Nathan Daniel: 0:02
Welcome back to the Broker-to-Broker real estate podcast. I'm your host, Nathan Daniel. And today, we are talking about a couple different things. One, we're going to be talking about massive growth that's happened in the last 12 months in this brokers business, and I'm excited to jump into that, but I'll also be talking about how to raise your level of leadership inside your organization, and what impact that makes. So I'm gonna cue up the music and we're gonna get started. Welcome to the Broker-to-Broker real estate podcast, where we have real, raw conversations with industry leaders, finding out how to connect, support, lead, and ultimately make an impact and drive results in the lives of your agents. I'm your host, Nathan Daniel, and welcome to the show. Well, everybody, please welcome to the show, Phil Duke, with 1st Class Real Estate. Phil, welcome to the show.

Phil Duke: 0:55
Thanks for having me. Oh man, I'm excited about this. And hopefully we can dive into some good content that can provide a lot of value to the folks that are listening to this today.

Nathan Daniel: 1:03
Yeah, I'm looking forward to it. I've seen you on a couple other podcasts and couple other shows. So one, thank you for coming on. I'm excited to have you on today. Coz you've done some pretty amazing stuff this year. We're going to jump into that. But before we do that, I want you to introduce yourself. Where are you from? I know 1st Class R al Estate, but tell us about y u.

Unknown: 1:24
Sure. Well, I live in Northport, Alabama, a lot of people don't know where that is. It's a little small town. But Tuscaloosa, Alabama is on the other side of the river. You've probably heard of the University of Alabama, especially if you're a college football fan. So we're just across the river from Tuscaloosa University of Alabama. My family moved here in '96. So from '96 on, I lived here. I got into real estate at

a very young age: 1:50
19-years old. Flunked out within two years, like most people do, and then join the military, went back to school, finished my degree, and after being in some sales jobs for a number of years, decided to hop back in 2015. And I went from being a part-time agent to a full-time agent, to growing in a team, to growing in a brokerage, to today, being out of production and having my brokerage here, and a couple other locations that we've started that are better in the beginning stages as well. So it's been a fun ride. I've got two little boys. One is five-years old, one is one-year old, spend a lot of time with them. We're very active in our church. I still go to the gym a couple times a week. I'm not as competitive as I used to be in that arena. And then, I'm also a reservist in the Army National Guard. So I still do one weekend a month with my military service. And I've been doing that for about 13 years now.

Nathan Daniel: 2:48
Well, that's awesome. Thank you for sharing that. And thank you for your service. I appreciate that. And the fact that you're still active and stuff. And I think you have a weekend coming up--actually this weekend. Is that right?

Phil Duke: 3:00
That's right. Yeah. This weekend? Yeah, I'll be Captain Duke for a couple days. This weekend.

Nathan Daniel: 3:08
There you go. Well, let's hop in because you've done some amazing things in your business. So I want to start talking about that. But where I want to go is: what are your thoughts today in the industry of real estate? What are your thoughts about our industry?

Phil Duke: 3:25
Yeah. I mean, you were talking about this a little before we click Go, but I believe that the traditional real estate brokerage model is broken. If you're listening to this, you probably are a broker or you're thinking about starting a brokerage. And the reason that you're doing that is because your brokerage, if you were an agent, was not able to meet all of your needs. So the agent experiences is really bad. The level of training--real world training that you actually need, for most brokers out there, is not very good. That's why the real estate coaching industry is as big as it is. And we, luckily, we have some of those folks that can kind of guide us along the way. But I think most of us would recognize and realize that the traditional real estate brokerage model is kind of broken. And it's up to us to fix it. And the agent experience is broken as well. We kind of just throw fate and throw agents out there, have a company meeting once or twice a month and kind of figure it out. The good ones figure it out. And the ones that need a little bit more hands-on, that need a little bit more coaching, they ended up just kind of flunking out of the business. And I've seen that over the last five years since I've been back in the business. The failure rate today is just as high as it was five years ago, even with the market where it is. And we can fix that. And if you're listening to this podcast, I would bet you're probably thinking that you can fix it and do a better job than where you were at previously. So I think we all realize that now. There's all kinds of different ways to fix it. And there's all kinds of different models to go after. But we can fix it and I think we have a duty to fix it.

Nathan Daniel: 5:02
I love that. I love that. I love your thought on that. And the whole reason for this show is exactly--that is to help figure out what it is. Because--I think last time I saw this statistic, it was 87% of agents that are in the first two years, fail. And that's unacceptable, right?

Phil Duke: 5:23
Yeah. In any other industry, it would be very unacceptable. But we've made it easy for people to get in. We try to tell people that it's going to be one way and it's not, and they end up, you know. I think one of the reasons why I have more success, my second go around, is because I finally figured out what are the struggles going to be, and instead of trying to figure out how to get around those struggles, let's just figure out how to push through it. Like, if lead generation is going to be one of the number one things we got to get good at? Well, let's figure out what works today, not what worked in the 70's and 80's and 90's. Not to say some of that stuff don't still work today. But we can be a lot smarter with it today. And I think we're in a generation now that wants to kind of go out and search on their own. And they want to feel like they found you. But there's all kinds of ways you can do it. And yeah, I think we definitely can fix it.

Nathan Daniel: 6:14
Well, let's talk about this a little bit. Because you recently--you've been experiencing some massive growth, right? So tell me how you're doing that. Like, I think you're over 300% growth last year?

Phil Duke: 6:31
Yeah. For me, it really just became...when I left the brokerage that I was at before, it wasn't that we had a bad relationship at all. In fact, we still have a good relationship today. But I was paying money for coaching, I was paying money for some technology stuff that was better than what that company could offer me. And I really just felt like, man, I'm paying all this money for these extras, and I'm still giving money to a broker. So if I just went out on my own, I could keep that extra money that I'm giving away in a cap. And I never really thought that it would turn into what it has today. But initially, the plan was just, "Let's go out and start a brokerage! Let's get four or five really good agents! It won't be a whole lot of extra work. We'll all kind of do a good job." And what I kind of started seeing as people would

come in: 7:15
we do a deal with an agent, they were struggling, they liked the way that we communicated with them. And a

couple months later: 7:22
"Hey, Phil. I'm looking to make a move. And we had a good experience when we did that deal with you and checking to see if you're looking to come in." So we got to 10 agents without really doing any outbound recruiting. But we started seeing that not every agent is able to put all the pieces together. And it became, this is getting to be more of just a little side thing. These agents really need my help. I told him, I was gonna train them when they come on board with me. And because I'm still out there doing listings, working with buyers, I just couldn't do that at a high level. So really, when it really started taking off for me about a year ago was when I decided to come out of production. I had already given all my buyer sides away at that point. That went so well. Those agents were really kind of starting to level up in their business as well. So I said, hey, why don't we give the listings out for these folks, too? So we went bowling one day and said whoever gets the highest score gets to pick which one of my listings they want first. We did a little draft. And I think it had 14 listings at that point, gave all those out to those agents. And I just went 100% towards developing the agents that I already had, and going out there and trying to find other agents to bring into our company, whether it was agents from an existing brokerage, or people who were thinking about getting in the real estate business who weren't even licensed yet. So to me, it's the same game. It's still generating leads, it's still having a presentation to talk., like, why do you want to come work here? Or staying where you're at? Or why would you want to get in the real estate business versus staying in your job that you hate right now. So you still have to have a presentation, you still got to have a CRM, you still got to do follow up. It's just, at a certain point in your career, most agents don't really do buyers after a certain point. And then if you keep leveling up even to that next level, it becomes to where listings aren't even the greatest efficient use of your time. So now, hiring an agent that could stay with you for two or three or five years, really becomes the best use of your time. And now today, I'm still doing that. But we're also finding other broker owners to start other locations because we thought out this model that we can duplicate in other areas too. So really, it was just like about being efficient with my time and really giving those agents what they signed on for.

Nathan Daniel: 9:38
Yeah. Well, I love that. I especially love the bowling contest. That's unique, right? I mean, your contest inside of real estate offices, but hey, you want some listings? Let's go bowling.

Phil Duke: 9:50
That's right. Yeah, we laugh about that today. Probably was not the smartest way to do it. But it worked and I knew that those agents were going to get those anyways. And we had to figure out some kind of way to divvy them up, and it was going to be kind of unfair, no matter how we did it. So we just said, hey, let's assume that you're all gonna get listings. It just depends which one you're gonna get.

Nathan Daniel: 10:10
Well, Ithink that's fun, though. I think that's a unique way of doing it, express you, right? Like be you and be real. It was you being you and like, hey, let's go bowling. And let's have some fun with this. I love that. So I know, through growth, there's a lot of challenges, and you're learning things along the way, right? And you mentioned pushing through earlier. How are you helping those agents right now that you're attracting into your company? How are you helping them push through that cycle?

Phil Duke: 10:38
So the biggest thing that I found, and if you can get good at this, then these agents start telling their friends and other people in your local marketplace start noticing. When you take an agent who was at another company and they weren't producing a whole lot, and you plug them into your stuff, and all of a sudden they're getting listings, they're getting pendings, it really changes the game for them. So whether they're a new agent who's brand new to the business, or if they're an existing agent who swapped over from another company to us, our goal is to have them under contract with a buyer or a seller client within 14 days of them joining on with us. Now, a lot of that's up to them, we can only control so much. But we found if we can get you a closing within 60 days of you hopping in, see how we do it, hold your hand through that first one or two or three transactions, it almost turns into autopilot like that. So a lot of people I think are thinking, man, if I have 40 agents, my phone's gonna be ringing off the hook. I'm gonna constantly be on the phone... What we found is the opposite. If you lead the right way, and you hold their hand through those first two or three transactions, and really remind them like, remember, we went over this in your training, this is why we do it, the way that we're doing it right now. Show them the right way to do it, they pretty much get it. So what I've seen in every leadership role that I've been in, if you show people what the scorecard is, and you show them what ride is supposed to look like, and you hold their hand, as they do it the first one or two or three times, that's not to say they're gonna be an expert after three closings, they're not, but they're gonna at least be able to function almost without you being there looking over their shoulder time after time after time. So that's where we have gotten really intentional. It's when you hop on with us, we are gonna put everything we've got into you, for those first couple months to help you get started. And then, we're going to keep doing that stuff, too. But we got other folks we're trying to bring up too. But we're going to try to get your kickstarted, to try to get you going, to show you why we're doing it the way we do it. And some of them end up taking off and doing it themselves. And some of them do those first two or three, and then they just kind of go right back to what they were doing before. We can't help that. All we can do as leaders is kind of set the condition for what that's supposed to look like and hope that they see the value in that. And the more of them that we hire, the more of them--that's starting to happen for. So that's probably the big thing for me is, I feel like you need to say like, there's...new agents have questions, they're worried about stuff, they have these limiting beliefs, they start losing hope. And if you let them go three months, four months, six months, without a closing with you, they've at that point lost all hope, number one, in themselves. Number two, that they pick the right industry to be in, and number three, that they pick the wrong company to be at. So we can greatly stack those odds if we can help them get a closing within 60 days.

Nathan Daniel: 13:37
Okay, so I love that because now you're taking a hands-on approach. So I'm curious about the expectations that you're setting in that initial hiring process. Are you setting expectations at a really high level? Or what's that look like? And then second part of my question is, how are you holding them accountable to those expectations?

Phil Duke: 14:00
Yeah, so for us, when we have to tailor make every business plan, depending on what their goals are, and we have some of them that...they've left a full-time job and real estate's their main thing and they need to get going really, really quickly. We have other folks that they're getting into this part-time and they're looking to transition out of that full-time job and get into real estate at a full time level and they might have to go a little bit slower. So I do think it has to be kind of attainable, but basically the way that we have it right now is that we have an online training system that I've created. A lot of people are using Trainual or some of those like that. We just use the free Facebook group. You can set up a Facebook group as a social learning group, set it up in units, and ours is eight units. And it goes over things from how to set up their calendar, how to set up their bookmarks on their computer. All the way down to doing contracts and negotiating lead generation. Again, it's not all inclusive. It's just enough to kind of get them started, give them some basics. I've also found just from experience, too, you throw too much at them and expect too much right off the get go, they end up just getting crushed by it. So we want to give them some confidence. And so, really for them, they go through that training kind of on their own. We check in with them periodically. But at the end of that training, before we start turning on the the lead sources, the lead routing to them, they have to come in and do a skills test and show that they know how to do the things that we asked them to do. Simple stuff like making sure they can open up the MLS, making sure they know how to set up a showing use and showing time, making sure they know how to use an electronic lockbox. And then it gets a little bit more advanced. They do have to go in there and write up a contract, get it signed electronically. You'd be surprised how many people we hired who didn't grow up around computers. They don't even know how to attach a PDF to an email. So we have that little stuff in there like that. So our goal is to just break it down, make it as simple as we can, give them some action steps. And then we give them a list of six things we think they should be doing every single day. And then every Thursday night, we have a little accountability meeting that we do on a video chat. And for those that can't make it live, we do record it. And they have some homework that's due every Monday morning. 10- or 15-minute little homework thing. This past week, we did a time study, where they look at how many hours you have in a week, how many you're willing to work, how many you're going to sleep, how many you're going to do for your hobbies, and then how many hours a week do you have leftover, to kind of show them. And most of them was 20, 30, 40 hours that they have left over even when they're doing real estate and another job. So really, for us, it's really like going through the training as fast as they want to. They don't have to wait on us, we don't have to wait on them. They can start. We had one today that passed her real estate exam, came out here and signed her license, we've got her plugged into the training right now. She can go ahead and get started going through the videos, doing the little quizzes, doing the activities, while we're waiting on her license to come back. And if she does, then that shows me that she's pretty motivated. And I probably want to train her different than somebody who, we added them to the training site, and they didn't touch it for seven days. So we do have to cater it a little bit, but we have a system to follow. And if you follow this system, we can pretty much guarantee you that you're going to get these results. And then we just do those accountability meetings. If we don't see you on there for a week or two, we do reach out. But we can't force you to show up to that stuff. But we have a system. We feel like if you follow this system, it'll at least be enough to get you started. It might not be enough to sustain you forever. But we feel like if you do this for the first 30, 60, 90 days, you'll be set up for success. So

Nathan Daniel: 17:50
I love that. I think that's great, using the power of technology. I mean, everybody's on Facebook anyways, right? So using the power of Facebook with the group and developing those skills there, which I love that, breaking it down into units. I think that's fantastic. And then I like how you cater it to each person, right? Move at the speed that they want to go, right, because there's only so much we can do as leaders for them, right?

Phil Duke: 18:15
Yeah, I mean, all we can do is kind of set the conditions and have a good system and plug and play them into that system. And it really does come down a lot to them, on what they're going to do or what they're not going to do. They're the ones that hit it hard, that knock out their training quickly. They typically do better than the ones that take 30 days to knock out those eight units. That's not to say that the people that took 30 days are bad people or bad agents. But we're gonna train and mentor and coach those ones that seem motivated a little bit harder, and a little bit more time with them, than we are with the ones that are just kind of kicking the tires a little bit. So I think as a leader too, you got to figure out who's you're A team, who's your B team, who's your C team, and you have to kind of coach and mentor those folks accordingly. Everybody here is probably--had that experience where you don't see an agent for a month. And then all of a sudden, they knock on your door. Hey, Phil, I don't have any closing setup right now. Can you get any leads for me? Well, gosh, I hadn't seen you for a month. I just figured you were doing okay. So we got to figure out how to coach different groups that way, and that A group, B Group, C group, is a good way to do it, too.

Nathan Daniel: 19:24
Okay. So if someone's wanting to have success, and I love all of this. I think it's very systematic. It's like taking somebody by the hand through this process of getting started, right? If somebody is wanting to have that level of success that you're experiencing right now, how do we need to grow as a leader to do that?

Phil Duke: 19:46
Well, I think, number one, you got to have your mindset right. It took me 10--it took me 18 months to get to 10 agents. It only took me nine months to get from 10 agents to 40 agents. So a lot of that was made--was in my mindset of like, hey, if I add more people, this is just gonna be a ton of work. A ton of people gonna be calling me. I won't be able to have family time at night because my agents gonna be bugging me. So part of that is just learning the right way to do this thing like, what, how do you effectively lead this? How do you set up this system? And then number two, I think having a coach or mentor who's already done what it is that you're wanting to do. I mean, when I got back in the business in 2015, I immediately hopped in to a group coaching course, that I'm still part of today. I still interact with those agents in there. I've had coaches that help me specifically with prospecting. I've had coaches that I've hired for social media. I've had coaches that I've hired to help me with recruiting agents. So there are people out there who have already mastered segments of this business. And instead of you just trying to figure it out and piece it together over time, you'd be a lot smarter to go out there and just find who those experts are. And even if it costs you some money, it's gonna save you a bunch of money in the long run, cuz you're gonna be able to do it faster. You're not gonna have to do that trial and error kind of period. So I think that's been one of the big keys as well. The first 18 months that I had my brokerage, I was still in my group coaching program that was more for agents who were producing. I didn't really have a mentor who was helping me with the brokerage side and actually building the business. And I was looking for something like that. I had a hard time finding a model, that seemed like it would be a good fit for me and for the agents who worked for me. I didn't want to be one of those brokers where people come in, and as soon as they feel like they don't need you anymore, they leave. We don't want to have a revolving door. We want to keep them forever if we can. And so we had to find a model that kind of accommodate that. So I would just say, that's probably the fastest way, whether you're an agent who's wanting to become a successful producer, if you're a broker who wants to take it to the next level, if you're wanting to recruit at a higher level, find somebody that's already done it, and just learn from them. Rip off and duplicate, R&D, what they've done. You don't have to reinvent the wheel.

Nathan Daniel: 22:09
I agree with that 100%. You got to find a coach, right? I mean, a coach can actually make you a lot of money. It might seem like a painful investment upfront. But when you plug into what they've done and R&D, like you said, they can really take you to the next level. So let's talk about this. What's the next level of success look like for you? I know you said now you're looking beyond just a brokerage. Now you're looking at brokerages. What's that look like for you?

Phil Duke: 22:37
Yeah. So the next level for me--because I kind of took this model and ran with it. My company offered me an opportunity to become an area representative with them, which just means I had a chance to purchase some franchise territories. And they're not like geographic territories. We can really go anywhere. So, as I have just masterminding with people, network with people, I have been trying to find people who want to take their business to the next level. And instead of me having to go move to their town, and help them develop a business for a year, and then move back here, what I found is that through coaching and mentoring, we can run the same playbook here. So the same way we recruit agents, the same way we train agents, we can really just rinse and repeat this thing over and over and over. And I can be a partner with them on that, or they can be 100% owner. Either way, as an area representative, I do have four locations right now. One is in Alabama and the other three are in other states. And I do coaching calls with those franchise owners every week, and we're trying to help them grow, and provide them tools to help them get through some of the hurdles that we have gone through and trying to be just a couple steps ahead of them. Not to say that we've got it figured out, or that we were smarter than them. But we're a little bit further along in the game than what they are. And instead of them having to learn the hard way, we can kind of provide them some tools, some checklists, some processes, some training to kind of help them get to the next level. So I think, ultimately, success for me looks like having my one local location here, to the point that it's running and growing without me. Right now, it's running without me. I mean, they can pretty much run it without me. But I'm still involved in the recruiting, and we've hired a branch operation manager to come in on March 1st, who's going to hopefully take it and run with it. So then I can spend more time developing these other territory. So, I think, ultimately, to have a business that can run and grow without me, without dependent on me, I guess. I mean, I think it probably does a little bit better when I'm here. But ultimately, if it can continue growing and running without me, then I think that would be considered a success. And then we'll have to figure out at that time, what we're going to do with all that extra time because I don't think like sitting on a beach is the destination for me. I don't think kicking my feet up and let money come in. We're gonna just keep going to the next thing. We're in the process of opening up a title company here. We partnered with a title company that's approved in all 50 states. So once these other locations get to the point that they're growing up and in production, we can go partner and open up a new title company, each one of those, and we're using that title company to sell shares of that to our top agents here as a recruiting and retention tool. So hey, come over with me, join my brokerage, we'll give you 100 shares of the title company, you'll get a check every month depending on how well it does. And if you leave us, well, then you get your initial buy-in money back. So those are things that--we've done the same thing with a mortgage company. Right now that mortgage company is not opening in Alabama. But it is approved in other states. We're working on Alabama, and Alabama rules are kind of really outdated. So we couldn't do the mortgage company partnership here. But we can do title companies. And we could do a title company in all 50 states. And all that comes from having agents and having production. The faster...you can just...like when you take a listing, you want to get that listing on the MLS as fast as possible, and get buyers walking through it. When you hire an agent, you don't want to buy that 60, 90 day training program. They're gonna lose interest by then. They lose some momentum. You don't get them through that training program. Get them out there, working buyer and seller leads. They learn way more anyways, when you're actually out there doing stuff in real world and you just hold their hand through it for those first two or three deals. That's kind of the secret to our formula, I guess you'd say.

Nathan Daniel: 26:40
Secret sauce. The secret sauce. Like it. Well, and I was gonna ask you the question, what's it going to take you to do that? And I heard you say, you're answering my question, like, what's it going to take for you to do that, and you've got somebody coming in. So I love that. So now you can go off and get to that next level, break that ceiling. I mean, if you were--if you're watching this, like on the video, you saw, my mind just blew when you started talking about title. So if you're open to this, like, that's actually a series I'm putting together right now, which is called, which is ancillary businesses, which is gonna be coming soon. I'd love to pick your brain, maybe have you back on the show to dive a little deeper into that? Because that is a huge retention piece like that's...yeah.

Phil Duke: 27:24
Yeah, I mean, you could bring somebody in, even on 100% Commission plan and offer them 100 shares of your title company. And now they're a partner with you on the title company. And you get the ripple effect of them leaving whatever brokers they read, and now coming on with you, and you're not even making much money as the broker. But your title company now is more profitable, because you recruited that agent in. So yeah, it's like a no brainer. You can win all kinds of different ways. And I think that's what you've got to set up. You got to set up a system to where you can win with a brand new agent that does one deal, or you can do it with the agent that's gonna sell 100 deals, or you can recruit the team that's going to do 300 deals. So really, it needs to be a win for everybody. So when you have little stuff like that, it's just one more little tool that you got. So yeah, definitely would love to...we don't have it fully opened yet. We've filed everything with the state, we've actually done a few closings with it just as a kind of test run. So maybe in another two or three months, maybe we'll have some actual numbers to look at as far as how profitable that can actually be. So yeah, give me a couple months to get it to where it's running by itself.

Nathan Daniel: 28:34
I'll let you work out the kinks and stuff. And then we got to come back on. There you go. Well, Phil, thank you so much for coming on today and telling us your story and about the growth that you've experienced and how you grew as a leader all along the way. So we've been talking to Phil Duke, Jr. with 1st Class Real Estate. Phil, thanks for being on the show.

Phil Duke: 28:50
Absolutely, man. And I look forward to hopping back on here and talking with some title business, hopefully once we get that thing to where it's running pretty good.

Nathan Daniel: 28:58
I agree. It's gonna be an awesome conversation. I'm looking forward to it. Thank you for tuning in to this episode of the Broker-to-Broker real estate podcast. If you like what you heard, make sure you subscribe to the channel. For more information, tools and resources, go to www dot broker to broker podcast dot com, and always remember, be you and be real. We'll see on the next episode.