Today on Power House, Tracey Velt sits down in person with Robert Palmer, founder and CEO of LPT Realty, at LPT’s studio in Orlando.
Robert and Tracey talk about LPT’s remarkable journey from a simple marketing tool to a top brokerage in just three years. He discusses the importance of self-funding, agent empowerment through dual brokerage models, and how to maintain an agent-first philosophy.
Robert also discusses upcoming initiatives like ASCEND University, the Aperture luxury brand, and Leads Connect, along with future growth plans including a public IPO and expansion into new markets.
Here’s what you’ll learn:
LPT’s transition from a marketing tool to a brokerage was driven by a desire to support agents.
Self-funding allows for greater control and prioritization of agents' needs.
The brokerage model should empower local agents to make decisions about mortgage and title services.
Navigating industry challenges requires a commitment to agent choice and autonomy.
Understanding and balancing both business logic and technology for successful software development.
LPT’s growth strategies include expanding training programs and launching a luxury brand.
Related to this episode:
LPT Realty | RealTrends Verified
https://www.realtrends.com/brokerage-profile/lpt-realty-orlando-fl/
LPT Realty's Robert Palmer is building a 'brokerage for life’ | HousingWire
https://www.housingwire.com/articles/lpt-realtys-robert-palmer-is-building-a-brokerage-for-life/
lpt realty
https://www.lpt.com/
Enjoy the episode!
The Power House podcast brings the biggest names in housing to answer hard-hitting questions about industry trends, operational and growth strategy, and leadership. Join HousingWire president Diego Sanchez every Thursday morning for candid conversations with industry leaders to learn how they’re differentiating themselves from the competition. Hosted and produced by the HousingWire Content Studio
Robert and Tracey talk about LPT’s remarkable journey from a simple marketing tool to a top brokerage in just three years. He discusses the importance of self-funding, agent empowerment through dual brokerage models, and how to maintain an agent-first philosophy.
Robert also discusses upcoming initiatives like ASCEND University, the Aperture luxury brand, and Leads Connect, along with future growth plans including a public IPO and expansion into new markets.
Here’s what you’ll learn:
LPT’s transition from a marketing tool to a brokerage was driven by a desire to support agents.
Self-funding allows for greater control and prioritization of agents' needs.
The brokerage model should empower local agents to make decisions about mortgage and title services.
Navigating industry challenges requires a commitment to agent choice and autonomy.
Understanding and balancing both business logic and technology for successful software development.
LPT’s growth strategies include expanding training programs and launching a luxury brand.
Related to this episode:
LPT Realty | RealTrends Verified
https://www.realtrends.com/brokerage-profile/lpt-realty-orlando-fl/
LPT Realty's Robert Palmer is building a 'brokerage for life’ | HousingWire
https://www.housingwire.com/articles/lpt-realtys-robert-palmer-is-building-a-brokerage-for-life/
lpt realty
https://www.lpt.com/
Enjoy the episode!
The Power House podcast brings the biggest names in housing to answer hard-hitting questions about industry trends, operational and growth strategy, and leadership. Join HousingWire president Diego Sanchez every Thursday morning for candid conversations with industry leaders to learn how they’re differentiating themselves from the competition. Hosted and produced by the HousingWire Content Studio
Category
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NewsTranscript
00:00If you give agents the way to stay with you, to be that brokerage for life, to succeed and realize their definition of success through different seasons of their business, through different seasons of their life, then you can stop that attrition.
00:12You can slow that attrition down, and that's how the brokers can continue to grow.
00:22Welcome to the Powerhouse Podcast.
00:25Today, I am talking to Robert Palmer.
00:27He is the founder and CEO of LPT Realty, and welcome to the podcast.
00:33Yeah, excited to be here.
00:34It's kind of cool how this worked out with you being local, and we're here at the LPT studio, and I'm really excited to be a guest on your podcast from our studio, and this is going to be great.
00:41Yeah, I am literally about four miles maybe from home, and I sat in today on the LPT Realty Motivational Monday session, so that was really fun.
00:53Got to learn a lot, a lot of great energy here, so thanks for inviting me.
00:56It's been fun.
00:57We've been doing the Motivation Monday basically since we started the brokerage, maybe four or five months in, so a little over two years now.
01:04I haven't missed a single one, neither has my co-host.
01:06No matter where we are, we log in every Monday, so every agent at LPT knows that Monday mornings at 11 Eastern, they're going to get updates on the market, updates on the brokerage from myself and our EVP, Matt Hodge.
01:16And that's our studio here. Matt's picture is actually on the wall behind you there. You're in his seat. If anyone's wondering who that person is behind Tracy.
01:23But yeah, really excited and glad you got to sit in and see that. I think it's become a really important part of our culture and who we are.
01:29Being a cloud brokerage, the fact that probably about a third of our agents log in every Monday and watch the live Motivation Monday.
01:36And we have agents that have watch parties at their houses or at their local offices.
01:39It's just become a really, really interesting part of our culture and this uniting thing across the brokerage.
01:45Yeah, definitely necessary in today's market, for sure.
01:49So I want to talk because I remember when I was at Florida Realtor Magazine getting a box, a box called Listing Power Tools.
01:59And that box has now turned into a brokerage.
02:02You also have RP funding, which is completely separate.
02:05And I do want to talk about that later because I think it's kind of a novel idea in the industry.
02:09But tell me how that evolution came from this marketing box to a brokerage.
02:16Yeah, you know, I tell me, like, I'm a marketing guy.
02:18Like, I didn't have the success I had because I was the best mortgage guy.
02:21I was the best marketer, you know, and I spent a lot of money, reinvested a lot of profits on TV advertising.
02:26And I always did a lot of direct mail and print marketing.
02:28And I was always a big believer in building that brand through print.
02:31And so I think the genesis for Listing Power Tools was I had a lot of friends that were real estate agents.
02:36You know, we were adjacent to the real estate market through my mortgage company.
02:39And so we wanted to launch something to help agents be better marketers.
02:43You know, I had a good friend who was an agent who was almost exclusively buyers.
02:47And I was trying to help him break into listings.
02:50And that was a big part of the box.
02:51The idea was an agent who's maybe trying to break into listings, who isn't that known farming, you know, number one brand agent who sells the most houses in the neighborhood.
03:00How do we give them an unfair advantage to show up and win the listing?
03:04And that's really where the power pack came from.
03:05And what we found is if an agent goes in and overwhelms the seller with this amazing marketing, with this print collateral, these tangible things they can see and touch and feel, all of a sudden they would win more of those listings up against that kind of incumbent listing agent.
03:18And that was the genesis for the product and had a lot of success with it.
03:22We grew it, you know, we sold it as a subscription product, and then agents would buy the boxes from us.
03:27And I think one day I just kind of realized that I didn't love that relationship.
03:30I didn't love the idea that the agent who needed listing power tools the most was also the agent who maybe couldn't afford the monthly fee, you know, or the agent who couldn't afford to buy the boxes.
03:39Because it really was about helping the little guy win, helping an agent break into listings.
03:44And so I think the real idea of saying, hey, if we become the brokerage, we don't have to charge those monthly fees anymore.
03:50We don't have to charge, you know, for the box anymore.
03:53We're just going to win when they win.
03:55And I really love the way that relationship felt.
03:57And for me, that was the whole concept of saying, all right, we're basically going to wind down this really successful software as a service company and then relaunch it as a brokerage so that we can have a more unified relationship with our agents, our clients.
04:10Yeah, and that was three years ago you started with brokerage.
04:13And now you are number 10 by transaction size and 14 by volume on the Realtrans verified brokerage rankings.
04:19So congratulations.
04:20Yeah, it's been a wild ride.
04:22You know, we sat down and we actually made that a goal.
04:24We were like, hey, can we be top 10 in three years?
04:26And I think at the time there was a lot of skepticism around that.
04:29I mean, maybe I didn't even fully believe it.
04:31You know, you look at how long it took most brokerages to break into the top 10, how long it takes most brokerages to scale to the size we've been able to do.
04:38But that three-year mark was really something we thought was reasonable, thought we could achieve it.
04:42And I would tell you by about March of last year, I knew we were going to do it.
04:46You know, because, again, the way the growth works, you see the growth coming, the transaction counts kind of lag the agent count.
04:51And so as much as a year ago, I knew, like, all right, we're going to maybe we'll be 11, but we're going to be 10 or 11.
04:57And it started to feel real.
04:58And then it was this, like, I don't know, this big moment of, like, anxiety leading up to the final announcement.
05:03I'm like, man, as much as I will be proud of us if we're number 11, it's not 10.
05:08You know, we want to be in the top 10.
05:09And so when the real trends came out and we were number 10 by transaction count, it was just this really, I think, great validation of the value we're bringing to our agents, the additional productivity that LPT agents are experiencing because of the tools, because of the culture, because of things like Motivation Monday.
05:24And so I'm very thankful for you guys for putting that out so we can kind of see that, so we can have that benchmark and understand where we fall in the industry.
05:31Yeah, I will say that it took EXP and Compass both seven years to get to number one.
05:37Okay.
05:37So that's your, you got to beat that, right?
05:40Yeah, absolutely.
05:42No, no, that's seven years from when you guys started tracking them, right?
05:44That's not seven years from opening.
05:45Yes, you're right.
05:46It is seven.
05:47Well, I'm trying to think.
05:48I think it might have been seven years from Compass's founding.
05:51Okay, gotcha.
05:52Yeah.
05:52Not sure about EXP.
05:53I got to know where the goal line is.
05:55Yeah, I'll let you know.
05:56I have to check on that because I'm not actually sure.
05:58Okay.
05:58But I do want to talk about one thing that I think is pretty rare in today's brokerage world is that you're self-funded.
06:05Yeah.
06:05You know, I mean, that obviously used to be the way it went with REMAX and even Keller, you know, until recently.
06:14Right.
06:15But that doesn't generally happen in today's brokerage world.
06:19So tell me a little bit about that decision, why you chose that.
06:23And, you know, I know that you're looking at an IPO this year.
06:27So talk to me a little bit about that, too.
06:28Yeah, I think really it was the commitment.
06:31You know, like I believe, you know, like why do you take outside capital?
06:33One, I had the financial wherewithal from my success, you know, and other businesses to be able to fund the company.
06:38And then beyond that, I believed in it.
06:40And I really wanted to retain the control so that I can make sure that I wake up every day putting our agents first, making sure that, you know, while we are going to have this IPO in the next 12 months, that we're putting our agents first.
06:50You know, I'll retain a majority shareholder and control the company.
06:53And self-funding it through the early days is the best way to do that.
06:56You know, the earlier you take capital, the more diluted you are, the more control you lose.
07:01And so by my commitment to being willing to self-fund the company all the way through.
07:04And again, if you look at the amount of growth we've had doing that without outside capital, without any private equity money, without Wall Street money, you know, most of the other brokerages were either already public when they hit the size that we've now hit or haven't hit the scale at all.
07:16But I just I think, one, I believe and two, I believe in our agents.
07:19I believe in our agents.
07:20They're the only other shareholders alongside me.
07:22I've had people offer me lots of money and try to buy into LPT.
07:25And as it sits today, the only way to be a shareholder is to be me who cooked this whole thing up or to be one of our agents who's earning shares through production, through attracting other agents to the brokerage.
07:34And again, we're on this amazing path to, you know, when you look at the size and scale, we're already larger than most other brokerages when they had their IPOs.
07:41You know, you look at, you know, Real and EXP both went public through either reverse merger or pink sheets.
07:46You know, Real did it in Canada.
07:48EXP did it with a failed mining company under the pink sheets.
07:51They were much smaller than us.
07:52Both those companies started trading publicly at somewhere around 1,000 agents, 1,500 agents.
07:57Then by the time they were our size, they had already uplisted to NASDAQ.
08:00And so our goal is just go straight for the big exchange from day one.
08:04We're looking at both New York Stock Exchange and NASDAQ.
08:06But to be able to have that what I would call blue chip IPO, where we go public at the right size in order to put some capital on the balance sheet and really position ourselves with investors for that next leg of growth.
08:16Yeah. And I think that the one thing we talked about in a previous interview is just scaling and plateauing.
08:25You have a huge ramp forward, obviously, but a lot of brokerages get to that plateau and they just they just don't grow anymore.
08:35And you had some ideas around that.
08:37And so I wanted to talk to you about, you know, how do you how do you feel like you're going to sustain the growth and keep growing?
08:46Yeah. So I think one of the interesting things is, you know, the only market that we've been open in for all three years is Florida.
08:50And we started in Stellar.
08:52And so if you look right now, depending on which report you use, we're either number one or just under number one in age and count for Stellar.
08:59There's months where we're right there in top two or three in production.
09:02Again, production lags a little bit.
09:03It takes agents time to get into production.
09:05New construction deals they wrote a year ago are still going under their own brokerage, old brokers.
09:09They haven't come to us yet.
09:10But the fact that we've been able to break in and hit that scale in just three years in Florida.
09:15And then if you look at Florida as a whole, you know, we're in the top two or three by overall age and count already.
09:19And so we've been able to prove that our model can go deep.
09:22It gets dense in markets.
09:24You know, it's one thing to say, hey, you reach 15,000 agents across 50 states.
09:29That's not a lot of agents per state.
09:30But we've been able to achieve very rapid growth and continue to scale deeply in Florida.
09:35And so we expect that to continue in other markets.
09:37What I realized as I looked at the brokerage landscape is it's not that brokerages stop growing because they stop attracting.
09:43It's because their attrition, the number of agents they're losing every month equals the new agents joining.
09:48And that's where growth stops.
09:49It's not like all of a sudden people wake up and stop joining an EXP or whoever it is.
09:53It's that there's more agents leaving than are joining.
09:56And that's when you see agent count come down year over year.
09:58And so we studied and said, well, why do agents leave?
10:01Right.
10:01Where do agents go?
10:02Why are they leaving brokerages?
10:04And a lot of the reason we found is, is that that brokerages model no longer fits that agent's definition of success.
10:10And that's a phrase I use a lot.
10:11I know I use a lot with you on the last podcast.
10:13This idea of individual definition of success is something I believe in as an entrepreneur.
10:17It's something we're deeply committed to impacting and supporting for our agents.
10:22And then that comes into the second concept with agent choice, letting agents choose.
10:26And so the idea at LPT is we have these different models that are built for agents at different arcs in their career.
10:32If you're interested in being a solo agent and you have no interest in attracting others to the brokerage, you don't want to be a team leader, you can get better economics.
10:41Other agents who do want to attract other agents, build an organization, build a team, have a branch office, be a mentor, they can have a different set of economics.
10:49And the cool thing is that agents can make a choice between those two.
10:52And now we're adding our third choice, which is Aperture, our standalone luxury brand, which is even another set of economics.
10:58But really, if you give agents the way to stay with you, to be that brokerage for life, to succeed and realize their definition of success through different seasons of their business, through different seasons of their life, then you can stop that attrition.
11:11You can slow that attrition down.
11:12And that's how the brokers can continue to grow.
11:15And what's the breakdown of agents as far as choosing which model they want?
11:20Yeah, so the interesting, I guess, kind of caveat in there is team members.
11:24And so if you look at it at any brokerage, you know, you look at an EXP, a team member can get a discounted cap.
11:29At Keller Williams, a team member can get a discounted cap.
11:32And so when we look at it, we lump the team members and their team leaders together into that one set of economics, even though they're on different caps.
11:39And it's about 50-50.
11:40So about 50% of the brokerage is either agents who have chosen to be on that, what we call brokerage partner plan, where they can earn money from other agents,
11:49either being on a team with them, attract them into their organization, or those are their team members.
11:54And then the other half of the brokerage is the solo agent who is taking advantage of our 100% plan with our $5,000 cap.
12:00And that's pretty much how it breaks down.
12:02Okay, that's interesting.
12:03The other thing I wanted to talk to you about, which I think is fascinating because you own and still own a mortgage company,
12:11is that you don't believe first that single entity brokerages should be involved in mortgage or title.
12:17And that has been the rallying call for brokers for years.
12:22Like, to be more profitable, you have to be in these mortgage, either joint ventures or owned mortgage or title.
12:28So tell me why you feel that way and how it's part of your strategy.
12:34Yeah, I think it's one of the big moves as you've seen this new class of brokerage come along.
12:39Again, this single entity national brokerage.
12:41This is your compasses, right?
12:43There's no franchises.
12:44Compass owns the brokerage in every state they're licensed in.
12:47EXP and Real are the same.
12:49EXP owns the brokerage in every state and every country that they're licensed in.
12:53And I think that that dynamic shift is really what moved that ability to impact,
12:58or even the right, in my opinion, impact mortgage and title away from the brokerage
13:02and then back to the local team leader, the local agents who are actually boots on the ground.
13:06Now, if you go look at the more legacy models, the Keller Williams local franchise owner,
13:10they absolutely have to monetize mortgage and title to make it work.
13:14The local Berkshire Hathaway office, you know, the local Caldwell Banker office,
13:18the legacy franchises, because you have so much infrastructure and expense
13:22locked into this small geographic area, right?
13:24Like, I own this one franchise.
13:26I have a few hundred agents.
13:27I have to have a leader, a recruiter.
13:30I have to have accounting people.
13:31I have to have trainers.
13:33It's very inefficient.
13:34And that's why the brokerage side struggles to make money.
13:37And then they're able to make that up through mortgage and title.
13:39And look, and because they're in their local market,
13:41they know who the best local mortgage guy is.
13:43They can build a relationship.
13:44They know who the best local title rep and title company is.
13:47They can build that relationship.
13:49Once you elevate to the cloud, once you go to that single entity brokerage,
13:53like a Compass, an EXP, a Real, an LPT,
13:56one, you now have the scale to actually earn profit on the brokerage side.
13:59You're not locked into this old model where you have too much overhead locked into one little market.
14:05If we need to drive more revenue, we open more states.
14:07We expand into new markets.
14:09The fact that at scale, I believe we can have 150,000 agents on a single brokerage platform.
14:15You do not need to monetize mortgage and title to make those economics work.
14:18And beyond that, I don't think you can succeed at monetizing mortgage and title
14:22because you're no longer in that local market, right?
14:24You know, I don't know who the best mortgage person is in Arkansas.
14:28I don't know who the best mortgage person is in New York.
14:30I don't know who the best mortgage person is in San Antonio, Texas.
14:32Like, that's not my decision to make.
14:34It's not LPT's decision to make.
14:36And then what you see happen a lot of times is we would try to cut a deal
14:40or our competitors would try to cut a deal with a national mortgage lender.
14:43Well, no national mortgage lender is the best for their agents in every market.
14:46There are certain markets where this lender is great and that lender is great.
14:49And so I believe strongly that the economics and the decision and the control of those relationships
14:54should live at the local level.
14:56And in the national entity ecosystem, the local level is the agents and the team leaders,
15:00the people who want to have their own little branch offices, the mentors.
15:04And so we are staying out of any type of monetization at that national scale level of mortgage and title
15:09so we can let the local entrepreneur make the right choice for their business.
15:12And honestly, I think it's been a big part of our success and growth.
15:15Agents know that they're not coming here and they're going to worry about competing
15:19with our in-house lender.
15:20And it's funny because most people thought that was the whole reason I created LPT.
15:23Like that was the initial narrative.
15:25Oh, Robert's launching this real estate brokerage just so he can steal everybody's mortgages,
15:28whatever.
15:29And I guess I was prepared for that because we'd already made the decision to completely
15:32firewall the two companies.
15:34I've pivoted RP funding my mortgage company completely to refinancing and servicing so that
15:39we're not even competing in the purchase space with the agents, local preferred lenders.
15:43But I think it's a big part of the success.
15:45The entrepreneur who's drawn to LPT is the same entrepreneur who knows the best mortgage
15:50and title person in their market and they don't want to feel like we're here to step
15:53on their toes.
15:54The idea that a national brokerage would offer incentives to try to take mortgage or title
15:58clients away from their agents, local lenders and providers is something I think always upset
16:03me as a mortgage guy coming up.
16:05Like I knew back in the day when I was a great mortgage guy in that market.
16:08I tell a story once.
16:09I drove an hour to get a water sample for a well test so we could close an FHA loan on
16:14time.
16:15No national call center guy is doing that.
16:17And I want our agents to partner with that person, that loan officer.
16:20And that means we have to stay out of the way.
16:22Yeah, it's really interesting.
16:24Really, the story is the growth of the single entity national brokerage.
16:28Honestly, I mean, if you look at the growth, I mean, you know, obviously when you add franchises
16:35in with Keller, I think they're still the largest.
16:40But it is interesting that some of the newer entrants into the rankings are the single
16:46entry.
16:47Not always cloud based either.
16:49Compass has offices and you do have some offices, right?
16:53We have a lot.
16:54You know, our team leaders go out and start their own offices.
16:56It's interesting, you know, we launched and I guess when I use cloud, it's more the corporate
17:00infrastructure is cloud, right?
17:01The compliance is in the cloud.
17:03And if you look at Compass, it's similar.
17:05Every Compass office doesn't have a full accounting team and a full disbursement team.
17:09A lot of those services have been elevated to a corporate headquarters or a cloud level
17:14or whatever you want to call it so that the offices we do have function more as just
17:17sales offices, right?
17:18They're not cutting commission checks.
17:20They're not checking file compliance.
17:22It's about meeting with customers and agent trainings and things.
17:25But I think when you look at scale, the power we have to disrupt.
17:29The power that we have as these single entity brokerages, the services we can provide for
17:34agents, the technology deals that we can negotiate, the scale we can bring really is unstoppable.
17:40And I think you're going to see a wider and wider gap between the commission splits, the
17:45technology offerings, the support offerings, education offerings at the legacy franchise brokerages
17:51and the single entity brokerages.
17:53And we're going to continue to pull further and further away because the bigger we get,
17:56the more scale we have, the more we can do for our agents and the harder it is for those
18:00legacy franchise brokerages to keep up.
18:02Yeah, absolutely.
18:03I want to get into like this big industry issue right from now, which is the delayed marketing
18:09option.
18:10And obviously you've got people on both sides and Zillow and came out with their rules and
18:16that you can't publicly market without being in their ecosystem.
18:22And then homes.com recently said the opposite.
18:24They don't believe they don't agree with Zillow.
18:26Where do you stand on the whole clear cooperation and delayed marketing and private listing network?
18:33Yeah, I think for me, it really comes down to this, this commitment to agent choice.
18:36Like I have a lot of faith in our entrepreneurs, a lot of faith in our agents, and I want them
18:41to make that decision.
18:41Just like I want them to choose the right mortgage and title guy in their market, even though
18:45I'm a mortgage guy, I want them to make their own choices.
18:47And so I think on one hand, you know, I'm supportive of Zillow if they want to choose not
18:52to display those listings, you know, and, but I think at the same time too, and I think
18:56this was a smart piece of their policy is they're not saying agents can't do it.
18:59They're just saying, Hey, if you choose to do this, we're not going to, to display your
19:03listing.
19:04And I think I'm supportive of that overall because it allows the agent to make the
19:07choice.
19:08You know, the, the consumer chose the agent to hire, like we all start with the consumer
19:11and the consumer chose the agent that they trust.
19:14They believe, and they believe is the best person to market their home.
19:17And now that agent has a choice to make, are they going to choose to pre-market the home
19:21and then not be eligible for Zillow and potentially lose that audience.
19:24And that's going to weigh into agents decision-making.
19:27And maybe some say, you know what, for this situation, I will, this is a high net worth
19:30individual.
19:31This is someone who wants privacy.
19:32You know, I think at the end of the day, the power to make that choice should lie with
19:37the individual agent who the seller selected.
19:39And so this is one of those situations where I'm going to say LPT is not going to go out there
19:43and try to dictate to our agents.
19:45You know, we're not going to tell our agents, Hey, you, we're going to make this choice
19:48choice for you.
19:49I believe this is something that is very agent specific, market specific agent seller relationship
19:54specific.
19:54And so again, while I support Zillow on their policy, it's not something we would try to
19:58then force upon all of our agents across the LPT ecosystem.
20:02We want to let them make that right choice for themselves and their client.
20:05Yeah.
20:06I mean, it really is to kind of a luxury property, you know, generally are the ones who want to
20:14do the private listings.
20:15Yeah, I do.
20:16I do think one comment I'll kind of make on this.
20:18I do see a fight happening where people who represent very different markets, right?
20:22To your point, like, yeah, yes, the agents who are primarily in luxury, they're representing
20:26properties that are over two, three, four or 5 million high net worth individuals, people
20:30who have a different idea around that are taking one stance.
20:34And then folks that are selling the median home price, you know, are taking a different
20:38stance.
20:38And so again, I think that's where it really comes down to each agent's choice, each agent's
20:43decision with their consumer on how they're going to market their property.
20:46And because what I do love is like Zillow didn't come out and say, hey, we're going to ban
20:49that agent for life if they do this.
20:51They're saying, hey, that particular property will now be ineligible to go on Zillow.
20:55And I think that was a, I think that's an okay way to do it because you're letting
20:58the agent choose on a case by case basis.
21:01If the stance was, we're going to make every agent do this, or we're going to throw them
21:04off of Zillow, that would be a different policy that I would probably have an issue with.
21:08But I'm supportive of the approach to say, look, you make the choice, but if you make
21:12that choice, we're going to then choose to not show your property.
21:15And I think that's, I think that's how entrepreneurship works.
21:17Yeah, definitely.
21:19And as an entrepreneur, this is a question I ask in every podcast.
21:24Obviously, you've had multiple aha moments throughout your careers in different companies.
21:29But what was the biggest aha moment that really stood out to you that caused you to maybe
21:35pause and shift gears and do something big?
21:39Yeah, so while we were designing, so we made this decision all the way back in like 2018
21:44or 19 that, hey, we were going to start to sunset listing power tools.
21:47We never closed it.
21:48We just stopped signing new agents up.
21:50We stopped promoting it and kind of let the attrition actually run off.
21:52We stopped innovating, stopped bringing out new products because we knew at some point in
21:56the future, we wanted to become a brokerage.
21:58We didn't know exactly when that was.
21:59And so as the pandemic hit and the boom hit, the idea was, all right, when rates go up and
22:05the punch bowl gets taken away by the Fed, we know there's going to be a lot of pain in
22:08the industry.
22:08That's the right time to launch.
22:10And so the timetable started to come into focus.
22:13And then the idea was, well, what's the model going to be?
22:15And so we knew we wanted to be a brokerage.
22:17We knew we wanted to give listing power tools to our agents for free.
22:20We knew we wanted to win when they win, not have monthly fees.
22:23Like there were some core things that we knew.
22:25But then the big decision was there's two fast growing models.
22:28The 100% model and the rev share model.
22:31And while the rev share model is easier to see because EXP is single entity, real is single
22:36entity.
22:37The 100% is a little harder to see because it's a lot of mom and pops.
22:40There's a lot of 100% brokerages across the country that have 800, 600, 1,000 agents.
22:45And so we did this big data project where we added them all together as best we could.
22:49And we realized they were actually growing faster during that period of time than even
22:54the fast growing recognized rev share brokerages were.
22:57And so for months, we were back and forth between the two.
23:00You know, on one hand, it's like, well, the agent who wants to build a team, who wants to
23:04attract and build a downline and have an organization, that entrepreneur is drawn over here.
23:09And then agents who are really focused on their craft, they want to put as much money in their
23:12pocket as they can per closing.
23:14They're drawn over here.
23:15And you don't see a lot of teams at 100% brokerages.
23:18And you don't see a lot of the agents who are doing the less production at this type of
23:22brokerage.
23:22And I was back and forth.
23:24Like we were literally back and forth, back and forth.
23:26We had both models built.
23:28And then the aha moment was, let's do both.
23:30Like I remember I woke up, I called Matt, my chief strategy officer.
23:33I'm like, get over here.
23:34I figured it out.
23:34We're going to do both.
23:35And he has no idea what I'm talking about.
23:37You know, he comes over to the house.
23:38I'm like, look, I figured out like, this is how the two models can fit together and create
23:42harmony.
23:43And we, we let them choose and they can move up and they can move down.
23:46And these agents make rev share on those agents, but those agents don't make rev share
23:49on other agents.
23:50And it was really a big breakthrough.
23:51And I think that moment really set LPT up for everything we've been able to accomplish
23:56since then.
23:57So in, you know, I, I've been doing this for a long time and I'm not going to tell you how
24:02long, but it's been a long time.
24:03And I, you know, I remember when Zillow came to market, I remember when that, the, you
24:08know, tech was the biggest differentiator for brokers.
24:13It's table stakes now.
24:14I mean, it really has not, it's not, it offers value obviously, but it's not the value that
24:20brings agents generally to a brokerage.
24:23But it's also very expensive and you're self-funded, but you also, I think produced your, you know,
24:31built your own platform.
24:33So tell me a little bit about that and kind of the trial and error that went into it or
24:38what, what did you learn doing that?
24:41Yeah.
24:41So one of the things that happened early in my career is early in the mortgage days, there
24:45was a piece of software I needed.
24:46We were doing this niche type of lending and I needed a piece of software and I got a quote
24:51to build and I couldn't afford it.
24:52And so I actually taught myself how to write code.
24:53I went down to books a million back in the day.
24:55This is, I'm dating myself, right?
24:57Like back when there were bookstores and you went to the bookstore to buy books, Amazon
25:00wasn't a thing yet.
25:01And I bought every book on coding at my local books a million and locked myself up in the
25:06house for a week and read them and then wrote the piece of software.
25:09And I fell in love with coding through that process.
25:11And for me, it's, it's like this hobby that relaxes me.
25:14So mortgage, real estate title, everything that your subscriber base is in is chaotic, right?
25:20We can do everything right.
25:21You do everything right and something goes wrong.
25:23You know, the sellers get divorced the day before closing, the buyer buys a new car, the
25:27whatever happens, right?
25:29So a medical collection pops up on their credit report at the last minute.
25:32We did everything right, but something went wrong.
25:34And so for me personally, the ability to write code was, was like soothing.
25:38Like it brought order to the chaos.
25:39I would have these days at the mortgage company where we did everything right.
25:42And it just seemed like everything went wrong.
25:44And then I would go write a thousand lines of code.
25:46And when I hit go, if I did it correctly, it would do it right every single time.
25:50And it was just something, something balancing about that, something meditative about that.
25:55And so I wrote code and wrote more code and wrote more software.
25:58And it was a big part of the strength of the mortgage company was a lot of that software
26:01I wrote.
26:01And I got good at it.
26:02You know, I didn't go to college for it.
26:04I always had imposter syndrome, never thought I was good enough, whatever.
26:07But I got really good at it over decades.
26:08And so when we went to launch LPT, you know, built the software, I wrote the alpha version.
26:13I've got a dev team that comes in behind me and then helps take it to production.
26:16But the interesting thing is the cost to build software has come down dramatically.
26:20I mean, you look at the technologies that are out there, like we use Vue on the front
26:23end, you know, the back end frameworks that have been built.
26:26All of these things have really made it easier to build software.
26:30But where the big disconnect comes is the business logic not getting translated properly over into
26:36the software.
26:37And so because I can understand both and I can sit down with the dev team and as we're coding,
26:41we're making changes.
26:42Wait, if it does this, that'll be better for the agent.
26:44Let's make it do that.
26:45And so I think that that ability to understand the business logic and the code was a big part
26:50of us being able to do it at a much lower cost.
26:53We also had all of the development we've done for listing power tools.
26:56A lot of that technology, particularly on the marketing side, was able to just plug right
26:59in.
27:00But the cost to build software have come down dramatically.
27:03But I think a lot of brokerages are missing it.
27:05They're almost being taken advantage of by their dev teams or by their third party development
27:09companies because there's such a disconnect between the business logic and the final product
27:13that they just end up wasting a lot of money.
27:15And we've been able to bypass that here and get a great product in the hands of our agents
27:19very quickly at a cost that didn't break the bank.
27:21Well, it helps that you learned coding.
27:24So my last question is just what is your growth strategy?
27:30What is your plan moving forward to take you to that next level?
27:34Yeah.
27:34So we've got three big things coming out this year.
27:36You are a SEND university, which is the launch you witnessed here today, which is our goal
27:41is to be the number one training brokerage in the country.
27:44Last year, Training Magazine recognized us in the top 100.
27:47We want to be the number one brokerage in the country for training.
27:49We actually are sitting here in a former ITT tech campus that we've converted to what
27:53we call our SEND university.
27:55We're going to have a thousand live events for SEND this year available to agents at
27:59any brokerage on top of the education we do inside of LPT Realty.
28:03We think that's a critical part of where we're going.
28:05We're launching our luxury brand, Aputure.
28:08That's a big part of where we're going.
28:10Aputure is a standalone luxury brand.
28:11So if you think on the LPT side, it's agent centric, it's agent first, agent can take our
28:16logo and turn it whatever color they want.
28:18There's camouflaged versions of the LPT logo out there and hot pinks and yellows.
28:22And we really think of that as the period at the end of the agent's brand or the team
28:25brand.
28:26And then they have complete control over the branding within state guidelines.
28:29Aputure is for agents who want that more brokerage brand.
28:33They want brand guidelines.
28:34They want to know that the Aputure agent in Denver's marketing looks similar to the Aputure
28:39agent in Miami and in New York.
28:41And so we really see it playing more in the higher end luxury market.
28:45Aputure is focused on competing with the Compass's and the Sotheby's and the Christie's.
28:49You know, it's interesting when we look at the market, Compass is number one by volume.
28:52EXP is number one by transaction count.
28:54You don't see a lot of agents moving between the two.
28:56And so instead of banging our head against a wall and saying, well, why can't we get
28:59all these Compass agents to come to LPT or these Sotheby's agents to come to LPT the
29:03way we've seen other cloud brokers just try, we're launching this second brand, Aputure,
29:07which is built to squarely compete with the Compass's and the Sotheby's and the Christie's
29:11and give that brand feel and give those production requirements for agents to be a part of the
29:16brand and really focus on that higher end market.
29:19So, you know, Michael Valdez joined us.
29:21That's a big part of his focus.
29:22We're launching Aputure globally, which has never been done before.
29:25Single entity luxury brokerage launching globally.
29:28And then finally, we have a product called Leads Connect coming out.
29:32Again, I built my mortgage business by going on TV and radio and reinvesting profits and
29:36driving opportunities.
29:37We want to do that for our agents at LPT as well.
29:40And so we have this Leads Connect program that's going to be launching later this year as well.
29:44And then beyond that, we just continue to show up every day.
29:46We execute at a high level.
29:47We make sure our agents have a great experience.
29:49We make sure our tools continue to help them close that extra two, three deals a year that
29:54can make a difference in their personal P&L.
29:56We continue to respect their age and choice.
29:58We continue to support their individual definition of success.
30:01And I'm excited about the future.
30:03Yeah.
30:03And if you're in the Florida market, if you haven't seen an RP funding commercial,
30:07then I don't know where you've been.
30:09So that's for sure.
30:11Well, Robert, thanks so much for joining the podcast today.
30:14Congratulations on all your success.
30:16Thank you, Tracy.