Courtney Poulos, broker-owner of Acme Real Estate, started her Los Angeles-based real estate brokerage for the low, low price of $1,000 a month in rent. She and Luke Monroe, broker and CEO of Kendrick Realty, dish on the real cost of doing business as a brokerage owner at Inman Connect New York.
Courtney Poulos, the broker-owner of Acme Real Estate, launched her Los Angeles-based real estate brokerage for the low, low cost of $1,000 a month in rent. She’s since added 25 agents across two offices while closing approximately $100 million in sales volume.
“When I started my brokerage it was just me, and I got a brick-and-mortar space and that $1,000 a month commitment to that space brought me into the office every day,” Poulos told the crowd at the Indie Broker Summit at Inman Connect in New York on Monday.
Poulos said advertising for free on social media helps the bottom line, and if you’re already an agent, you come with contacts. It wasn’t until her business began to grow that she hired a social media person, for example.
“We spent a long time up front with our first office trying to come up with a replicable, scalable plan,” Monroe said.
Monroe opened new offices in Southern California and Florida last year and plans to open eight more this year. His strategy is a hefty spend on lead generation – $3,000 per agent per month.
“We approach online leads as our business strategy, not a business strategy augmentation,” Monroe said.
Monroe laid out some of the estimated costs for opening a new brokerage office, from $40 per person to $2,000 per office for lead generation and organization. And $2,500 a month to 35 percent of gross commission for client nurturing. But perhaps the biggest unforeseen cost is the owner’s time and expertise, which has a major value, according to Monroe.
“Start with your spreadsheet,” Monroe said. “Go through and understand rent, licensing, what it costs to get your foot in the door. Do it intentionally.”
Both Monroe and Poulos emphasized the importance of investing in people up front. That investment is part of Monroe’s scalable strategy. He said he can build an office anywhere in the country and in any market, just as long as he has the right people.
Poulos’ upfront investment tactic comes in the form of a training program for new licensees and brokers that are fed up elsewhere. She recalled recently losing a few agents to Compass, which “pissed her off.”
“Turnover is so expensive,” Monroe said. “Turnover is one of the most expensive things that any broker can experience.”