hire by proximity. Just, hey, whoever is close, that's easy, that they're friends with, you know, that, hey, come on and join me in the business. I think that was my first assistant hire and I realized her limitations when we started trying to push past 40 transactions. She did not have real estate experience. So then I think I learned the first leadership lesson and that is don't hire to where you are, hire to where you want to be. And that requires a bigger investment. Probably it's going to be more than you're comfortable with. But I ended up partnering with who's now still with me, Michelle Upon a Horn. She was, I think 10 or at least 10 or 15 years in the business at that time. And she had served and been the administrator and she'd served a lot of different roles for one of the first people who ever really had a real estate team before there were real estate teams in our market. So I'm like, hey, she knows how to do marketing, she knows how to do the transaction, she knows how to do all this. So she came aboard and that was when we really started to grow in earnest. And I think we added boomtown as a lead generation platform. At the time I started Hiring agents. And that, I think was the first leadership lesson. I think that a lot of emerging team leaders struggle with is what I'll call this chasm. And that is when you go from being highly profitable in personal production. Maybe it's just you with an assistant and you're banging out 25, 30, 40 deals, and then you say, okay, I'm going to do this team thing now. And when you do what a lot of agents don't initially factor in is that your net profitability will go down. Right, because you're now going to add agents and you've got agent commissions to pay, you've got leads to generate for those agents to pay for and then the additional support. And I think that, you know, I, I know I've experienced that twice in my business. That first chasm, you know, going, being that emerging team leader when I started to add agents. And that, that was, that was a challenge. But I had a vision for the business and I innately enjoy working with and creating success with and through other people. And so that was way more fulfilling for me than it was to help a team sell 100 houses than it would for me to tell 70 on my own. And so I think that's one of the first things that people, agents that want to grow, need to get clear on is that, you know, understand that your, your percentage of profitability will go down before it goes back up. Well, your percentage actually doesn't grow up as you scale it, but your, your, your total net profit and dollar volume goes up and it, and it takes, it takes some time to get through that. And so you have to, you have to have something in you that, that is seeking more than just monetary income. I'll call it psychic income, spiritual income. Like, I, I have a bit of a coaching background and I like that pouring into people and help. So you've got to have that or find it. And I think Lars, actually, I don't know if I've ever told, I think I have told you this. Yeah, you actually helped draw that out for me in one of your intensives that you guys did focus specifically around the E myth. And we did a deep dive in there. And it's a really powerful exercise about, you know, why are you in the business that you're in? Why do you do what you do? And the eulogy exercise specifically really clarified and crystallized my vision. I recognize, like, come to the end of my life if I'm, you know, passed away and people are my service or whatever, I'd hope there'd Be a lot of people there, but I know they're not going to be saying, hey, Brett was a great guy because he sold hundreds of houses. It really helped me get clear that it was because I loved, you know, I live full out. I loved helping people learn and I loved helping people grow. And that would be my legacy. And so that when I put that at the heart of my business, it was interesting what happened. I came home from that retreat and I didn't have agents that really wanted to grow and learn. And three of them left my team. Like the day I got back, I was like, oh crap, God. Kind of knocked the sandcastle down real quick and said, hey, let's help you rebuild here. But what did freak me out at the time, but just being clear about it, having that purpose of that vision, bigger than money, to cross that chasm when you have to invest in more in people and resources to go to that next level of growth.

So tell me, go a little bit deeper into vision. I think people really struggle with this. When you're in the life, whatever life you're in right now, that includes real estate, it includes having kids or having a wife or whatever is going on in your life. Talk about how you were able to use vision to be able to push you to that next level. Or was it, you know, you always had a clear three to five year sort of vision. Like talk about the practical and tactical piece of vision.

Yeah. So to talk about that piece of vision, that really dialing in the purpose. Dialing the purpose. What I just spoke about was actually, if I look back, that was a major turning point where I began to have a vision that was bigger than, hey, I'm going to build a team with five agents and make a million bucks. The purpose piece of it is really what kind of crystallized it. And I now realize, wow, this is because prior to that, my plan was, hey, I'm going to make money in real estate. I'll buy cash flow rentals, develop passive income, and then go back to coaching and mentoring. Because my business, I mean my experience prior to starting companies, I worked for Tony Robbins for two years and it was awesome. I totally enjoyed having those conversations, high level conversations with people, high minded conversations with people about their life and their business. And I wanted to go back to that. And it was just, it was ironic that I got a real estate team and I could be coaching people and I wasn't really coaching at that level. But that gave me the vision that, you know what, while my business can be a vehicle for me to express my personal purpose. And then what if this finds its full expression, its full potential, what could that look like? And for me, the first stage was really building out a team. And I had just, like I said, a couple agents, a few agents at the time. And we ended up growing the team to about, about 13 agents. And that was about like kind of where I was finding the limits of my personal team. That, where I still wanted to feel connected to, to, to all those, those agents at that level. But that was, you know, really dialing in the personal purpose was, would help bring clarity to, to the vision of what my business could be. Because that was the question. The question was, you know, who are you really? Was the first question about the personal purpose. And the second question was, well, if that's who you really are. For me, a person of learning, growth and development, I want to bring that to other people. What does it look like in my business if I brought all of who I am to everything I do? And that was the clarifying piece for the vision.

That's interesting because you and I have had many conversations like, what would it look like to get you into like, you know, coaching? And then so you just kind of flipped it around where, like I am, you know, God is placing me here right now to coach and lift up these people versus like thinking you have to get the business and the operations feeding you money to go do this other thing. It's almost like your business is the ministry, right?

100%. 100%.

That's really, really awesome. So let's shift gears a little bit. You made a comment before we hit record. You said something like, you know, it's this realization where you have to make the world big enough, where people, you know, you have to expand at a rate where people can fit their dreams. I forget how you said it, but repeat that. I've heard it before, but repeat it. And how does it relate to sort of building and developing people?

100%. So, so, so the first, you know, starting the team and then having that insight about clarity of vision, I think I was two years into building the team. The team collapsed and then basically refor and took a different trajectory. Right? Like we were now in this like hyper growth because we're purpose driven, really aligned. And I think that's actually just an insight that emerged is that, you know, you'll start to see that the higher levels of success and more power and momentum doesn't come from more grinding, it comes from more alignment. And so I was getting more aligned. Right. And so then we built that team, I think, till about like eight, nine, ten agents. And we're now two and a half years down the three years down the road. And some of these agents who, you know where they were doing five, six, seven transactions before they joined the team. Now they're doing 25, 30 transactions. They're all making more money than they've ever made before. And then some of my best people started to get the itch. And the itch is, hey, Lars, like, this has been awesome. And I've been doing this for two and a half years and we're crushing it together. But I kind of would like to build my own identity, my own brand, maybe make a higher split. And I remember a number of my agents kind of got together and they said, hey, can we have a conversation with you? And so it was being on the other side of that was when it happened. I thought it was one of the worst days of my business life, but it was probably one of the best days of my business life. I felt betrayed because I invested so much to create all this success for these other people. And now they had taken it all for granted. But I remember sharing the experience with Gary Keller and he was coaching me at the time and he said, you know, Bret, that your role as a leader is to consistently expand your world so that your best people can live out their greatest ambitions within it. And if you have really good people, it's going to push you and it's going to stretch you. So caused me to ask the question, right, how can I expand my world? And ironically, that was advice from Gary Keller, which ultimately caused me to leave Keller Williams. Because at the time when my best people wanted to expand their world, they'd leave my team and they'd go to the market center and I'd go from making 100,000 a year off that agent in my environment to now making 3 or $4,000 on profit share. So that forced me to look at and find another model which was like, how could I create a team environment with the support, the systems and the structure, but allow agents to build a business of their own? And that ultimately, what causes the land on this model that we've developed, I call it Team Rich. It's like a hybrid between a team and a brokerage. Higher splits than a traditional team, much more support than a traditional brokerage. And so that became the genesis of the platform we built, that is real estate experts.

And so is there anything. Are you now. So did these agents that had this Mutiny moment, because I have been there where they're like, hey, we have to talk. And there's like, you're like, oh, this is going to be bad. Is it? You know, were you once you sort of recovered from. Because we are triggered and we think, like, how could these, these are my children. And now they're like, they don't appreciate all I do for them. And it's like this awful moment. But did, did you. How, how did you, how did you, like, how did you actually do it? You know, did you. Was it like in three to six months? You have pivoted the whole thing? You just said, hey, guys, hold on. I'm, you know, like, what were the conversations like when you got out of the trigger moments?

Yeah, that's a great question. So, so I, I did end up. So I, I said, look, I'll take all that into consideration. You know, I was kind of holding back my, my, my initial reaction, right? And I said, look, okay, give me a day or two to, to, to, to think on this and I'll come back to you. And so I came back to them because I think they were asking for an additional 20%, you know, on, on the, on the margins, on their splits. And so I just, I went through the numbers with them. I said, you know, like the business, you don't see what I spend. You see that you get 50% or 40% and I get 60%, but you're not seeing that we spend 30%. So now you want to ask for an additional 20%. That's going to drive our profit margin way down, like near 10%. And a business at 10% profit margin is on life support. So as soon as we hit a market shift, guess what, guys, we're out of business. So, but let me ask you, I asked him the question. I said, have you made more money than you've ever made before this year? Yes. Have you? You? And we went all the way around there. Everybody said, yes. I said, well, let's not kill the golden goose, okay? So give, you know, give me some time. And then. So it took, it took about, I would say, my operations director and I up to between three and six months to really build the model, to figure out how we can get the economics right where it would still be a viable business, you know? And did some of the agents still want to stay on my team because they wanted more leads and more support? Whereas some of these agents who are getting a higher percentage of sphere of influence business could now move to this outer ring of the business where, you know, they get a higher split on their sphere, but they could still participate in some of the company generated leads. So it took us some time, but that was the narrative. You know, I really, I did sincerely come from the place that I wanted their success and I wanted to find a way. And, you know, I think pretty much everyone, Everyone, everyone stayed. And I had a handful of people who stayed on my team, and then I think the majority of them moved to this outer ring. But then I ended up recruiting and bringing in more people for my team.

So, yeah, and, and that was, that was another dip, you know, so you just had to wrap your cause. I remember when you and I had conversation, this really expanded my mindset around where I may. Where I probably most likely fell down as a team builder when I was building my team is just thinking that it could only be one way. You know, you building this side, I mean, at the time you were looking for me to help you validate it, and I was like, dude, I don't know. Like, I've only seen this thing work, but here you are, like, you went through. So that mean that's, that's all on you willing to go through another discomfort, a little bit more risk, like a leap of faith. So talk about that a little bit. What does that look like for you?

Yeah, so I remember that because as I came up with the concept of the model, I presented it to my best coaches and mentors, you included. I think I went to three or four people and they all said, dude, you're crazy. This is not going to work. Your net profits are going to be too low. It won't be sustainable. You don't have enough revenue for growth or whatever it was. But something in me, I believe that God wouldn't have given me that experience and that desire unless there was some capacity to fulfill it. And so I stayed clear on the vision. As we talked about this journey for entrepreneurs, when you want to go to that next stage of growth and you're going to make these investments, you do have to have a clear plan and a model that works. But there's a lot I couldn't see. I couldn't see that far into the future if it was going to. If it was really going to work. Where are we going to get agents to want to participate and pay all these additional fees on top of their commission because the splits were higher to them. But yeah. So it was again, having a purpose bigger than money and a belief that if I've got a sincere desire to add massive value to people, that somehow that money would show up on the scoreboard for us. And in fact it did, you know.

Yeah. So, so again it's, it's, it's coming back to that same purpose that pushed you through those three or four agents leaving and you're like, oh crap, this feels like I'm starting over. But you started. It's that same thread throughout. Like you want to just add more value to more people and you're trusting that the, the, the financial side will work out and not, not irresponsibly. You know, you're, you, you're a spreadsheet guy and you've modeled this thing out. I remember one time we touched base when you were, I don't know, a couple years in it, you're like, yep, still pushing through, like, you know, the uncomfortable part, like, yeah, you know, trying to make it sound like, you know, like, but it's what you knew, like you knew there was going to be a growth curve there where like there's a, not a break even point. But you talked about it in that regard, like I need to get to X number of agents in the team rich model for this to work. So that was really valuable for me to see you do it. I was not going to, you know, I was not brave enough to ever push myself to that level. But it was awesome to see you do it.

It. But, but I think, I mean I, I think coming back to that principle, you know, and Anthony, Anthony La Macchia is another brilliant team leader. He, he actually runs a similar model and he and I have very similar business life experience where he grew a very successful team and then had these agents say, hey, you know, like I want to hire split. And, and the reality is, you know, depending on how hard you squeeze the traditional team agent model or how generous or how tight you run it, you know, nobody wants to feel like they're under somebody's thumb, right? And especially if you get good, talented people, they're going to want to learn to grow and we need to provide a path to growth for them. And that was, and that was, you know, that was what I was about and that's what I believe was there. But I think, you know, the other thread is just that you got to find a purpose bigger than money and to drive you and that will take you your business to unseen heights. At least that's been becoming my personal experience.

Awesome. Let's. The last thing I want to comment on because I think it's behind any organization that's grown, there are multiple good operators that keep the owner in check. They sort of Keep the thing on the rail. So talk a little bit about the operations team and how you leveled up talent. What did that look like over the years?

Yeah, that journey was all growth requires some level of discomfort. And I would say at every doubling we typically kind of broke the systems or the processes we had built. Every doubling or every tripling. And then we, we hit that this last year when we were going from 470 million to 1.2 billion. You know, we got into the third quarter and all of a sudden all the wheels come off the bus and it was like oh crap. It was another oh crap moment. But you know, we, we everybody leaned into it and I think our staff, you know, again partly because they're bought into the purpose that, you know, our, our purpose is to create a better life through real estate for our agents, our staff, our clients and consumers. They were willing to work those 10, 12, 14 hour days to service what was there and then also, you know, rebuild the systems. But that didn't come with also out bringing in higher level talent. You know, I brought in an amazing operations director who had industry experience and she brought with her a director of marketing. And so as we had grown, I think there needs to be that consistent growth and leveling up of your internal staff. And it's either you've got talented people who have that desire and willingness and the GWC to level up or you have to find those people. And again, just clarity of vision helped us kind of, I would say almost passively attract the right people. Just getting super clear like who are we looking for?

Yeah, and it's funny you mentioned GWC which is a attraction. Gino Wickman and that book sort of taking our industry by storm and I think just not doing most of us justice because we just want to believe that our administration is our integrator and it's just complete crap show and people thinking that just because they're an admin, they're going to be the person that takes you from 500,000 GCI to 5 million GCI and almost never does that happen. And growth is limited sometimes because we're thinking a little bit too small, like a person or a position or not hiring to where we want to be, like you said. So. All right, so I want to respect our time here. What's one last thing? Let's talk to someone who's in a normal market. They're probably between 500,000 and a million GCI. They've got an administrator, they're starting to hire buyer agents, but they're doing it with no roadmap at all. What advice would you give somebody who has the capability to go from 500 to 5 million? What are a couple things you would say? Watch out for this and watch out for this?

Yeah, I mean, starting out like I. My personal journey to that, like I was a seeker, right. I was always wanting to learn and grow. So I was going to all kinds of conferences, whether it was Craig Proctor or Kendrice, and I'd come back, I'd take a yellow notepad, you know, when I was there, and I'd have pages of pages of notes and I would be like trying to implement everything and totally overwhelm my assistant every time I came back. Right. And it wasn't until we got introduced to the one page strategic plan that now I began to realize, oh, it's not just about doing the right things, but doing the right things in the right order at the right time. And I think that vision is helping somebody clarify their business. And get a plan on one page about who you're going to be in the market. What your objectives are and how you're going to get there is probably the single most important thing. And then second to that, to add what strategies or tactics will help you get there. Find a great mentor or model. Somebody who's got. Got great systems, real estate. B school, you know, has got amazing tools and resources that helped us along the way. So I think that's it. You know, get a clear plan and then. And then find someone that's going to guide you to help you figure out what the right tactics are to put into the business. And, you know, be purpose driven. Find a reason better than money. And there's no limits to where you can go.

Yeah, that part to me was my biggest takeaway as I'm looking for my next level. It's like, really, what is, you know, taking my own coaching around, like what, what is your core reason for being on this earth? It's not to whatever, right? It's not for me to grow my exp Org to a billion or to grow B school or for you to sell like a gazillion more homes and go to like 1 trillion a year. You know, that doesn't matter unless Brett is put in his sweet spot, which is loving on and lifting up and coaching others to a better version of themselves. So that's, that's super helpful. Thanks, my brother. I appreciate you and your time. I would say if you're struggling with any of this, like Brett said, I mean, we're one of a bunch of options out there. I put together a report called Real Estate Business Growth Navigator. You can go to realestatebusinessgrowth.com and we'll see you on the next episode of Real Estate Team Builder. See y'.

All.

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