Challenges of Building a Real Estate Team

1. What is the main challenge and common mistake people make when building a real estate team?

According to Christian Stubbs, a significant challenge in building a real estate team is ensuring profitability. A common mistake is for team leaders to fund their team's losses with their personal production, essentially using their individual sales income to cover the team's expenses.

This often leads to unprofitability and ultimately the implosion of the team. Many team leaders focus on "starting a team" rather than understanding that they are starting a "business" that requires knowledge of profit and loss, and margins.

2. How did Christian Stubbs initially approach building his team, and what did he learn from it?

Initially, Christian Stubbs and his partner built their team by observing what larger teams were doing and attempting to replicate their models, including changing splits and covering expenses.

They attracted agents primarily looking for leads and handholding, leading to a lack of standards and, eventually, an unprofitable business. This experience taught him the importance of having a clear business model, defining standards, and attracting agents who align with those standards, rather than simply acquiring as many agents as possible.

3. How did Christian Stubbs improve the profitability and culture of his team?

Stubbs and his team analyzed the characteristics of their successful agents and identified a key metric: activity tracking within their CRM (Follow Up Boss) using a point system.

They implemented minimum standards based on this point system, clearly communicating these expectations to all agents. This led to a significant "self-selection" process where agents unwilling to meet the standards chose to leave. This focused the team on productive agents and allowed them to recruit new agents who understood and embraced these minimum standards from the outset, raising the overall bar and improving culture.

4. What is the philosophy behind Christian Stubbs' content creation strategy for his real estate business?

Christian Stubbs believes in a multi-brand content strategy. He has separated his brand, focused on attracting agents, from the team's consumer-facing brand (Onyx Homes). He also has a separate brand for potential coaching/educational content (Start to Finish).

For the past two years, he has focused primarily on agent attraction content, recognizing that a team's core business is recruiting, training, and retaining salespeople. He emphasizes the importance of cohesive messaging across all touchpoints, from initial content consumption to onboarding and ongoing team communication.

5. How does Christian Stubbs approach content creation efficiently across multiple platforms and audiences?

Stubbs has a systematic approach to content creation. On Mondays, he writes multiple newsletters (consumer-facing, agent-facing, team leader) and scripts for videos and podcasts. On Tuesdays, he films the video content.

This initial written content serves as the foundation for various repurposed content formats, including long-form social media posts, blog posts, and short-form videos for platforms like Instagram. He has built a media team to assist with production and editing, allowing him to produce a significant volume of content consistently.

6. How does Christian Stubbs view the role of personality profiling (like DISC) in hiring real estate agents and W2 employees?

While Christian Stubbs previously considered personality profiling in hiring agents, he now places less emphasis on it. He has found that predicting an agent's success based solely on a profile is difficult, as some seemingly unsuited individuals thrive while others with high potential do not engage in the necessary work.

For W2 employees, however, he believes personality profiling is much more valuable in ensuring a good fit for specific roles and team dynamics.

7. What are Christian Stubbs' recommendations for traditional team splits and profit margins?

Based on his experience, Christian Stubbs suggests that for a traditional team model aiming for a 30% profit margin, splits should be structured differently than a simple 50/50.

He recommends a split of around 35% to the agent on listings and 45% to the agent on buyers, regardless of the lead source. He argues that traditional 50/50 splits on team deals often result in the agent making more money on the team's leads than the team leader, making profitability challenging.

8. What are the different financial models Christian Stubbs identifies for real estate businesses, and which does he recommend for different goals?

Christian Stubbs outlines four potential financial models for real estate businesses:

1. Rainmaker with Production Partners: This involves a lead agent handling the majority of the business and having licensed partners assist with tasks for a small percentage (7-15%). This model offers high profit margins (around 70%) and control and is recommended for those prioritizing profit and control over building a large team.
2. Traditional Team: This model focuses on achieving a healthy profit margin (around 30%) with carefully structured splits that favor the team leader on team-generated leads.
3. Team Lead with Tiered Splits: This model, which Stubbs' team uses, involves agents earning higher splits on self-generated deals (80%) and lower splits on team-generated deals (50%). This model requires higher revenue to achieve the same profit as a higher-margin model.
4. Traditional Brokerage: A more expansive model with agents operating more independently under a brokerage umbrella.

Stubbs stresses that choosing the financial model upfront is crucial as it dictates all subsequent business decisions, including agent offerings and growth strategies. He advocates for prioritizing profitability and understanding the core business of recruiting, training, and retaining sales talent, regardless of the chosen model.