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The Optimal Economic Structure for a Small Real Estate Team w/ Anthwon Thomas

This Keeping it Real gets deep into “The Optimal Economic Structure for a Small Real Estate Team w/ Anthwon Thomas.” Hosted by Greg Harrelson and Frank Klesitz, the episode talks about the realities of agent splits, staff compensation structure, marketing budget percentage, and setting up an overall economic model when planning for a small team. More importantly, you’ll be inspired as you hear the passion, commitment, and joy evident in Thomas and Harrelson as each shares the journey of becoming a leader.

As a passionate entrepreneur seeking a life in real estate, Thomas spent hours preparing for his career as an agent, but more importantly as someone who could lead a team. In the beginning it was just him, but from the day he hired his assistant, he knew he would be a success. He knew it, because he could see it. Thomas had prepared by watching hundreds of hours of training ahead of time, in the form of Keeping it Real episodes and related Real Geeks training. This coaching helped Thomas internalize the message, “Whether I was going to fail or succeed, it was a win for me,” Thomas said.

Klesitz and Harrelson were amazed at his drive, and Harrelson recognized it as a key to Thomas’ success. Harrelson says: “Anthwon minimized his risk by maximizing his learning,” he said. Thomas attributes his success to his supportive wife and the knowledge gained as he internalized the role plays shared in those video trainings. I had to have focus and the belief that I was a winner, and a competitor,” he said.Thomas went on to explain that success is about working smart, “It’s not about how intelligent you are, it’s about how many times you were being intelligent,” he shared.

Your Market Does Not Determine Your Success

With a business based in Lafayette, Indiana, Thomas shows that “you can still be profitable in any market” as his small team consisting of three sales agents, a director of operations, closing coordinator and virtual assistant generated 120 deals last year in a market with a median sales price under $200,000. Thomas himself is no longer closing deals, and instead serves in a management role, helping his agents stay focused on prospecting and closing deals. 

Part of Thomas’ success lies in keeping costs low (marketing budget was $53,000) and morale and expectations high. His company has published standards for work efficiency and production for their agents which include:

  • Have a minimum of 25 contacts per day (125/week).
  • Close a minimum of 2 transactions each month.
  • Attend all team meetings (2 grace days permitted).
  • After 6 months, agents pay $495 unless monthly transaction goals (2) are met in the previous month.
  • If the above goals are not met, the agent agrees to participate in a system of change. 

Thomas finds that his system provides clarity, incentivizes, and works well for his motivated team, and shared that the agents hold one another accountable. “When we bring agents on the team,” he explained, “We future pace them… We let them know what to expect.” Believing that the amount of contacts you have per day will be the number of closings you have per year, Thomas provided insight into why his system works. Even knowing this, Thomas felt building systems and processes was the value he could best contribute in his business, so left transactions to his agents.

There Is No One Answer to Building a Team

Impressed by Thomas’ system, training, and team, Harrelson and Klesitz discussed how approaches may be different, but that success happens with consistency. Harrelson shared that his team approach is unlike Thomas’ in some ways. For instance, Harrelson requires no minimum sales standard, but guides individual agents based on their own goals. “My job is to help them accomplish what they want to do,” Harrelson said. Harrelson encouraged agents seeking to grow a team to make their first hire an assistant and suggested they convert 50% of time saved into lead generation time. When growing their businesses, Harrelson and Thomas took different approaches. Thomas reinvested his time into building a business. Harrelson reinvested his time into listings. “Both of us probably did it right, based on our vision of the model,” Harrelson said.

Thomas explained that he didn’t do everything perfectly in the beginning. Talking about his failures, Thomas acknowledged, “Even though I sold homes, I didn’t lead correctly. The first agent I brought on didn’t stay with us long. I needed to prove myself a little more and make sure I was gliding, not grinding, everyday.” He realized he had to be more of a team player and changed his process so he could deliver more value and add more support, Thomas explained saying, “At that point things started taking off.” Harrelson agreed, “I’m a big believer in leading by example,” he said. Harrelson shared that he doesn’t have his own office, though he does make use of a conference room, because his goal is to build and teach his team. “I want to be with agents,” Harrelson said, talking about his leadership style.

Leadership Success is About Accountability and Drive

“The reality is if I need to sell a home today, I can,” Thomas said, adding that his role and value is in building out “a strong bench of great players” to contribute to the team’s success. Thomas believes in accountability. He shared that his son checked in with him everyday when he was getting started at building his business with the question “Dad, did you follow or execute on your obligations today?” 

Explaining that leading a team is about feeling led, Harrelson said, “Let your passion and your heart take precedence in your decision. The economics will magically disappear.” A true leader puts in the effort required to see the dream through, Harrelson explained as he shared a story about ditch digging. “It’s not about being a resource,” Harrelson said, “It’s about being resourceful.”

If you’re planning to grow your team in 2021, or anytime in the future, you’ll want to watch this amazing episode. Internalize these practical tips and insights to ease your transition and have you seeing success from the start!

Here is a transcription of the entire discussion:

Frank Klesitz:

Mute out, Leah. Make sure you're muted. And here we go. Let's rock and roll. Everyone, it's Frank Klesitz. Welcome. Welcome. Welcome to Keeping it Real.

 

Frank Klesitz:

I want to let you know that a couple of housekeeping things before we get started today. You see the topic down below here on YouTube. But you're going to learn how to build the optimal economic structure for a team or one way to do it that's fairly optimal for Anthwon here, in a minute.

 

Frank Klesitz:

I want to let you know that you can check out all the past Keeping it Real episodes at keepingitreal.com. We've been doing these since about 2014, I believe, if you want to go back that far. And Anthwon, actually will bring you up here, man, actually he started watching them back in 2014, and attributes a lot of his success to watching this very show. So, how cool is that?

 

Anthwon Thomas:

Yes.

 

Frank Klesitz:

So, I want to let you know that you can actually go to Keeping it Real. Go put your email address and get notified for future shows that come up. We won't email you about anything else. You won't get any sales emails or pitch emails for anything. It'll only be about future shows. And you can always watch the replay. So, if you're just joining us or you're halfway in, you can watch the replay right here. We're going live on this YouTube channel, if you'd like to watch it.

 

Frank Klesitz:

So, with that, let's get to the show. We want to know the optimal structure for a team. I want to, excuse me, introduce Anthwon to you. I'm here with my co-host, Greg Harrelson, who built the Pretty Profitable Team. And you're going to show us how you did it. Say hi, Anthwon.

 

Anthwon Thomas:

Hey, what's going on, everybody? Like Kevin or Frank mentioned, I am Anthwon Thomas, here a real estate agent, here in Lafayette, Indiana. And I'm honored to be on the show. So yeah, fire away.

 

Frank Klesitz:

Cool. So, let's start off with this question. Why don't we just get right to the point? Will you tell us the organizational structure, and then we'll get into the economic structure? But how is your current sales team structured right now in Indiana?

 

Anthwon Thomas:

Great question. So, we're currently constructed as, myself, I'm not currently in production. That's a key point. I exited production about middle of last year. So, we have three sales agents now. We've got one that's onboarding. And he just pretty much started, so brand new agent. I do want to say, all three of my agents, my sales agents right now, have not been in the business longer than three years. So, they're all fairly new. So, I got three sales agents. I got a director of operations. I have a closing coordinator. We have a virtual assistant and we have a showing assistant as well.

 

Frank Klesitz:

Let me get that straight. You have a closing coordinator, a virtual assistant, and an operations manager, a showing assistant and three sales agents.

 

Anthwon Thomas:

Three sales agents.

 

Frank Klesitz:

I'm assuming the sales agents do buyer and seller leads, buy in deals?

 

Anthwon Thomas:

Yes. Well, we got one, the new guy. He is only working buyers. And then we have two sales agents that are working both.

 

Frank Klesitz:

And what was your production? How many homes last year in the middle of the pandemic did you guys sell?

 

Anthwon Thomas:

We do 120.

 

Frank Klesitz:

That's great. And five years ago, you were just doing two to three deals a year, right?

 

Anthwon Thomas:

Yeah. I was a young pup, a solo dolo, doing two to three deals a year. Yeah.

 

Frank Klesitz:

So, here's what I like to ask, just to help everyone understand this, will you explain to our viewers, how is your team optimized after years of trial and error for optimal profitability? Give us your thoughts. Just give us a lesson on that. And then we're going to take it back to where you were in 2015 and what you learned along the way.

 

Anthwon Thomas:

Okay. Well, in order for us to be as profitable as we are with me not being in production, it first started with, what was the outcome that I wanted to have? And instead of going too deep into how it started, you have to give value to people that you are leading in your organization. And by doing that, by giving them compensation in regards to leadership, vision, coaching, training, lead generation opportunities, the brand name, accountability and support, we offer that as another form of what people call commission, right? So, we offer several forms of commission and those are some of those other forms.

 

Anthwon Thomas:

So, we are very focused on building a culture and providing as much as possible to the people within our organization, so they can focus on the money-making activities. And that helps us to be profitable, sustainable, and we can also scale as well.

 

Frank Klesitz:

Just so we can know, you're in Indiana, what's the average or the median home sales price, where you sell?

 

Anthwon Thomas:

200,000.

 

Frank Klesitz:

200,000?

 

Anthwon Thomas:

Yep.

 

Frank Klesitz:

Got it.

 

Anthwon Thomas:

So, as you can tell, there's not many mistakes that I can make. Right? My margins, they're pretty tight. So, that's what makes what we do, our click, is the fact that by giving as much value, we can still be profitable. No matter where you're at, you can still be profitable in any market.

 

Frank Klesitz:

Yeah. Because that puts, while there's no typical commission, that it probably puts a commission on the side about 6,000 bucks.

 

Anthwon Thomas:

Yep.

 

Frank Klesitz:

So, you have to split that with the agent and all your expenses. Right?

 

Anthwon Thomas:

Mm-hmm (affirmative).

 

Frank Klesitz:

Okay. You said you have some support staff. What percentage of your gross commission that comes in total from all your home sales goes to your support staff? And how do you go over the compensation for them?

 

Anthwon Thomas:

Well, support staff, out of about 14% will go to support staff. And there's still room to grow. Our legion, we're probably only pushed in about 5% to 6% of our revenue to that. So we're, as you can tell, we're prospecting based and marketing enhanced, so we're able to again, be more profitable. And we're real heavy on the staff side. And I want to continue to the other way, because I think it's very important that we keep our agents focused on prospecting, lead follow-up, appointments and negotiations.

 

Frank Klesitz:

That's something I like to dive in with you and Greg, I want to talk about that right now. So, you're fairly profitable, as you guys can see in the write-up, about 40% of the bottom line, 120 deals a year, three agents, small support team. Support team, 14% of revenue goes to pay their salaries. But what's really key here is, it's not so much what the split is or what you're paying on support staff, it's that you have three productive agents that are working for you and giving a piece of commission to your team, and not in return for a lot of marketing support, if it's only 5% to 6% of your marketing budget, is that correct? Because I've seen teams spend 20%, 30% on marketing.

 

Anthwon Thomas:

Yeah. And I don't want to disrespect anybody. I think most people that spend a lot of money on marketing is because they're marketing based. So, we're prospecting based. It doesn't cost a lot of money to get a phone line, a phone book, to hit the doors. It doesn't cost a lot of money. It's more of your sweat equity. And we do internet leads. We do social media stuff. We do branding. We do all this stuff. But we're able to just based on what we have done, 120 deals, by having a marketing budget of, whatever, this year will be around 53,000. So, you don't really have to spend that much money to sell a lot of homes and to be profitable, if that makes sense.

 

Frank Klesitz:

I'm posting a link for everyone. I want to go deeper on this, especially with you, Greg. Is I'm posting a link in the chat to the minimum agent's standards. Okay? And if I could do a screen-share here, appropriately for the Keeping it Real Show. Let me pull this up correctly and not lose what I'm doing. I want to actually put it up on the screen. And I'd like you to go through and share the minimum standards for the three people on your team with us.

 

Anthwon Thomas:

Okay.

 

Frank Klesitz:

And let me size my screen correctly, so it's not too small. All right. We're ready to do a screen share. Here we go. Go through this. You have three agents. This is what they're required to do every day. Explain this to us and tell us why.

 

Anthwon Thomas:

Okay. So, these are our minimum standards in order to maintain an efficient, productive work environment. We have implemented the following standards. So, as you can see, minimum of 25 contacts a day. And really, we push for higher than 25, we just say a minimum of 25. I think one of the rule of thumbs is the amount of contacts that you make per day will be the amount of closings that you have per year. So, we want our minimum closings per agent to be 24 deals a year. So, that's why we made the minimum of 25 contacts day.

 

Anthwon Thomas:

Now, everybody, I will say everybody's goals on our team requires much higher contacts than that. So, generally we're going to be in the thirties and forties per day, but that is the minimum. Each month, the agent will gain a minimum of two closed transaction. So again, we want to closed transactions a month, attend all team meetings. They will be allowed two grace days starting. Now, what we do is we have what we call an office fee, $495.

 

Frank Klesitz:

Interesting.

 

Anthwon Thomas:

This is a way to hold the agents accountable without having to be a micromanager. Okay? If they don't close two deals the following month, they got to pay $495 from either the commission check or write a check to the company. And it's waived if they closed two transactions the month prior. And again, that's the way for agents to just be held accountable and not be micromanaged.

 

Anthwon Thomas:

And then we have, like I mentioned before, we pay for internet leads, whether it's Facebook. We don't pay Zillow, but we do get Zillow leads. We get Google leads. So, we are dispersing those out every single day. So, if they don't follow the standards, then they get removed from that. And then as you can see, if it keeps happening, they have a sit-down meeting with me.

 

Frank Klesitz:

How do you enforce this?

 

Anthwon Thomas:

Well, number one, it starts at hiring, being very clear on the type of agent that we want, being very clear and upfront with agents. We are very extensive in our hiring process. A lot of times when we bring agents on to the team, we future pace them. We let them know what it's going to be, what's going to happen. So, and we have one-on-one meetings. We have opportunities for one-on-one coaching meetings for me to remind them. We have team meetings each week, where we talk about this.

 

Anthwon Thomas:

And the most important thing is, everybody within our team, all the agents, prospecting every single day, they hold each other accountable. If somebody only hit ten contacts, then the next agent who hit 30 the day before, they're going to say, "Hey, brother, why don't you hit your 25 or your 30."

 

Anthwon Thomas:

One thing I'm very good at and the team is good at this as well is setting up some type of accountability between each other. For example, just about three weeks ago, the agents were supposed to hit 40 contacts a day. And if they don't, the following day, they come in and do 40 pushups. I could promise you, everybody will say in 40... There were a couple of people who had to get some pushups in. But hey, after the pushups, they were sore, their muscle were big. And then they were pumped up to get on the phone. So, have a little fun with it, but generally they keep each other accountable as well. And if not, then I step in and make sure I remind them of what their goals are. And we do business planning. So, there are several different ways we do to try to keep them moving forward.

 

Frank Klesitz:

It sounds like that sheet is the secret sauce.

 

Anthwon Thomas:

It is. And more importantly, we review it often. We don't just have it there and then not look at it for 12 months. I mean, we're constantly looking at it. We're constantly giving a core value shout out. We're constantly doing those things.

 

Frank Klesitz:

When you sy you're, who's doing that, is that you?

 

Anthwon Thomas:

It's myself and my director of operations.

 

Frank Klesitz:

How often?

 

Anthwon Thomas:

Each week.

 

Frank Klesitz:

Weekly meetings?

 

Anthwon Thomas:

Yep.

 

Frank Klesitz:

Greg, when an agent comes onto your team, into your brokerage, what are their minimum standards? Are there similarities? Differences?

 

Greg Harrelson:

Yeah. Very similar. I don't have a minimum standard as a company rule. What I'm doing is I'm understanding what the individual agent is looking to accomplish. And then I guide them based on what their goals are. So, somebody might have a goal of doing a hundred transactions. Somebody might have a goal of doing 35 transactions. Both of those goals to me are equally just as good, as long as it's what they are looking to accomplish. So, my job is to help them accomplish what they want to do.

 

Greg Harrelson:

And so, instead of setting a minimum standard across the board, I'm going to coach them and say, "This is what has to be done in order to achieve this goal." And then at that point it becomes their standard. So, mine's been a fluctuate based on their goals. Because I'm going to have people that are just, they're not going to need to do the same amount as another person. And I'm not trying to get everybody to reach my goal. I'm trying to get everyone to reach their goal.

 

Anthwon Thomas:

Yeah. And to piggyback off, Greg, we do the same. So, our one-on-one meetings, I am constantly reminded them of the goal they set for themselves back in October. And they're being coached on, "This is what you have to do, a goal that you chose. This is what you need to do to get there. This is your roadmap. Are we doing it?" "No, we're not." "So, let's talk about why. Matter of fact, why don't we talk about why you even chose this number to begin with, this income goal." And we break it down. So, they're constantly being reminded in every way possible, goal, and then standards of the team as well.

 

Greg Harrelson:

Mm-hmm (affirmative).

 

Anthwon Thomas:

Absolutely.

 

Frank Klesitz:

Okay. Let's go back now, because I want to share that accountability statement with everyone, for your three agents and what you're having them do every day with the weekly meetings to hold them accountable. I want to go back down to little back to the economic structure to deliver on the promise of this.

 

Frank Klesitz:

You said you have an operations manager, a closing coordinator, a VA, and a showing assistant. What exactly are their roles? What does your operations manager do? Are they doing listings, taking the listing? What's your operations person doing? And then what's the comp range of that person? What's your closing coordinator? I think everyone understands that, what's the comp range? Share what your VA does, comp range? What would you say economically, someone should structure that as?

 

Anthwon Thomas:

Okay. So, my director of operations has been with me for four years. So, she's been with me from pretty much day one of starting the company. And has helped me grow this to where it is now.

 

Frank Klesitz:

So, she was your very first admin?

 

Anthwon Thomas:

Yeah. She started off as an admin. So, a lot of the systems and processes that we have, she built those out. It was the more, "This is what I think would work for us." 10%, I'm involved. She'll take it to the next, 80.

 

Frank Klesitz:

You found yourself a lucky hire, didn't you?

 

Anthwon Thomas:

Yeah. I tell her all the time. I was like, yeah, I mean, I think we're both lucky that we found each other like this because she's been there since day one.

 

Frank Klesitz:

So, I'm assuming she was doing everything. And then eventually, there was the next hire after that.

 

Anthwon Thomas:

The next time after that was a buyer's agent for the buyer's agent.

 

Frank Klesitz:

Okay. Next hire after that?

 

Anthwon Thomas:

I believe at that point we hired the closing coordinator after that.

 

Frank Klesitz:

In-house or outsourced?

 

Anthwon Thomas:

Well, she's outsourced. She's with the brokerage that we're at. So, we pay her per transaction.

 

Frank Klesitz:

Per transaction. Nice.

 

Anthwon Thomas:

Yep.

 

Frank Klesitz:

Is that still profitable for you doing a hundred deals?

 

Anthwon Thomas:

Absolutely. Yeah.

 

Frank Klesitz:

Greg, what are your thoughts on that, on transaction coordinator, when you maybe take them off per transaction and bring them on salary or bring them hourly? Any thoughts on when you make that switch?

 

Greg Harrelson:

Well, so the real cost in hiring a transaction coordinator, if you have your own transaction coordinator on your staff, on your hourly or salary, the perception is that you're going to, maybe you get to a point where you can actually drive your costs down. But the challenge is that position, somebody has to really pay attention to that position. So, there's going to be cost in managing of that position. And when you put them on your salary and you bring them in-house, you're going to have to hire another person just to make sure that they're doing their job right. Or you're going to have to do it. And then there's where it eats up into your costs.

 

Greg Harrelson:

So, it's not just, "Oh wow, I'm doing so many transactions now, I can just bring my own in." Yeah, go ahead. And now you're going to have to train that person. Training a closing coordinator to do the job effectively, it takes at least a year. And so, who's going to do it? The agent? That one year that they actually spend on training that person, that's going to cost them the three years of their projected profit. It'll take them three years to make up that.

 

Frank Klesitz:

So, that's pretty insightful. So, you like the idea of paying per transaction closed.

 

Greg Harrelson:

Well, I'm talking about an individual agent. As an individual agent, I think that's wiser. I think it's wiser. And so, the hierarchy would be, what Anthwon is saying, I just love what he's saying, because he said the first one was an assistant. I think the first team member needs to be an assistant. Second team member, he said, buyer's agent. Great. That's very logical. Now, and that probably made a lot of sense for his number of transactions.

 

Greg Harrelson:

To me, I would tell somebody, assistant. Now, hire that assistant first. And then what the value in the assistant is the savings of time. You get an assistant, you save four hours a day on time that you don't have to do that stuff anymore. Then you invest two hours of the four. 50% of the time you save, you must invest into income generating activities.

 

Greg Harrelson:

And then when you invest that in income generating activities, the profit you make out of those two hours is the ROI off of hiring the system. Nothing else. That's how you logic your way into the hiring an assistant. And financially, that's how you logic your way into it. Okay?

 

Greg Harrelson:

So, from there, it just depends. Where are you going to start allocating your time? Now, Anthwon has worked himself out of production. So, what he did is he says, "Okay, now I'm freeing up my time with this assistant." Well, he reinvested his time into actually really building an organization for himself. So, naturally, then going after a buyer's agent might be natural.

 

Greg Harrelson:

Now, when I first did it, I hired an assistant. I went and did more lead generation to get more listings, got so many dang listings. I had to hire a listing coordinator. Okay? And then I had so many pendings. I had a closing coordinator. Then I'm like, "Oh my gosh, what about all these buyers?" Then I hired a buyer's agent.

 

Greg Harrelson:

But the difference here is I freed up my time, went and got more listings. He freed up his time, started building an organization. Both of us probably did it right based on our vision of the model.

 

Anthwon Thomas:

Yeah. Can I ask something in there?

 

Frank Klesitz:

Yeah, of course.

 

Anthwon Thomas:

Greg just sparked something. So, Greg, makes a great point because when I got into real estate, I learned very quickly that most agents were treating real estate as a job, when I knew I wanted to treat it as a business. So, I had clear intentions coming into the business, what my outcome was going to be. I wasn't sure when it was going to happen, but I knew for a fact, I enjoyed serving people, helping people. And I had, for some odd reason, I knew I would enjoy building a business. I always was curious when I was younger like, "How did these companies become what they are?" Right? I was always intrigued with that.

 

Anthwon Thomas:

So, I had a clear intentions coming in. So what I did was I knew that financially for me, from my personal spending, I had to live way below my means, because I was going to have to sacrifice my time prospecting to help build out systems and processes, and increase the value I could give to people, that way I could attract people and retain people.

 

Anthwon Thomas:

So, I sacrificed about, really about four and a half years of just making sure I'm living well below my means, so then I can reinvest. And then what happened is once you start getting to a certain point and you got your economic structure the way it is, you now realize, well, economically, now I can regress. I can back out far as my personal production. So, that's a great point that Greg made and it sparks something to me right there.

 

Anthwon Thomas:

And I learned that from Greg. I learned that from Greg, and some other people that from, like you mentioned, 2015. Man, I was soaking up game every day from Greg and you guys, and hundreds of episodes, every single day. And I have a very obsessive... I don't know if it's a problem, but I get very... You can ask my wife, she's like, "Babe, you're listening to another podcast." She knows. I mean, it's incredible.

 

Frank Klesitz:

And I want to ask you this question. So, in order to build a team, in order to have this economic structure, you had to take the risk. That's something, I think in the way of saying this, is that the team leader, the CEO, the person starting a business, takes the risk that the agent otherwise doesn't want to take. And that risk is, who's going to write the check for lead gen? Who's going to buy the phone numbers? Who's going to pay for the dialer? Who's going to buy the CRM? Who's going to take the risk of paying the staff? And you did that with not much money at a $200,000 home sales price, doing two to three deals a month, right?

 

Anthwon Thomas:

Yep.

 

Frank Klesitz:

I'm just curious if you can share with the audience, and probably the discussion you had with your wife, if you were married at that time, how did you emotionally cut back your living expenses to plow the commissions you were earning back into risking it on setting up all these systems and staff?

 

Anthwon Thomas:

That's a great question, Frank. Well, naturally, I'm a very thrifty man. Give me a cardboard box, I'm good. All right. I can live off, I'm very minimal in what I need in my life.

 

Anthwon Thomas:

Now, during the time I was building a business, I was also building a family. So, as I'm closing more deals, we're having more kids. Right? We're having more kids while I'm closing more deals.

 

Frank Klesitz:

So, you're cutting back as you're having kids.

 

Anthwon Thomas:

Exactly.

 

Frank Klesitz:

That doesn't usually work that way, Anthwon.

 

Anthwon Thomas:

I know. So, I will say, this is a great time to shout out my wife. She has been very supportive and understanding. Number one, I had a plan, and I presented it to her, just like I presented to everybody within the company. I have a vision. And I got her to buy into it. So, she understood. So, those trips that we could have taken, or that house we could have bought, we knew that the end game was, we will be able to do that at some point. And she bought into that. So, I had support from her.

 

Anthwon Thomas:

Now, we're able to do some of that stuff. And so, we're in a different position. But it was just her buying in and me having a vision, having a plan of being able to articulate it to her that way.

 

Frank Klesitz:

Last questions on this. Then I want to get back into the more the nuance.

 

Greg Harrelson:

I want to mention something too after that question on this, real quick.

 

Frank Klesitz:

What was the scariest expense, deals maybe not going through, your living commission to commission? Go back to those times. And you sat down with your wife, where you had to write a check. It was the scariest check that you wrote of the risks that you took your capital on. What was it? Go back to those days, man.

 

Anthwon Thomas:

Do it again.

 

Frank Klesitz:

Yeah.

 

Anthwon Thomas:

Yeah. I have support from people who were already doing it at high levels. I knew that in order for me to be great or to do something that is not average, I had to take the risk. I knew that whether I was going to fail or succeed, is still a win for me. Because if I fail, I'm going to learn. And because I got a prospecting mindset, I listened to the people like Greg, Greg, as a mentor. I know that if I write a check and I don't get it back, or something goes wrong, I can work my way out of a problem. I can make a loss into a win.

 

Anthwon Thomas:

I was also blessed to have a wife that had a great job. She's in the health industry. And we were thrifty before getting into real estate because we had to be. We didn't have as much resources, right? So, we were living well below our means anyways. That was really the way it happened. I knew that this is the way I have to do it, because if I'm going to be conservative or take the average route, I'm going to get average results. And I knew to win, I have to be focused and I had to have belief. And then I'm a winner, period. And I'm a competitor.

 

Frank Klesitz:

Here's what I want to say to that, then Greg, you ask your question. Your confidence to write that check and take the risk, was your confidence in your self esteem that you could prospect and replace the lost money?

 

Anthwon Thomas:

Because I was already prospecting.

 

Frank Klesitz:

Yeah.

 

Anthwon Thomas:

I didn't have a rollercoaster of a business because I... I had months where I had 12 closings. There were things happening to where I knew I could always generate, that was never going to go away from me. And I had skillset too. Going back to listen to a hundred podcasts of Greg Harrelson and Frank, when Greg will do role-plays. You have no idea how many times I recorded his role-play and I would take, listening to him, I would write down what he said and make it my own, and then use it and set an appointment. I'm a seeker of knowledge. And I'm a winner. And I knew that from day one.

 

Anthwon Thomas:

One thing about me is even before I sold a single house, I knew I was a bad boy. And so, it's just having that confidence. The way I was raised is what helped me be, get to where I'm at right now, and taking the risk.

 

Greg Harrelson:

Yeah. So Frank, one of the things, it's an observation. I want to make something or share something with the audience for a moment. So, if you're watching this and you're listening to Anthwon, you're likely to come to some sort of opinion that Anthwon's probably not going to be that guy that takes a lot of, that just takes high risk. He's probably not a high risk investor. Probably doesn't make a lot of high risk, do things that take on a lot of high risk.

 

Greg Harrelson:

But Frank asked him about risk. And I typed in my notes here. One of the things that I heard and I gather is that Anthwon minimized his risk by maximizing his learning. He minimized his risk by maximizing his learning.

 

Greg Harrelson:

So, for those are out there that are thinking about making some sort of move, you got to understand this guy is probably not the guy that makes a lot of bold moves a lot of time. He's probably extremely calculated in whatever he purchases and whatever he does. He's just calculated like that. And so, for him to make this bold move, what he did is he maximized learning. He says, "I'm a little obsessed." Right? He says, he's obsessed over it. Well, naturally as a personality style, he might have the tendency to seek external validation and external information prior to him jumping and making decisions.

 

Greg Harrelson:

But I think there's a lot for us to learn. Sometimes if you feel like something is at a higher risk, that's an internal dialogue where what you're really feeling is maybe you need to go learn a little bit more about what you're thinking of doing. It doesn't mean you should, or you shouldn't do it. It just means maybe you need to learn a little bit more, so you can minimize your perceived risk.

 

Greg Harrelson:

And then you talk about your wife and how blessed you are about your wife. You got to understand, your wife might believe in you. Okay? Maybe she does. I'm assuming she does. But you got to understand she witnessed you learning. So, she was sitting and listening to you, "Oh, I'm going to do this. And I might do this." And as some spouses can be a little bit like, that can make them uncertain and a little uncomfortable. But you brought the comfort and the certainty because you were showing how you were committed to actually learning this thing and you are calculated. So, you actually reduce the risk for your entire family.

 

Greg Harrelson:

So, I just wanted to share that observation with people, because there's other people listening that are thinking about, "Gosh, should I do this? Should I take this risk?" And minimize the risk by maximizing your learning.

 

Anthwon Thomas:

Yeah. Let me add one more thing. Learning a lot, I also learned from you, Greg, is that you have to take action. It's one thing to learn everything, but if you're not taking action. So, the name of the game is not, how intelligent you are is, how often you are intelligent. And I knew from learning from you, the intelligent thing to do is to prospect. It doesn't even matter if I know a script or not. I need to at least talk to people. I learned and did the action, easy. You know what I'm saying? I learned a script from Greg, and I'm like, "Okay, well, I'm going to try it tomorrow. It's eight o'clock at night. So, I can't call tonight. But I guarantee you in the morning, I'm going to make this call." Okay. And then that was what I did.

 

Anthwon Thomas:

So, by doing that, being smart in my spending, my own personal habits, having no debt or minimal debt, and then investing wisely. And Greg, has me to a tee. I don't make high risk investments. I am very calculated. I do have a one and three-year goal or plan of where the company is going. I have it all detailed down. I have Excel spreadsheets. I've learned to be analytical and know the data. So, it's all that combined. And then just having this crazy fire within me, seeing a guy like Greg, seeing a guy like, somewhat other mentors out there winning at a high level, knowing that, "Hold up, this is a man just like me. I'm going to make it. I'm going to make it." And then just having that belief and being focused.

 

Frank Klesitz:

I liked how he shared that, because you can't build a team without taking risk. I wanted to ask that question of how you did that to get to this point and learning more about your visit to this interview. It shows your team is down to a spreadsheet of exactly where the money is and how it all goes. Isn't it? I know it is. You're proud of that spreadsheet. Aren't you, Anthwon?

 

Anthwon Thomas:

I can literally screen share and show you what it looks like.

 

Frank Klesitz:

I'm sure.

 

Anthwon Thomas:

I'm not playing.

 

Frank Klesitz:

Yeah. Well, let me go back to the original question, before we went down that path, which is good. I wanted to go there. Your assistant grew to operations manager, buyer's agent. You pay per profile for closing assistance through your broker, which is nice they provide that, and probably provide the supervision and management, right?

 

Anthwon Thomas:

Yes.

 

Frank Klesitz:

You said you brought on a VA, is this probably foreign, what do they do?

 

Anthwon Thomas:

Man, they do a lot of the button clicking, I will say.

 

Frank Klesitz:

Actually VA means virtual assistant.

 

Anthwon Thomas:

Virtual assistant.

 

Frank Klesitz:

Yeah.

 

Anthwon Thomas:

Yeah. So, all of our systems that we use, they all talk to each other. And it requires a lot of button clicking. And my director of operations, she's now graduated into being more of a leader and managing the closing coordinator and the VA, and then also helping with some trainings and stuff here and there on the systems.

 

Frank Klesitz:

Got it.

 

Anthwon Thomas:

So, the VA's main focus now is, once a file goes on a contract, this button needs to be clicked. And we use Trello. I don't know if you have a familiar with Trello. We use Trello for all of our transactions. So, moving files over, inspection, negotiation, time, appraisal, helping sending out this email to the client for client care aspect of the transaction. I mean, they're doing a little bit of everything. We got them, I mean, it's pretty much 40 hours a week that they're moving stuff around and freeing up time for everybody else.

 

Frank Klesitz:

It sounds like they're doing a lot of quality assurance to process 120 deals [inaudible 00:33:14] coordinator.

 

Anthwon Thomas:

Yes. And it allowed our closing coordinator to focus real heavy on client care, the client care aspect, calling the client, making sure that we're delivering on the promise that we set forth for them and providing what we call a Ritz-Carlton experience. It just frees up everybody's time.

 

Anthwon Thomas:

I'm very big on providing the best experience for the client possible, because speaking of Silver Lining Real Estate Group, not to get off the topic, but Silver Lining, the reason why we called Silver Lining Real Estate Group is because when I got into real estate, I realized that we were in a broken industry. There were a lot of agents that weren't providing high level service. The were a lot of clients that I worked with that came from another agent and was unhappy with the service. So, they chose me based on maybe my energy or maybe they heard from, they got a referral. It was a referral from somebody they know, right?

 

Anthwon Thomas:

So, as we're growing this company, I knew that I had to keep that aspect going of giving the best service possible. So, that's why we also built out to support staff and everything, the way it did. And we wanted to be the silver lining in a broken industry. So, we named the company, Silver Lining Real Estate Group, because we want to be the silver lining.

 

Frank Klesitz:

Thanks for sharing that.

 

Anthwon Thomas:

It's all for a purpose. It's all for a cause.

 

Frank Klesitz:

And then you said you have a showing assistant.

 

Anthwon Thomas:

Showing assistant.

 

Frank Klesitz:

Tell me about that conversation. I assume you're meeting with your team and you're talking about the value of time, right?

 

Anthwon Thomas:

Absolutely.

 

Frank Klesitz:

Tell us how that conversation went down, how you made that hire.

 

Anthwon Thomas:

Okay. So, I'm very big on right people in the right seats. Again, we're very prospecting based. If you're an agent, you are focused on doing these four activities. If you're in support, you're focused on doing these activities.

 

Anthwon Thomas:

So, once we see someone who maybe naturally has a talent, where I can put them somewhere else, we have a conversation about it. And we say, "Hey, why don't you try this position?" Because now being a showing assistant, you are now a personal concierge for the client. Meaning, you're always available to sell property. And it freeze up the agent time to prospect more, to generate more. And your personality, your mindset, you are very charismatic. That position requires high energy. It requires a structure of showing a home the right way. This person was great for that, so we decided to move him into the showing assistant role, because we knew the ROI after about six months, we will see a high ROI. And we did.

 

Frank Klesitz:

What are your thoughts on showing assistance, Greg?

 

Greg Harrelson:

Yeah, I think it's excellent. I believe in division of labor and division of tasks. So, I'm a big proponent of that. Right? And so, I think it's a wise way to do it. I mean, you have to be committed. Again, it's a model. It's a model that works, if you're really committed to working it out. I mean, there's plenty of evidence that it works very well. And then there's plenty of great companies and models that don't use. We do not use showing assistance. Our agents are doing that.

 

Greg Harrelson:

Now, in the end from a model, let's just assume that you got one model that does it, one model that doesn't, then that means there's more tasks for the agent that has to do that role, which is showing property. And so, they're typically going to make a little bit better commission, because there's one less person that gets a cut. Then you add a showing assistant, now all of a sudden there's an additional person that has to get a cut out of the transaction. So, usually what you'll see is the agent then gets a little bit lower commission, because they have to do fewer duties, and then someone else has to do of different duties. And so, they get a little bit of that commission or they get a little bit of that number.

 

Greg Harrelson:

So again, it all comes down to, the economics are going to work well. I would say, showing assistants, can hold showing assistants to a higher level of accountability, than you can hold agents to. And I think that's one of the reasons why it's become so popular. It's becoming harder and harder to hold agents accountable.

 

Frank Klesitz:

Insightful. Thanks, Greg. Let's recap. And then I want to go back to get your story of learning the why behind all of this. That'd be the rest of the interview. All right?

 

Anthwon Thomas:

Okay.

 

Frank Klesitz:

Three sales agents, 120 deals a year. How many deals do you personally do, Anthwon?

 

Anthwon Thomas:

Zero.

 

Frank Klesitz:

So, you're totally out?

 

Anthwon Thomas:

Yep.

 

Frank Klesitz:

Good for you, man. Operations manager, who is your first hire? What's her name?

 

Anthwon Thomas:

Amanda Chase.

 

Frank Klesitz:

Amanda. So, Amanda was your key hire and she's been with you since you started.

 

Anthwon Thomas:

She's watching.

 

Frank Klesitz:

Hi, Amanda. Amanda helped hire all the support staff around you, the closing coordinators overseeing all that, the VA to help police, everything tied all together, probably taking care of handling all the showings as well, with the showing assistant, overseeing all that.

 

Anthwon Thomas:

Helped her hold me accountable too.

 

Frank Klesitz:

And hold you accountable too, which allows your three sales agents underneath you, because you're probably their sales manager, leader, coach, guide, to hit their goals, to hold to those minimum standards that I brought here, that showed on the meeting today. And the link again is in the chat for anybody who wants it. I posted that in the chat on YouTube, if you guys would actually see the document. And you're holding them very accountable to speak to 25 people a day.

 

Anthwon Thomas:

Yes.

 

Frank Klesitz:

Right?

 

Anthwon Thomas:

Yeah. Well, we're holding them accountable to their goal, but the minimum is the 25. Yeah. They're being pushed to-

 

Frank Klesitz:

So, you got have a [crosstalk 00:38:49].

 

Anthwon Thomas:

They're not being pushed. They're being reminded of what their goal is every single day, every single day.

 

Frank Klesitz:

So, here's what I want to dive back into, where some learning can take place. So, this taking it face value, it was like, "Oh yeah, that makes sense." And you're like, "Okay, that was a nice interview, guys. Thanks." The reality is, there is like five years of blood, sweat, pain and suffering that led up to this realization. Isn't there?

 

Anthwon Thomas:

Absolutely.

 

Frank Klesitz:

So, What I'd like to do is go back to 2015 when you're doing two to three deals, and tell us some of the mistakes or some of the challenges, maybe the hiring mistakes or positions, organizational structure, different models you've tried that collapsed on you. So others can avoid the same pain and really understand some of the beauty of what you just shared with us.

 

Anthwon Thomas:

Okay. Well, the pain came from... Watching podcasts, there's only so much you can get from a podcast. At some point, you got to actually connect with someone who's doing it at a high level. On a podcast, you're going to get a lot of surface level information, just to be honest.

 

Anthwon Thomas:

I made a connection with Greg, and just from being around him the first time I met him, I learned a lot. But it wasn't even about economics or prospecting, because I've already listened to hundreds of hours of that, how he carried himself as a leader. The pain for me was, I wasn't a good leader at first. I even, also in homes, I didn't lead correctly. So, people didn't want to... For example, my first agent that I brought on, didn't stay with us long. The agent wasn't there for that long, maybe about four months and then gone. It was because I wasn't being a leader. But after I learned and how to carry myself, and how to really apply, and implement, and then put the work in at the same time, that was my pain points, because I had to become a better leader.

 

Anthwon Thomas:

Now, all the other stuff I made sure that I invested in some formal coaching or mentorship. I was very curious and trying to do things the right way from the beginning. So, a lot of that helped, but the pain points was being a bad leader in the beginning. I just wasn't the best leader.

 

Frank Klesitz:

There's a couple of examples of bad leadership that you're like, "Man, I can't believe I did that, knowing what I know now." Or maybe you've thought a certain way or had a behavior, or an attitude a certain way.

 

Anthwon Thomas:

Hey, one of the first ones is you have to walk the talk. Meaning, if we talk about being a prospecting based business, and I'm asking you to come in, and it's a room with just me and you in the room, because we're just starting out and I'm saying, "Go ahead and prospect. I'm going to be over here working on the system." And I'm not prospecting, but I'm working on a system. After awhile, they're going to see that, "They're just telling me to do something. I don't believe in this. I can do this on my own." And they're gone.

 

Anthwon Thomas:

At the same time, what value am I really giving that person? A couple of numbers to call, right? That's what I mean by the lack of leadership. I wasn't actually on the phones with them at some point with that first agent. I've done it prior to that for a couple of years. And it built me up to where I could bring on an agent and give them leads. But at that point, it was, "I got to build out these systems. Me and Amanda, we got to build these systems out." So, the agent they're gone just like that. So, that's what I mean by the lack of leadership.

 

Anthwon Thomas:

I needed to prove myself a little more. I needed to make sure that I was gliding every day. I'm not going to say grind. I was in the glide every day. I was hitting the phones. And I was leading by example. The leaders lead in the front, not the back.

 

Anthwon Thomas:

And then when I started doing that, I put another two to three years then, were people following my lead? I proved myself. I gave more value. I added more support. And then at that point it starts taking off. But that was the pain point. So, it was tough at first because you get attached to that person. And when they leave you, your first one, it's almost like a breakup. It's tough.

 

Frank Klesitz:

It's good. I remember going out to Greg's office years ago, Greg, when I came out. And he has this whole floor of all these desks, where everyone is making calls.

 

Anthwon Thomas:

Yeah.

 

Frank Klesitz:

And I'd figure, Greg often is in his office, just hanging out while everyone's working. And that was certainly not the case. He was in a suit and tie. And his desk was in the dead center of the room. And hand to God, he was speaking louder than everyone else in the room, which I'm like, "What are you doing, dude? You're speaking really loudly in this room and everyone's calling." And I remember I asked him, he was like, "I want them all to hear what I'm saying. And hear the intense conversations that I'm having to lead and inspire them, standing right in the middle." And that was you, Greg, still is.

 

Greg Harrelson:

Yeah. I'm a big believer of leading by example. And I've just been very committed to that. And I still, today, don't have a physical office. If I've got to meet somebody, I actually, I tell them, "Okay, meet me at this office. And then I meet in the conference room." I today, do not have an office. I've been very committed to that. I want to be with agents.

 

Anthwon Thomas:

Yes.

 

Frank Klesitz:

I want to go back. These are good questions. I like, you had to grow as a leader. And what motivated you to do that, the pain point. The title of this interview is, The Optimal Structure for a Small Team. Did you try other structures that didn't work? Other arrangements, other models that you're like, "Nope, burn it down. You've got to go this direction."

 

Anthwon Thomas:

I did. So, I'm not going to throw anybody under the bus, but I did follow a coaching company structure at some point. I was real big into coaching. And there were several different models I could have gone with.

 

Frank Klesitz:

There's a gazillion. Sure.

 

Anthwon Thomas:

Yeah. The ones I chose, I really believed in them. And I've learned a lot. But the one that I tried to structure my team around that type of economic structure, it didn't. I quickly found out that if I do it this way, without having to depend on lenders helping cover costs or without having to depend on, or the market changing. I wanted to have a bulletproof business. So, that type of structure would not work long-term.

 

Frank Klesitz:

It sounds like you were very marketing based and you had to go back to prospecting. Is that right?

 

Anthwon Thomas:

Yeah. And we were paying out too much, way too much, just way too much in commissions. We were paying out way too much. So, we had to get control over that. So, I had to revise everything. I had to sit down and I had to make sure I got the right information. And I took my time.

 

Frank Klesitz:

How did you find that? How did you go through all the podcasts and all the information out there? How did you evaluate what's the right information for you, again, in Indianapolis, at a $200,000 price point? You always got to keep that in mind.

 

Anthwon Thomas:

So, really for me, it was just a spreadsheet. When I was able to play with numbers and see, year one, year three, year 10, will this sustain any market, where I'm currently at right now, how much I'm spending, how much I'm paying out? If the market was a shift today, could I still make it through? I'd plug the numbers into a spreadsheet or into... Just that simple.

 

Anthwon Thomas:

I just didn't know what I didn't know, economically. As far as a business owner, I didn't know what my economic structures should really look like if I ever wanted to exit production or not be heavily reliant on my production. Because yeah, that wasn't the plan, the plan of getting into the business. I knew my outcome, my outcome was to grow a business, and at one point step out of production and just focus all my time into pouring into the people within my organization, helping them live better, healthier, happier, profitable lives. I can't do that if I'm selling homes.

 

Frank Klesitz:

Some people will say that's a risky business, with three people underneath you, where all your income is based on. What do you say to that?

 

Anthwon Thomas:

Well, the reality is, if I need to sell a home today, I can. And that's not to a granddad, it's myself. It's just I am very confident that, listen, Greg has said this before, I role play. I'm in there in the training center with them every day, role playing every single day. I can easily hop on. I can put my headset on and get on mojo or calling a feasible right now, set an appointment. So, if that ever was to happen, I could step back in production if need be.

 

Anthwon Thomas:

However, I am very clear that in order for me to build this out to where we have a strong bench of great players, I need to find more talent and bring more talent in, so we can serve them and help them hit their goals, so recruiting.

 

Frank Klesitz:

A whole other show can be dedicated to answering that question. I'm not going to go down that path, but we certainly could. I want to go back to the economic structure for a team leadership, finding the right model, which is this one of all the different models that are out there. Give me another large lesson you learned building this team from an economic structure, from an organizational structure, or the wrong path you went down, or an attitude, or behavior, or a hire, or a pay, or something, that you learned something from to end up with what you share with us in the first 30 minutes? Anything else you can think of?

 

Anthwon Thomas:

It's always leadership, other than the economic, finding that out. And luckily for me, I found that out before I brought a lot of people in. So, I found that out fairly quickly that, "Hold up now. Let me remove my production. What does it look like without me selling homes? Okay, this isn't going to work." Leadership again, it goes back to leadership.

 

Anthwon Thomas:

You see how I talk, the energy, the passion, I'm all about it. People want to follow someone like that, who's confident, who knows what they're doing, who is, "Hey, I'm going to follow that guy." Right? The reality is when I first got into this business and wanting to be the... I wanted to be who I am right now, five years ago, but I wasn't ready yet. I didn't have the stuff I needed to offer to people for them to look at me and say, "I'm going to follow that guy. I believe in his vision. And I could see my vision fitting into that vision." I didn't have none of that to offer.

 

Anthwon Thomas:

So, it was just strictly growing and continuing to be a seeker of knowledge and applying consistently. And then having accountability for me and my life, who holds me accountable, right? Greg for years held me accountable without knowing it. You see what I'm saying? I feel like every podcast or whatever conversation we would have, he was talking to me. My wife, I had accountability at home.

 

Anthwon Thomas:

At one point, I would have my son write out that he wanted to go to Disney World. And each day I got home, he would ask, "Dad, did you follow or execute on your obligations today?" And if I said no, which I never did, but he would ask me that question. And I'd be, "I'm not going to say no, because I know I'm going to do what I got to do." That's a form of accountability.

 

Anthwon Thomas:

And then I gave Amanda, who is my director of operations authority to hold me accountable, to make sure I'm doing what I got to do. Then being involved with other high level thinkers and have the masterminds and stuff like that. Very simple.

 

Frank Klesitz:

So, there's a couple of key values I want to go through here that I wrote down that I picked up about you. And then I'm going to go over again to answer the question of the optimal structure for your small team that you found. Again, this is going to be at a $200,000 median price point. Three sales agents with minimum standards, that they are around do, they're led by you. You're making calls with them. You're totally out of production. But if you do, do your own production, that's a commission you pay yourself and the rest flows to the bottom line, just like every other agent. So, when you put 40% net, that does not include it in your personal production, is that correct?

 

Anthwon Thomas:

100%. Yep.

 

Frank Klesitz:

That's key. Right?

 

Anthwon Thomas:

Yep.

 

Frank Klesitz:

So, you'd see the true, getting paid for what you own versus what you do.

 

Anthwon Thomas:

Absolutely.

 

Frank Klesitz:

All right then. So, three sales agents, [inaudible 00:52:10] standards, operations manager was your first hire. Closing coordination, pay per closing through your broker. You have a VA holding everything together. And then you have a showing assistant. And that's it.

 

Anthwon Thomas:

Yes.

 

Frank Klesitz:

Correct?

 

Anthwon Thomas:

Can I add in there, if we need it to hire... So, we're gearing up for more support hires.

 

Frank Klesitz:

If there was your next hire, what would that be?

 

Anthwon Thomas:

My next hire is going to be a success coach.

 

Frank Klesitz:

So, that's interesting. A lot of people would say, an ISA.

 

Anthwon Thomas:

We are the ISA.

 

Frank Klesitz:

Greg, you like that, don't you?

 

Greg Harrelson:

Yep.

 

Anthwon Thomas:

So, the reason why a success coach, with me, I want to focus on... Again, the way we have the team structured, we have everything split up. I want to be able to focus on coaching, training, high level conversations about where are we going as a company. A success coach is going to be able to help with the one-on-ones. They'll be able to be in the mix more often with the agents and make sure that... Like a managing broker as well.

 

Frank Klesitz:

You're going to hire full time?

 

Anthwon Thomas:

Well, at first, the person we were going to hire him within the company. They're already within the company.

 

Frank Klesitz:

Got it.

 

Anthwon Thomas:

I ain't going to say the name, but we're already within the company.

 

Frank Klesitz:

So, he's getting promoted.

 

Anthwon Thomas:

So, the goal is to be able to do that, bring them into part-time, and then gradually bring them on full-time. And then bring on the closing coordinator in-house.

 

Anthwon Thomas:

Now, here's the key. As the money, the revenue was increasing, I was stashing more money away in our emergency account, because I knew what was going to happen. I knew were going to just start blowing up and everything is going well. So, I can make these hires today, if I needed to. The key is to make sure that I'm always liquid and I have at least six months saved up. And this is, if I'm going to make the success manager hire today, and their salary is going to be, well say, $50,000, I need to have an additional $50,000 saved. Then I make the hire. So, I'm very conservative, like Greg mentioned.

 

Frank Klesitz:

You're very measured.

 

Anthwon Thomas:

Very measured.

 

Frank Klesitz:

And I mean that like literally, probably on your spreadsheet, right?

 

Anthwon Thomas:

Yes. I'm looking at it right now.

 

Frank Klesitz:

Here's some of the values I take away. You have an incredible ability and motivation to learn by consuming all of the thousands of hours. It sounds like a material that's online on how to sell real estate.

 

Anthwon Thomas:

Yep.

 

Frank Klesitz:

And you've boiled it to this today. That's the takeaway, we want you to be watching from this. He boiled it down to what he shared today of his economic structure, how his team works. You're very prospecting based. And that brings you lots of certainty, if you make a wrong decision, doesn't it?

 

Anthwon Thomas:

Yep.

 

Frank Klesitz:

You also have your spreadsheet. It was interesting how you had to find the right model for you. You got really good Excel of analyzing what everyone's telling you to separate what's right and what's wrong for you.

 

Anthwon Thomas:

Yes.

 

Frank Klesitz:

All right. Coming to your wife with a plan for lower risk, very measured and living below your means. That's [inaudible 00:55:33] team.

 

Anthwon Thomas:

And providing great service to our clients, which gives us more referrals, which actually decreases our overhead.

 

Frank Klesitz:

Yeah. Greg, what questions do you have for him? What else? And then we'll take some questions from the audience.

 

Greg Harrelson:

Yeah. It's just more of an observation than it is a question. I think you did a good job asking some questions. But one of the things that I hope the audience understands is the authenticity that you just listened to. One thing I can appreciate is the amount of authenticity that he has demonstrated today.

 

Frank Klesitz:

I feel that.

 

Greg Harrelson:

I believe if we went to his office, we would see no discrepancy between what he represented and what we would see. And I also just want to just remind everybody that everything you need, you have available to you. Anthwon was not the resource. Anthwon was resourceful. And that put him in the position that he's in right now. And it's going to take him to even higher levels. So, those are the things that I just wanted to share as an observation to the audience. It's not about being the resource. It's about being resourceful. He went to podcast. He connected. He went to events. We saw each other at an event one time, and you connected with me, and that was being resourceful.

 

Frank Klesitz:

Anthwon, we have a viewer here by the name of Sarah. I'm going to read what she said here, but this is you speaking to yourself six years ago, watching it, Keeping it Real. Are you ready?

 

Anthwon Thomas:

Yes.

 

Frank Klesitz:

She says, "I've been wanting to start a team for awhile, but I've only since 2000, September 19th..." So, as of 2019, September, she's only closed 45 deals. "How do you know if I should start a team or should I stay solo? I see more potential for growing with a team, but at what point are you ready to be a team leader?"

 

Anthwon Thomas:

I would first ask her, why does she want to be a team leader? Because being a team leader or starting a team, you learn quickly that in the beginning, you're selling homes. You have to again, get the economic structure where it needs to be. So, you have to be a seeker of knowledge. You've got to probably pay money to learn some things. So, you've got to invest in yourself, which we all should be doing. Then you got to be able to be a managing broker. You got to answer questions. You got to be able to prospect every day. You got to lead by example. You got to grow mentally. It's hard. It really is. It becomes easier the more you do it, because it's just your new way of living.

 

Anthwon Thomas:

I will say, why do you want to be a team leader first? And then two, as an agent, very simple, economic structure. As an agent, you wanted to make a hire, let's say your first hire, an admin. 30% of what's your top line is, 30% of it should go to overhead. That includes your salaries, okay? The other, and that's all you got to worry about because it's just you. But if you want to bring on agents too, that's going to be your cost of sales. You can only pay no more than 40% out to your broker and your agents. So, now you're at 70%.

 

Anthwon Thomas:

And going back to the 30% overhead, you should not be spending more than 15%. That's at the very top, 15% for any type of support. For one admin, you probably want to keep that down to, I'm paying 15% for multiple people. So, you just got to look at and your market for an assistant, for an admin, how much do they typically get paid, and then go from there. But you're also got to be producing at a high level too.

 

Frank Klesitz:

Anthwon, I got to say something. You said something very important. 40% to agents and broker.

 

Anthwon Thomas:

Yes.

 

Frank Klesitz:

And broker.

 

Anthwon Thomas:

Yep.

 

Frank Klesitz:

Got it. Which leaves 30% or 40%, if you're good to you. All right.

 

Anthwon Thomas:

And for her, if she's selling on her own, she'll probably close it to 30% cost of sales, if she's selling on her own.

 

Greg Harrelson:

And another thing, let me mention this speaking to that that person that asked the question. My word of advice would be this, the economics should not determine whether or not you go solo or you build a team. The economics should not determine that. What should determine that is your heart.

 

Greg Harrelson:

For me, I'm passionate about developing talent. I'm passionate about sharing and coaching. And if I was just solo agent, I don't think I would survive emotionally because my passion for contributing, for helping would not be fulfilled. And in the end, the economics wouldn't be what makes me happy. It's following that passion that's going to make me happy.

 

Greg Harrelson:

And so, we got to be very clear, not on what's the fastest way to make the most money, because when you start, when you're on pursuit and you're chasing the most money, before you catch the most money, you're going to wake up and realize you're chasing the wrong thing. A

 

Greg Harrelson:

nd so, if you're thinking, "Solo agent or team, when I'm I ready?" I would sit back and I would sit down, and Anthwon asked the question. He says, "Why do you want to have a team?" That's the perfect question. Why do you want to have... So, Anthwon, can I ask you just real quick to demonstrate, why do you want to have a team, Anthwon?

 

Anthwon Thomas:

The reason why Anthwon wants to have a team is because I get joy in serving people and helping people. In order for me to extend my help, for selfish reasons, make myself feel good that I can help other people, then I need to grow an organization that helps a multitude of people, more people than I can help individually. And that's the reason why I grow a team.

 

Greg Harrelson:

Got it. Okay. So good. So, me and you like to argue about sports. And I'm right, Jordan and Kobe are way better than LeBron. I had to get that out.

 

Anthwon Thomas:

Oh men.

 

Greg Harrelson:

But I bet you, you probably are more interested in team sports. If you going to be a participant in sport, you're probably more inspired by participating on a team, versus participating in things like a marathon.

 

Anthwon Thomas:

Yep.

 

Greg Harrelson:

Okay. So, you look at marathon runners, a lot of times, they're the type of people that don't like to build teams. You look at people that are building teams, you look at them, and they tend to lean towards more of teams on sports, because they like that connection and whatnot. So, all I'm trying to share with the listeners out there, is if you're trying to figure out where do you want to be, don't let the economics actually be at the forefront of that decision. Actually, let your passion in your heart, take precedence and be the priority in that decision. And then what you'll find is, no matter which decision you make, if you're bringing passion to that decision, the economics will magically appear. You do not choose it based on economics. You choose it based on passion. And then it's because you chose passion, that economics actually show up for you.

 

Anthwon Thomas:

Absolutely.

 

Frank Klesitz:

Anthwon, thanks for doing this. We interviewed you to bring you on the show. Anthwon, you told me, "Man, I watched a lot of episodes. No one really explained the economic structure."

 

Anthwon Thomas:

Right.

 

Frank Klesitz:

Hopefully, you gave some people some good solid insights today of something unique out there that you're not normally going to find. The people who really are going to run a good business will pay attention to this episode, that will remain profitable.

 

Anthwon Thomas:

Absolutely.

 

Frank Klesitz:

The ones that maybe go off on some shiny object, new lead gen thing, maybe not so much, which we'll get probably more people to watch. This one is very important.

 

Anthwon Thomas:

Absolutely.

 

Frank Klesitz:

So Anthwon, thank you very much for your time today. I'll let you go. And I'm going to do some overtime with Greg, here afterwards. So, thank you so much.

 

Anthwon Thomas:

Thanks. It was pleasure. Thank you, guys. I appreciate you, guys.

 

Greg Harrelson:

Nice connecting, buddy.

 

Anthwon Thomas:

Take care.

 

Frank Klesitz:

Thanks, Anthwon. Bye. Well, that was good.

 

Greg Harrelson:

Cool guy. Huh?

 

Frank Klesitz:

Cool guy.

 

Greg Harrelson:

Yeah.

 

Frank Klesitz:

Yeah. I could sense the authenticity so much. I mean, I usually, it's so funny, man, when you find just good business owners, this is a very unique skill set. He has enough drive to move forward and build something with restrain, [inaudible 01:04:47] measured.

 

Greg Harrelson:

Yes, with restrain. Yeah.

 

Frank Klesitz:

With restrain, measured. He has enough high extroversion to get on the phones and prospect every single day.

 

Greg Harrelson:

I don't know if you know because I don't, do you know what he did before real estate? I never asked him.

 

Frank Klesitz:

I know. That's a good question.

 

Greg Harrelson:

I know. I wish I would have asked him.

 

Frank Klesitz:

It could be interesting.

 

Greg Harrelson:

That discipline that he has on the economic side and the analytical side, that discipline sound to be a little bit more polished. It's not like he just attained those skills.

 

Frank Klesitz:

That was like an investment manager or something like that, that would probably end up going out and bringing in the accounts. And then he also has the analytical side, as opposed to dealing with text messages and calls, and the constant chaos. And he's like, sit down and write a plan, and know how to use Excel and read a spreadsheet, and look at financial projections of where he needs to be, a very measured. Let alone the emotional control of, "Man, I just got a hit of a commission. Let's go spend it."

 

Greg Harrelson:

Yeah.

 

Frank Klesitz:

Right? Especially married with kids. Being able to not spend money and live below your means when you're building a family, which was like the hardest time. Trust me, I know, I have a five and a six year old.

 

Greg Harrelson:

When I first met him, I met him, he may have told you, Jeff Cohn had an event in Omaha years ago.

 

Frank Klesitz:

Oh yeah, the team building.

 

Greg Harrelson:

And he invited me to come in and speak. So, I went in and spoke for a moment, and hung out for a couple of days. And that's where I met Anthwon. And we met after one of the little cocktail parties and we just connected. It was me and him, Kevin Mills. And then he had one of his new team members at that time. And that's a team member that's still with him.

 

Frank Klesitz:

Got it.

 

Greg Harrelson:

And so, he was already traveling with one of his first team members, and trying to help them also learn. But the questions that he was asking me, I knew that this guy, he cared about this team member.

 

Greg Harrelson:

And so, I think what I was trying to convey to somebody, to the audience about what should you be looking at in deciding, "Should I go? When's the right time to do a team? Or should I go solo?" It's like, is that where your heart is? Because you will be successful, if you follow your heart. I promise you that is the success.

 

Greg Harrelson:

Most of the people that are really successful, they're actually doing something they enjoy to do, that they enjoy doing. And most people that are successful and not enjoying what they're doing, you see them stop doing what they're doing, and then they end up changing.

 

Frank Klesitz:

Greg, how does someone learn to enjoy prospecting?

 

Greg Harrelson:

So, here's the key, man-

 

Frank Klesitz:

Heck of a question, isn't it?

 

Greg Harrelson:

Yeah. It's very easy. It's just understand that, it's the right question, but it's the wrong question. See, prospecting is a doing. And so, no one really enjoys any doing. So, you could say, how does somebody enjoy digging ditches? That seems like the followup to that is because obvious, no one would like to dig a ditch. Right? Well, wrong. If I asked you, "Can you meet me in Africa to dig this ditch, that's only five feet deep, 20 feet long. It's going to take us all week, but we're going to save 157 infant children, because we're going to connect them to water." You're going to be happy with every dig of that shovel. You're going to be passionate about digging that ditch.

 

Greg Harrelson:

But I said, "Can you help me dig the ditch? I got a water problem in my backyard." You're going to be like, "Greg, kiss off. You got enough money to go hire somebody to dig that ditch for you. Why are you calling me to come dig that ditch?" Right? Because there's no meaning to digging that ditch.

 

Greg Harrelson:

See, the wrong question is, how do you enjoy prospect? How do you enjoy digging a ditch? You don't enjoy either one. That's the doing. It's who you're being inside of the doing that you enjoy. And so, who I'm being when I'm digging this ditch, saving 152 infants from dying every year, as I'm being a person of contribution, I'm being a person that's having an impact. That's who I'm being, the doing part. I don't give a about the blisters, who cares? Those are like badge of honor, those blisters. Same thing goes with everything else. Prospecting as a doing, who am I being? My being as this, I am committed to empowering the consumer with information that will help them make responsible financial decisions, whether that decision is buying, selling, doing neither, I'm detached from the outcome. The result, my job is to empower the consumer with information, to help them make good financial decisions. That's my being. I got a duty to go empower lots of people today. That's my being.

 

Greg Harrelson:

Who gives a damn what the doing is? Whether it's digging the ditch or whether it's prospecting, or it's anything in between, it's insignificant. For everything that you can think of that you do, that you think is that you don't enjoy, somebody else in life is doing the same thing and experiencing joy. That can't exist, if it was about the doing. That can only exist, if it's about the being. It was an easy question, it's just a deep answer.

 

Frank Klesitz:

You might be one of the best people in the United States to answer that question. And you got the answer. That is a hell of an answer. Thank you, Greg. Everyone here thanks you for that one.

 

Greg Harrelson:

Yeah, that was cool. That was fun.

 

Frank Klesitz:

That was very good.

 

Greg Harrelson:

Thanks for allowing me to share that.

 

Frank Klesitz:

I allowed you, man. That was good. That was really good.

 

Greg Harrelson:

So, what did you take from Anthwon? I mean, if somebody was in a beginning stage of doing something like him, what's the one thing you would take from him and say, "You know what? I was talking with this guy, Anthwon, and he shared something, I thought I'd want to share it to you." Is there anything that you can think of that you would share? I'm sure there's more than... There's a few things.

 

Frank Klesitz:

I can relate to my own experience. He's like, "Look, I got to be talking to people. I got to be on the phones. I have to be meeting people. I'm going to hire you. And I'm still going to go beyond the phones. I'm still going to go talk to people. I'm going to still go do all these things."

 

Frank Klesitz:

I think my personal takeaway through his entire story is the drum beat or the calls, or the constant commitment to making the context, so to speak, of talking to people. And again, I know there was a question about what's a contact. I mean, everyone has different definitions. My definition is the person responded by an email. The person responded to a text. A conversation was started with a decision maker. And I'm really so much concerned with the media, whether it was a phone or something else.

 

Greg Harrelson:

Yeah. And I think that by the way, not to interrupt, because I don't want to take you off path, but I think that's becoming a more common or more acceptable answer by the way.

 

Frank Klesitz:

Yeah. I mean, we send lots of appointments through texts. Do I really discount those aren't in contacts?

 

Greg Harrelson:

Don't discount them. I think it's more relevant now because of just the way the habits, the patterns of consumers.

 

Frank Klesitz:

But I think it's very easy to hire somebody or commit to marketing, commit to support staff. And then, you think that for you not to continue doing all the things that maybe you didn't enjoy making the calls and doing more calls, here's just someone that was constantly committed to constantly, always bringing in business to make sure the income stream was there for the fixed costs that you're taking on.

 

Frank Klesitz:

And I think if there was probably, I don't know this, but it was interesting to me that through his first five or six years, he never said that he took the drum beat off of that. I was expecting one of the mistakes was, "We stopped our commitment to prospecting." I didn't hear that.

 

Greg Harrelson:

Yeah.

 

Frank Klesitz:

I see that very common, where it's like, "You know what? Maybe I can let up on this prospect and things are going easy. I'm going to go do all marketing job, do all the business." You know what I mean?

 

Greg Harrelson:

Yeah.

 

Frank Klesitz:

And that's possible, but you have to be at really high levels of production to be able to do billboards and radio, and television, where it ultimately ends up... I think I could probably count maybe five people on my hand, 10 people that do that at a high level around the United States, who were in a very small group, when you're spending 20, 30, 40 grand a month on ads to keep the machine going where it's not prospecting based. Right?

 

Greg Harrelson:

Yeah.

 

Frank Klesitz:

That was my takeaway. He never took the pulse off of the context, ever.

 

Greg Harrelson:

Yeah. One of the things that I think I would share is-

 

Frank Klesitz:

And he never hired any ISAs.

 

Greg Harrelson:

Yeah.

 

Frank Klesitz:

He never hired anyone to do the calls for the agents. Did he?

 

Greg Harrelson:

Nope.

 

Frank Klesitz:

No.

 

Greg Harrelson:

It's because he's the coach, because he's a coach. So, as a coach, he's coaching, he's having them develop their own skills, he's holding them accountable and whatnot. And that's why we need ISAs in our industry. And ISA by the way, is a position that was developed by default, not by design. The ISA originated as a position. That position originated because of somebody not doing what they were supposed to do. It wasn't an innovation. That's not what ISA is. And ISA was, team leaders were losing so much money because they were feeding agents at such a high level when it comes to feeding them so many leads that the agent started cherry picking, fallen off on follow-up, and therefore now they got a less ROI on their lead spin. So, we need to get an ISA. That's why ISA exist.

 

Greg Harrelson:

So, what he's doing is he's recognizing the challenges within an organization that if they appear, require an ISA, and then he's coaching into those challenges, and he's making sure that people are being held accountable and they have the skill sets to do what originally they needed to be done. Because the ISA does it make more money for a company because the ISA is converting at a higher level. The ISA makes money for the team because it's reducing the lossage. ISA is reduction of losses.

 

Frank Klesitz:

Yeah.

 

Greg Harrelson:

And so, therefore everyone's going to say, "Oh yeah, but my conversion is so much higher." Well, it's so much higher from a much lower level than it should have been because the agents weren't doing what they were supposed to be doing. So when we say, "Oh, well, conversion is really good because of the ISA." Well, yes, but you have an ISA because the conversion was really bad because of the agent. So, all we're doing is getting back up. We're not necessarily making that much more money off that, we're actually getting to where we're supposed to. But agents and teams right now, they're looking at the lower level, and they're trying to find solutions.

 

Greg Harrelson:

And in today's market where the market's really good, it's actually probably more important to have things like ISAs, because agents, they get a little bit more complacent because the market is hot.

 

Greg Harrelson:

Now, in a cold market, when the market drops, if we have a crash, I'll just make this prediction, that there'll be a lot less ISAs. Because the agents are going to be like, "I need to focus on myself. I need to get focused again." And then the teams will be like, "Well, if you're focused again, I don't have anything for the ISA to do." And they'll start canceling out the ISAs.

 

Frank Klesitz:

I want to ask you a question on splits. We all know that you can go to 100% shop and pay a transaction fee. And then from there, you can probably go to the newer brokers, new brokerages out there, that's 80/20 with a cap. Or you can go with, maybe something like Keller Williams or now has done at 70/30 with the cap, right? Or you join a team that is traditionally, probably around like a 50/50 split. And some teams even charge more than that. Or they're only paying the agent 40% or 30%, I've heard. Some agents, especially the ones that are spending money on lots of marketing are paying 10%, but they're making up in volume.

 

Greg Harrelson:

Yeah. Right.

 

Frank Klesitz:

So, the commission question always comes up, but it's just such a mute point because they are all over the place, depending upon the person's needs and their goals, what they want in life. Here's my question to you. How do you handle the commission discussion when you go over the commission splits to the agents that want to join you?

 

Greg Harrelson:

So, and you're right. This is just such a-

 

Frank Klesitz:

It's never ending. What's the best serial armor?

 

Greg Harrelson:

It's never ending. But if we step back for a minute and just think about business, okay? The commission conversations is one of the biggest scams in our industry. Okay? Because at the end of the day, no matter what commission model you're under, there's only going to be a certain amount of money that flows to an agent.

 

Greg Harrelson:

So, let's just assume for a moment, well, I'm going to use a number 70/30. Okay? I'm using my number 70/30, 30 goes to, let's just say, there's a company out there that they have a, the 70 goes to the agent and 30 goes to the company. Okay? And then for that 30, the company offers some leads, some CRM, some marketing services. And let's just say a closing coordinator and listing coordinator. Okay? Then what they got, then that person, they go start talking to a hundred percent company. That's just a transaction fee. And just because you're under their umbrella. Right? So, then that person, now, they get it, let's say the transaction fees equivalent to 5%, so now the agent gets 95. The brokerage gets 5%.

 

Greg Harrelson:

The other model is agent gets 70. Brokerage gets 30. So, it seems like 95 is better than 70. Well, the difference is, as 95 goes to the agent, 5%... Actually, 95 doesn't go to the agent. 5% goes to the brokerage. But out of the 95, then that person has got to go and give another five to the CRM. And then they got to go give another five to the coaching company. And then they got to give another five to this assistance.

 

Greg Harrelson:

Next thing, here's what's going to happen, Mike Ferry taught us this all the time. He says, guess what? The person at the a hundred percent company is going to only receive 70% of the commission because five is going to go to the brokerage. Five is going to go for the CRM. Five is going to go for the marketing. Five is going to go for the assistant. And then all of a sudden you're going to have six people cutting in and getting five, five, five. And the agent is still left with 70. But the agent feels like they're getting 95.

 

Greg Harrelson:

And so, what they're fixated on is not how much they end up as net. They get fixed on how much they're paying a broker. But when they look at how much they're preying on a broker, versus the conversation, "How much am I really taking home?" The number is not really different. It doesn't matter if you're at a cap company or this company, or that company, or that company. I mean, just about every, these cap companies that offer say these nice CRMs, how many of the agents actually use it? They end up and going and getting their own CRM.

 

Greg Harrelson:

And so, commissions need to be about what is the net, not what's going to a broker. What is the net? And real business people will end up finding out that they're probably got maximum, going to only keep 70%, no matter what. I've had companies like the a hundred percent companies, right? That are, say, trying to recruit my agents. Or maybe somebody is trying to decide, do they come to me or do they go to this a hundred percent company? And then when we actually broke down and they gave me all the expenses they're responsible for, they actually were going to net less money out a hundred percent company than they would net at my company.

 

Frank Klesitz:

It all comes down to, can you help the person or give the person enough volume and consistent business to make up for a lower split? And then also, who's going to shoulder the risk of the fixed cost? Does the agent want to take it on?

 

Greg Harrelson:

Yeah. It's volume, risk. And then, there's another one is freedom of time.

 

Frank Klesitz:

Yeah.

 

Greg Harrelson:

Yeah. So, it's time, money and risk.

 

Frank Klesitz:

Well, Greg, that was a good show that I am glad we did that.

 

Greg Harrelson:

That was fun.

 

Frank Klesitz:

That was fun.

 

Greg Harrelson:

Great guest.

 

Frank Klesitz:

Yeah, great guest. I want to thank you all for attending. Go to keepingitreal.com. Subscribe to the show. You can like us here on the YouTube channel on the Real Geeks. Facebook page, go put your email address in it, Keeping it Real. As you can see, the kids are here. It's time to go. And we'll see you in two more weeks. Greg, thank you. And thank you from here.

 

Greg Harrelson:

Good job, buddy.