If you’re looking to build a passive income, eXp Realty is the perfect way to get started.
If this sounds like something you’d be interested in trying out, watch this video to know how!
Transcript:
Chris Bounds 00:00
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 you look at the time and energy and then debt to achieve that, yep. To what has been done with eXp what is being done what you’ve done with grants done what I’m doing now. It’s just so much easier.
Connor Steinbrook 00:33
Yeah. So 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. So the thing about rental properties is, I mean, what most people do, they’re doing a traditional fixed and finance out. Some people call that reverse strategy, right? So they’re marketing. On the front side, cost of marketing has gone way up. As you guys know, deals are getting tougher to get especially in this markets insane right now.
So a lot of people are spending some were 5, $10,000, even I’m hearing per transaction that they’re getting. So that’s the first step of the business, you need capital to grow the business with what we’re doing 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 we’re talking about these numbers, these are pretty much net numbers, we have an $85 month, the cell phones, some traveling expenses and some dinner expenses, but there’s really no expense into it.
So on the vertical side, you have the acquisition side capital intensive, you need to spend money, you’re taking a risk, you don’t know if the deals are coming, when they’re coming how good a deal they’re coming, or going to be when they come in. So then you have the second step, you have the acquisition process, which takes money, right, not just your marketing money, but real money to buy the property. So usually hard money lenders, private money, lenders, IRA investors, things like this. So you’re going to usually get into the deal with an interest only loan.
And that’s going to start the process. Now you’re gonna have to fix the house up, you’re gonna deal with contractors now this potential extortion, than walking off the property ripping you off. And usually it can take you 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 seasoning requirement, then you go do the cash out refinance and amortizing loan. And then you have the management side on the back end. Now, you get tenants toys and termites, repairs.
I mean, we all know what it’s like to renovate a house, please. Yeah, put a tenant in there right after you renovated in there all moved in. And the first thing they say is, hey, guess what my plumbing is not working or something because you just did, you know, huge renovations, so it can be crazy. So you’ve got capital risk throughout it, it stress risks throughout it. And then the timeframe to do this, you know, once you stabilize that property, hopefully had the equity position in place. So you got a good 20% plus equity position. So you get 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 get it kind of stabilized out.
Chris Bounds 02:55
In this market. It’s less than that. It’s just part of the evolution of rising prices.
Connor Steinbrook 03:03
Yeah, but I mean, think about that, guys. So 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 from residual sides. And so a capping agent at our business model here at eXp is equivalent to twenty eight hundered dollars in residual income for the annual year. So if you divide that 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 comparison, right? So you’re avoiding the slow growth, you’re not having that seasoning 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 sustain themselves because they’re successful 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 leaves and walking down the street buying other houses for you.
So when I sponsored Brandt, whose Christmas sponsored brands, now sponsored, you know, well over 50 people, I think in the company is at what point I forget his 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 house or buy a 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.
She her husband found this deal, and actually had this house funded partially by Chris, his sponsor Brandt, who lived on this deal. So there’s a lot of synergistic nature and how our businesses overlap, but I’m 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 the least with with carrying that low risk as well.