Real estate investing does not require a real estate license and Connor Steinbrook had no intention of getting one.
That’s until someone showed him the incredible opportunity to build wealth and passive income with eXp Realty.
Connor quickly got his real estate license and within a few short years built a real estate team over 1,3000 agents spanning more than 35 states and 4 countries.
Transcript:
Chris Bounds 00:00
Connor, you’re on mute.
Connor Steinbrook 00:02
There you go.
Chris Bounds 00:03
What’s going on?
Connor Steinbrook 00:03
The best! How are you doing?
Chris Bounds 00:07
It’s been a long hour and a half. We hang out a couple days ago and I’ll see you again here next week, along with Matt and a lot of other folks. -What is your business look like today? Your real estate business?
Connor Steinbrook 00:26
For the real state business or just all the businesses?
Chris Bounds 00:30
I mean, for people who they don’t know Connor, they don’t understand, they have no idea who you are. Your real estate business just in general, what does it look like?
Connor Steinbrook 00:40
Mostly, it’s all eXp now. You know, quick rundown you guys in real estate. I jumped into the investing side of business, past 78 years ago now and I failed miserably when 100 grand ran out of money. I had time was going on YouTube trying to figure out how to build websites doing search engine optimization. I was on the first few people on investor carrot platform. And so, I got a lot of time with Adrian as and Trevor Mock early on and Adrian was teaching me about the power of video.
I started building private YouTube channels and linking those to my websites. And I built the number one house buying websites for a lot of the major keywords, here and most of the major cities in North Texas. I built the wholesaling company. I transition to the fix and flips. Not as many as Chris has probably done but I did quite a few house flips. I bought a number of rental properties.
I transitioned to owner financing. I did a lot in the single family residential space. I own land mobile homes on land and then along the way, I built my youtube channel investor army which is now Texas’s number one residential real estate investing channel top 15 in North America. I built some consulting companies around this digital products. And then, I had a lot of people blow me up that eXp obviously, and for about two years, I blew everybody off.
I was getting videos sent to me. I wasn’t watching them. I was trying to tell me how big an opportunity was. And my mentality was like, “Look, I’m sure people are doing great over there is probably a great opportunity, people are gonna do well”. But I’m busy. And my biggest headache is opportunity cost which opportunities I take now. I blew it off for a long time guys, it was a big mistake. It was a multiple seven figure mistake, prior now looking back in hindsight things.
But finally, I went to speak at a big event in Jackson, Mississippi and the number one guy in our company was speaking at the same event. I stayed in the little speaker’s house with him for three days. I was completely blown away when he showed me that he was making six figures a month residual income. I said, “I want to do that, too.” I set out to go and do this. I wouldn’t got my real estate license, joined the eXp a little. I guess it was December, 2nd to the last week of December 2017.
We’re coming up on three and a half years, guys. I’ve been able to grow this organization, I currently through about 1250 active agents across 42 states, seven Canadian provinces and I think we’re in seven countries now. We’re selling hundreds of houses a month. My rushers are cooked right around $50,000 a month right now if you guys want to know what was capable of being done here in a short time. I have been recognized by the company as one of the top 100 influencers in the company. About the tip into the top 50 here and any day now. It’s been incredible right here and most of my time is now instead of on the investing side, generating leads like I used to discounted properties, trying to buy houses that discount stabilized and forced equity up, what I’m doing now is just I’ve been able to build these other businesses up where I’m just placing my money in strategic properties, I’m looking for that.
I’m not so much on the active investing side, but I’m still investing. Buying houses here and there, I’m not trying to buy and volume like I was. At one point, we’re doing 812 houses at a time. Now I’m doing maybe one or two at a time. But all my time is going into the rev share model and residual income model. We’ve got our business stuff growing by about 11025 agents a month right now, like take that 200 plus a month. It’s been incredible guys. I’ve never been able to build residual income as fast, with this lease with the lowest amount of risk that the eXp is giving us here. It’s not a capital intensive business model. I can’t go bankrupt but I can build financial freedom. That’s the big difference as compared to doing it to the Trish Russel. We usually do it.
Chris Bounds 03:54
That’s what I tell folks that our real estate investors even agents they should invest in real estate. But at the end of the day, there’s risk involved, there’s time involved, rental properties, it’s passive income, but it’s not passive. It’s not passive at all. Even if you have a property manager, you still gotta manage them, and issues come up that you’ll have to deal with, or pay money for someone else to deal with.
And it’s a wealth building claim. But at the end of the day, revenue share is passive, once that’s set up, it’s ongoing. I don’t have to do anything. But if we stick with a rental portfolio analysis like I don’t know if you have any numbers that you can share, but how long are- I had no idea what I know Brent Phillips talks about how it took him a lot of sweat and pain, frustration to build $10,000 a month in passive income. So Brandt has talked about that.
I don’t know if you have anything to compare because when Look at the time and energy and then debt to achieve that, and compare it to what has been done with eXp and what is being done, which you’ve done what Brandt’s done what I’m doing now. It’s just so much easier.
Connor Steinbrook 05:17
Yes. In about 12 to 14 months, I surpassed what my rental portfolio. Residual income was through rev share and it didn’t take a debt risk, right? The thing about rental properties is, what the most people do, they’re doing a traditional fixed and finance out. Some people call that the first strategy, right? They’re marketing on the front side. And cost of marketing has gone way up. As you guys know, deals are getting tougher to get, especially in this markets insane right now. A lot of people are spending some nearly five to $10,000 even I’m hearing per transaction that they’re getting.
That’s the first step of the business, you need capital to grow the business, with or do with rev share, as long as your goals are big enough, you don’t need a lot of money. But the unique thing is Chris, to build this organization of almost 1300 agents, I’ve run my numbers, I spent less than $30,000 in business expenses, over three and a half years to build this. So more time at these numbers either pretty much net numbers, we have an $85 month year of cellphones, some traveling expenses, and some dinner expenses, but there’s really no expense into it.
On the vertical side, you have the acquisition side, capital intensive, you needed to spend money, you’re taking a risk, you don’t know what the deals are coming, when they’re coming how good a deal they’re coming, or going to be when they come in. Then, you have the second step. You have the acquisition process which takes money, not just your marketing money, but real money to buy the property. Usually, our money lenders, private money, lenders, IRA investors, things like this. You’re gonna usually get into the deal with an interest on reloan and that’s gonna start the process.
Now you’re gonna have to fix the house up, you’re gonna deal with the contractors now, this potential extortion, than walking off the property ripping you off. And usually it can take a month to three months to do renovation. And then a lot of times when you’re going to go back to refinance out, you got that six month ceasing your requirement. Then you go did cash out refinance and amortizing loan and then you have the management side on the back end.
Now, you got tenants’ toys, termites, and repairs. We all know what it’s like to renovate a house. You have to put a tenant in there right after you renovated it. They’re all moved in. And the first thing they say is, “Hey, I guess my plumbing is not working or something, could you just did-huge renovations, so it can be crazy.
You’ve got capital risk throughout of it, stress risks throughout of it, and then the timeframe to do this is once you stabilize that property, hopefully have the equity position in place, you got a good 20% plus equity position. You got instant equity when you’re done but the cash flow on a rental property is usually 200 to $400. For most people when they’re finally getting kind of stabilized out.
Chris Bounds 07:39
And in this market, it’s less than that. It’s just part of the evolution of rising prices.
Connor Steinbrook 07:47
Yes, but think about that guys, if you look at, let’s just look at compensation numbers, we’re not comparing a human to a house, we’re looking at compensation for residual sides. A capping agent that our business while here at eXp is equivalent to $2800 in residual income for the annual year. If you divide that by 12, I think it’s like $233 a month. It’s pretty much, if you sponsor a capping agent, the cashflow is equivalent to essentially buying a rental property. But how much money does it take to sponsor an agent, as compared to control an asset?
Nothing can compares to it, right? You’re avoiding the slow growth, you’re not having that ceasing requirement, you’re not having to buy a house, fix it up, renovate it, stabilize it, put a tenant in it and manage it. You’re just bringing an agent in day one. Now, a capping agents can still stay in this house because there’s a business owner. Now, what happens when an agent goes out there and wants to build their business? It’s equivalent to the house getting growing legs and walking down the street buying other houses for you.
When I sponsor brands whose Chris’s sponsor first, now sponsored well over 50 people, I think if the company has one part of this actual numbers, maybe even more than that, that’s like a house going and buying 60 other houses 50 of the houses for you. Right? It’s like a household buy house for you but also we’re leveraging this for an investing business, because this house I’m sitting in, I actually bought from another agent on my team, her husband found this deal and I actually had this house funded partially by Chris’s sponsor brand, who lived on this deal.
There’s a lot of synergistic nature on how our businesses overlap but the acceleration of cash flows, there’s never been a way to do it faster than the revenue share model that I know of, with at least carrying that low risk as well.
Chris Bounds 09:25
You have more agents on your team, then, well, I’ll back up because that’s a true statement. Coby, who was on earlier, he started at 18, got licensed, which is just crazy. 20 years old now, and he even said, as a 20 year old kid, he was still in college has more agents on his team than most independent brokerages.
Connor Steinbrook 09:51
Right.
Chris Bounds 09:53
You have more people coming on your team per month. Not in total, that’s definitely true. But per month, just new agents joining your team, the most independent brokerages will ever have, how possible?
Connor Steinbrook 10:12
Leverage. Duplication. As you guys know, as most entrepreneurs know, the most powerful business model in business today is obviously the network marketing model which is contrary to what most people believe. Which shocks me but every serious entrepreneur understands leverage and dedication. Keller Williams clearly understood this. They introduced this on a level that they did with their seven level profit sharing system and it built the biggest company in North America.
If you don’t know about Keller Williams best move, that a seven level multi level profit sharing system that allows agents to attract agents and override profit sharing. What I found was top 50 at Keller Williams and when he built the eXp, he dropped overhead substantially by going cloud based. Now by not having overhead expenses of brick and mortar, and all the different buildings and all these different management expenses, he was able to model that model enhance that model.
And what we’re doing over here is called revenue sharing pay seven tiers deep. This allows me to attract new agents to the company, grow an organization like I would normally as an independent broker would. But when that agent wants to attract agents and do the same thing to build residual income, I’m going to override their compensation page 74 D. If I sponsor Brandt brand Phillips’s personal sponsor to me, he sponsored Chris Bounds, Chris Bounds falls on my second tier.
And then if Chris Bounds sponsors agents, they fall on my third tier. You have all these different agents working together in a shared compensation plan, which creates leverage. I started the snowball. I started tracking few agents guys. I tracked with 30 to 40 agents of the company. I started sharing what I was doing, how I did this, what I say to agents, “Hi”, find the agents, they started doing the same thing.
Those agents started sponsoring agents, they start inviting their friends and family and agents that they knew through social media all across the country. And before we knew it, with a small base of agents that I started with, it grew into a massive organization. I’ve only sponsored a little bit under 70 people to this company since I’ve been here. But now we’re growing over a 100 to 125 agents a month. I personally with my personal success went out there and sponsored 70 or so agents. But those 70 or so agents wanted the same opportunity that I had, and they started using the business model that we have here by tracking agents to to build residual income.
And that duplication is picked up to where I am at right now. On a monthly basis we’re adding well over 100 agents which is insane to think about. And this is doable for everybody. So guys, don’t think this is not something that you cannot do. I had a first year agent here that didn’t have a real estate background at all. I at least came from the investing industry. So I’ve been in the house buying business and been in the business for a while. He came from a completely different industry, no skills sets, come in and literally one year, he’s financially free.
This is happening all across the country guys, its a huge opportunity. That’s how this would happen. The eXp for Bella cloud based system is an outsourcing management system for us. There’s almost 900 paid around 900 paid employees in cloud. But I’m not making payroll for. I pay $85 a month. For $85 a month I leverage 900 paid employees that manage and run my organization.
I’ve legal brokers in every state accounting departments, tech departments, and if I was to pay these employees on payroll, if I was the business owner wearing every hat, including the risk, this would be a multi decade million dollar, you know payroll that I’d have to make each year. I didn’t want to pay tens of millions dollars, Chris, I just end up to $85 instead. It’s working out pretty good.
Chris Bounds 10:52
Not so bad. Why are the agents coming?
Connor Steinbrook 13:30
Wealth. you can’t create wealth in one brokerage. You ask an agent and investors understand. This what investors. Do they work for equity? They work for residual income? When you ask an agent, did you get into real estate to create an income? Or did you get into real estate to create wealth? They’re like, “Well, of course I wanted to create wealth”. Then you ask them well, “How could you ever create wealth if you’re doing what only an income producer can do?” Sales is an income model that is you’re trading your time for checks. It’s a great way to create a huge income much better than a job but it’s not a wealth creation tool.
Once you make that money, pay your taxes, create disposal income. After that, after your living expenses and you invest that usually is the way that most real estate agents would create their wealth. They go out there, create a high income through sales, pay their taxes, pay the living expenses, take that remainder disposable income, start buying rentals, that’s creating their equity and that’s creating their residual income side. When you look at what creates wealth guys, there’s four things that if you study every deca millionaire up, they all have this.
The first one is multiple streams of income, MSI. If you have one income stream guys, and it goes away, you have no way of creating an income even if it is a great income, right? Same thing with marketing if you have one way of bringing in leads and that one way of leads, scope dries up, like people are buying from auctions a long time ago, there goes your business. You need multiple streams of income and multiple streams of marketing, which is stream marketing is an income stream if you think about it that way. That’s the first thing you have to have in my side.
Most brokerages have one way of creating an income, it’s selling a house, and that’s it. You sell a house and if you don’t have a transaction going your income stucks. Or if you can’t trade your time for that income, meaning a life liability, picks up children, grandchildren or health issues, any type of life liability where you can’t do this, taking care of older parents, there goes your income for the year. And also can you imagine the stress that you’re under.
Second thing that creates wealth is equity models. You have to have equity. You cannot just trade time for income. Think about how people create equity, real estate ownership, not sales, stock awards, like we have here, eXp or buying stock, venture capitalism owning parts of the business, right? When you placed yourself into an equity position, it takes a little time on the front end but once the equity positions in place, let’s say a stock goes up, did you put time into it to make that stock go up? No. But your increased in equity, increased your wealth.
You guys own rental properties, watch the market go up. Now it took some time to get that property stabilize. But to make the market go up, you’re not putting any extra time in that you’re out there sourcing other deals, working with other agents, working with or trying to find other deals. Equity grows without you putting time into growth. That’s why it can create massive wealth quickly for you. Now, third thing is time and money and residual income.
There’s only one thing they’ll ever give you the life that you want, guys. And if you want the life that you want, you need both time and money, and time and money comes from only residual income. So, residual income is going to give you that freedom. A lot of people are money free. They don’t have time freedom. You see doctors, dentists, hide that individuals all the time, but they’re tied to their business 100 hours a week, and they can never get to where they can enjoy the money. The last thing is duplication and leverage.
Talking about 900 paid employees that is duplication and leverage, 1250 agents. So, right now while I’m talking guys, I have agents all around the country, doing what we’re doing right now trying to build a business. So I can trade my time here because of leverage. My business is growing around me if that makes sense. So those four things create wealth, MSI for protection, self insurance, diversification, equity models for acceleration of wealth, without your time and impacting it, residual income to free up your time, so you can build your income pass what you’re already building where you don’t cap your threshold of how much you can make.
And then leveraging yourself outside yourself. Now ask yourself, at most all brokerage models, how many of those components for wealth creation do they have? The answer is none. And that’s why they don’t create wealth. So when they see eXp, they say, “Oh my gosh”. Especially agents that have an investing background, like a lot of us. When I sat down and saw this and finally got outside of my ego and really let someone show me confirmation, I said if you look at it, a business from a high level view, looking down at an investor agents, right, so we’re on invested agents right now what is their business usually look like?
Wealth creation on the right side, on the investing side, they’ve active income through flips, maybe wholesale deals, they have residual income through rentals, notes and passive money lending and they have equity models from real estate ownership, right? Equity going up as the market goes up, principal pay down going down, tenants pay down property. And then on the sales side, they have an active income component only. They can sell house.
They’re missing the equity component and residual component on the agent side. So, eXp is done is added the stock awards for the equity component and the revenue share model for the residual component. I said this is incredible. This company literally solved the problem for every real estate entrepreneur, and create the first opportunity for us to have every single income stream, the way of creating income on both sides of business.
And I said, this is gonna change the industry. And it has here three and a half years later, and we’re now the most successful fast growing brokerage ever real estate history. But that’s why they’re coming. They’re coming here to create wealth in the cells, not for their broker, not for their franchise owner. They’re trying to do this for their family. And that’s the difference we work for ourselves. Even though we’re inside of the eXp, the wealth creation opportunity is for us, agents. That’s where Asian owned Asia grown.
Chris Bounds 18:40
Yes, because for the first time ever, eXp gives the agent the ability to build their own exit strategy, whatever that means for them, they’ll define it, but they now have that option, it’s still an option, you don’t have to do it. I mean, the stock you get anyway, because you just you get it for production. But the revenue sharing, it’s optional, like if you don’t care about that, don’t recruit anyone. But for the smart agents that really understand the power of passive income and time, what that can look at over time and how it can grow.
Like they are focusing and really if you just had one caffeine agent, you get one caffeination a year for five years, like you’re looking at a substantial passive income that maybe you’re not gonna be able to retire off, but it’s a big supplement to your income that can provide some extra options whether it’s college funds or helping you get a nicer house or taking care of some. If you got to take off for a period of time like that’s huge.
Or if you want to be a little bit more aggressive about it. Going out there and recruiting 70 like you have Connor and then building 1300 agent plus team over three, four years. All of that is possible. And then people have done more than that people have done less than that. But you were you’re in control. So, Connor, you have me you’re one of the top 50 agents or so within eXp. I don’t know, what is that top. 5% or something. True leader, you go over the entire business model on Wednesday, Monday and Wednesday evenings,
Connor Steinbrook 20:29
Correct.
Chris Bounds 20:30
6:00 pm Central Standard Time, from A to Z, breaking down the entire model, the revenue share, the equity, the commission, all the tools like you take folks in a little but- on a private tour of eXp world; Showing them the training rooms, the broker rooms, like a just a little crash course into Cavey Core, talking about some of our preferred partners like express offers and our healthcare plan. If folks want to see that live for themselves, they can go to the website below and it’s been displayed this whole time invested agents.com/team. And what you can do is actually select a private call.
So, “Hey, if you want to talk to me, that’s fine”. Or if you want to chime in on on Connors live presentation, you can see the whole nuts and bolts like everything, live upfront, and actually have the opportunity to ask questions at the end. How have those for someone, who may be looking at- like joining one of those live calls, what should they expect? We got like four minutes, so maybe you have like 60 seconds to answer to that.
Connor Steinbrook 21:46
This is the key to our success guide. It’s not just that you’re going to get the information is that you get to use these tools when you come in. A lot of people want to know why we’re, you know, accelerating and passionate people like they’re sitting still in the top 100 influencers list is the live call system guys. It’s the ability for you guys to partner with us in the tools that we’ve created for you guys to help you grow your business, that you’re not stuck sending a video.
I said at the beginning, Chris, the reason why David joined for two years is because each pages were sending me videos, I wasn’t watching the videos, or I’ve watched them partially and I turned it off. I never saw the value in it. Because to me, it said, someone sent me a video, watch this on my time expense and then tell me when you want to come, make me money. The difference in what we’re doing here, why we’re growing so quick compared to what most people are doing is we’re doing everything through live conversations so we can look at people as a real human being as a real goal set for them and their family.
Not everybody’s the same person summer season, the business been 20 years. Our brokers from our team leaders, some are brand new agents, and everybody’s got different goals. Everybody’s in different position in life. And the ability to do a live presentation, numerous times a week for our agents to send to like this has been the big game or game changer for us, and why we’re growing so quick. And this is why our agents grow quick as well as they get to leverage this tool that other people in our company cannot because it takes a lot of effort and energy to do this.
But this is an option or an opportunity for our agents to use these calls to build their business. And it’s what I’ve used to build my business all around the world. So it’s allowed us to expand into all these different states and countries. So, guys, if you come tonight, you’re going to get a seat, or tonight or any any Monday or Wednesday. The information explained the way that I saw it.
That Changed my level of interest because I wasn’t interested in the eXp when I had certain people tried to explain it to me because they didn’t do a really good job just to be honest. When I saw them all explained from a true entrepreneur that knew how to leverage it, in a different perspective, it clicked immediately and I moved my license over here. I went to get a license and moved over here immediately.
And you can see the result of it. The information that you get who gives it to you, can be the difference in your life changing. Make sure to come tonight guys or come to one of our presentations even if you’ve seen these these business small I’ve seen it 20 times. I joined the company changed my life. Now, did you see it the way I saw it? You’ll have to find out if you come tonight. I’ll show you a different way of looking at the bizmole but this is why people are joining us.
Chris Bounds 23:53
Absolutely. We’ll look forward to it. So, Connor I’ll see you next week in Dallas at the event that we’re having with other eXp top leaders and Tony Robbins. Yes, pretty crazy. It’s gonna be a lot of fun. I look forward to seeing you there you’ve been a phenomenal leader to our team and I look forward to the months and years of just exciting times ahead.
Connor Steinbrook 24:16
I’m just waiting for you guys are well on your way to 1000 agents yourself and it’s gonna be a great journey and I’m looking forward to seeing you hit that goal. And then, in order for Chris to get there, allow you guys need to come in and work with us. And then for you guys to get there we need to help you guys bring your agents in as well. So, come on over tonight guys and see what we’re doing. I love to see you there guys and they’re not. Do you have anything else for me Chris or…
Chris Bounds 24:36
That’s it. Thank you so much, Connor.
Connor Steinbrook 24:38
Bye, guys! I appreciate you guys. May God bless you.
Chris Bounds 24:40
Okay, cool.