LPT’s Robert Palmer on agent choice and growth of the national single-entity brokerage

HousingWire

This week on RealTrending, Tracey Velt sits down in person with Robert Palmer, founder and CEO of LPT Realty, at LPT’s studio in Orlando.   Robert talks about LPT’s journey from a simple marketing tool to a top brokerage in just a couple of years. He also discusses agent empowerment through dual brokerage models, LPT’s upcoming initiatives, and growth plans.   Here’s a glimpse of what you’ll learn:   LPT’s transition from a marketing tool to a brokerage was driven by a desire to support agents.  Self-funding allows for greater control and prioritization of agents' needs.  The brokerage model should empower local agents to make decisions about mortgage and title services.  Navigating industry challenges requires a commitment to agent choice and autonomy.  Understanding and balancing both business logic and technology for successful software development.  LPT’s growth strategies include expanding training programs and launching a luxury brand.   Related to this episode:   LPT Realty | RealTrends Verified  https://www.realtrends.com/brokerage-profile/lpt-realty-orlando-fl/  LPT Realty's Robert Palmer is building a 'brokerage for life’ | HousingWire  https://www.housingwire.com/articles/lpt-realtys-robert-palmer-is-building-a-brokerage-for-life/  lpt realty  https://www.lpt.com/     Enjoy the episode!     The RealTrending podcast features conversations with the brightest minds in real estate. Every Monday, brokerage leaders, top agents, team leaders, and industry experts join us to share their secrets to success, trends, and the lessons they’ve learned. Hosted by Tracey Velt and produced by the HousingWire Content Studio.

Transcript

00:00Welcome to the Real Trending Podcast. Today, I am talking to Robert Palmer. He is the founder

00:06of LPT Realty. Yeah, this is exciting. It's a home game for me. So interestingly enough,

00:11we live pretty close to each other and so able to come in and use our studio here at LPT. So

00:16I'm excited to join you here on your podcast from our studio. Pretty fun.

00:20I sat in today on the LPT Realty Motivational Monday session. So that was really fun.

00:27Got to learn a lot. A lot of great energy here. So thanks for inviting me.

00:31It's been fun. You know, we've been doing the Motivation Monday basically since we started

00:34the brokerage maybe four or five months in. So a little over two years now. I haven't missed a

00:39single one, neither has my co-host. No matter where we are, we log in every Monday. So every

00:43agent at LPT knows that Monday mornings at 11 Eastern, they're going to get updates on the

00:47market, updates on the brokerage from myself and our EVP, Matt Hodge. And that's our studio here.

00:51Matt's picture is actually on the wall behind you there. You're in his seat. If anyone's wondering,

00:55you know, who that person is behind Tracy. But yeah, really excited and glad you got to sit in

01:00and see that. I think it's become a really important part of our culture and who we are.

01:03You know, being a cloud brokerage, the fact that, you know, probably about a third of our agents log

01:07in every Monday and watch the live Motivation Monday. And we have agents that have watch parties

01:12at their houses or at their local offices. It's just become a really, really interesting part of

01:16our culture and this uniting thing across the brokerage. Yeah, definitely necessary in today's

01:21market for sure. Um, so I want to talk because I remember when I was at Florida real term magazine,

01:28getting a box, a box called listing power tools. And that box has now turned into a brokerage.

01:36Um, you also have RP funding, which is completely separate. And I do want to talk about that later

01:41because I think it's kind of a novel idea in the industry. Um, but tell me how that evolution came

01:47from this marketing box, um, to a brokerage. Yeah. You know, I, I tell me like I'm, I'm a

01:52marketing guy. Like I, I didn't have the success I had because I was the best mortgage guy. I was

01:56the best marketer, you know, and I spent a lot of money, reinvested a lot of profits on TV

02:00advertising. And I always did a lot of direct mail and print marketing. And I was always a big believer

02:04in building that brand through print. And so I think the, the genesis for listing power tools was

02:08I had a lot of friends that were real estate agents. You know, we were adjacent to the real estate

02:12market through my mortgage company. And so we wanted to launch something to help agents be better

02:17marketers. You know, I, I had a good friend who was an agent who was almost exclusively buyers and

02:22I was trying to help him break into listings. And that was a big part of the box. The idea was

02:26an agent who's maybe trying to break into listings who isn't that known farming, you know, number one

02:32brand agent who sells the most houses in the neighborhood. How do we give them an unfair

02:35advantage to show up and win the listing? And, and that's really where the power pack came from.

02:40And what we found is if an agent goes in and overwhelms the seller with this amazing marketing,

02:44with this print collateral, these tangible things they can see and touch and feel all of a sudden

02:48they would win more of those listings up against that kind of incumbent listing agent. And that was

02:53the, the genesis for the product and had a lot of success with it. We grew it, you know, we sold it

02:57as a subscription product and then agents would, would buy the boxes from us. And I think one day I just

03:02kind of realized that I didn't love that relationship. I didn't love the idea that the agent who needed

03:07listing power tools the most was also the agent who maybe couldn't afford the monthly fee, you know,

03:12or the agent who couldn't afford to buy the boxes because it really was about helping the little

03:16guy when helping an agent break into listings. And so I think that the real idea of saying, Hey,

03:20if we become the brokerage, we don't have to charge those monthly fees anymore. We don't have

03:25to charge, you know, for the box anymore. We're just going to win when they win. And I really love

03:30the way that relationship felt. And for me, that was the, the whole concept of saying, all right,

03:33we're basically going to wind down this really successful software as a service company,

03:37and then relaunch it as a brokerage so that we can have a more unified relationship with our agents,

03:43our clients. Yeah. And that was three years ago, you started brokerage and now you are number 10

03:48by transaction sides and 14 by volume on the real trends verified brokerage rankings. So

03:53congratulations. Yeah. It's, it's been a wild ride. You know, we, we sat down and we, we actually

03:57made that a goal. We were like, Hey, can we be top 10 in three years? And I think at the time there

04:02was a lot of skepticism around that. I mean, maybe I didn't even fully believe it. You know,

04:05you look at how long it took most brokerages to break into the top 10, how long it takes most

04:09brokerages to scale to the size we've been able to do. And, but that three-year mark was really

04:14something we thought was, was reasonable, thought we could achieve it. And I would tell you by about

04:18March of last year, I knew we were going to do it, you know, because again, the way the growth

04:21works, you see the growth coming, the transaction counts kind of lag the agent count. And so as much

04:27as a year ago, I knew like, all right, we're going to, maybe we'll be 11, but we're going to be 10 or 11.

04:31And it started to feel real. And then it was just like, I don't know, this big moment of like

04:36anxiety leading up to the final announcement. I'm like, man, as much as I will be proud of us,

04:40if we're number 11, it's not 10, you know, we want to be in the top 10. And so when, when the real

04:44trends came out and we were number 10 by transaction count, it was just this really, I think, great

04:49validation of the value we're bringing to our agents, the additional productivity that LPT agents

04:54are experiencing because of the tools, because of the culture, because of things like motivation Monday.

04:58And so I'm very thankful for you guys for putting that out. So we can kind of see that so we can

05:02have that benchmark and understand where we fall in the industry.

05:05Yeah, I will say that it took EXP and Compass both seven years to get to number one.

05:11Okay.

05:12So that's your, that's your, you got to beat that, right?

05:14Yeah, absolutely.

05:16Now that's seven years from when you guys started tracking them, right? That's not seven years.

05:19You're right. It is seven. Well, I'm trying to think, I think it might've been seven years

05:24from Compass's founding. Okay. Gotcha. Yeah. We're have to get, I got to know where the,

05:28I got to know where the goal line is. Yeah. I'll let you know. I have to check on that

05:31because I'm not actually sure. Okay. Um, but I do want to talk about one thing, um, that I think

05:36is pretty rare in today's brokerage world is that you're self-funded. Um, you know, I mean,

05:41that obviously used to be the way it went with Remax and even Keller at the, you know, until recently.

05:48Right. Um, but that doesn't generally happen in today's brokerage world. So tell me a little

05:54bit about that decision, why you chose that. Um, and you know, I know that you're looking at an

06:00IPO this year. So talk to me a little bit about that too. Yeah. I think really it was the, the

06:04commitment, you know, like I believe, you know, like why do you take outside capital one? I had

06:08the financial wherewithal from my success, you know, and other businesses to be able to fund the

06:12company. And then beyond that, I believed in it. And I really wanted to retain the control so that I

06:17can make sure that I wake up every day, putting our agents first, making sure that, you know,

06:20while we are going to have this IPO in the next 12 months, um, that we're putting our agents first,

06:24you know, I'll retain a majority shareholder and control the company and self-funding it through

06:29the early days is the best way to do that. You know, the earlier you take capital, the more

06:32diluted you are, the more control you lose. And so by my commitment to being willing to self-fund

06:37the company all the way through. And again, if you look at the amount of growth we've had

06:40doing that without outside capital, without any private equity money, without wall street money,

06:44you know, most of the other brokerages were either already public when they hit the size

06:48that we've now hit or haven't hit the scale at all. Uh, but I just, I think one, I believe in

06:52two, I believe in our agents. I believe in our agents. They're the only other shareholders

06:55alongside me. I've had people offer me lots of money and try to buy into LPT. And as it sits

07:00today, the only way to be a shareholder is to be me who cooked this whole thing up or to be one of

07:04our agents who's earning shares through production, through attracting other agents to the

07:07brokerage. And again, we're on this amazing path to, you know, when you look at the size and

07:11scale, we're already larger than most other brokerages when they had their IPOs. You know,

07:16you look at, you know, real and exp both went public through either reverse merger or pink

07:20sheets, you know, real did it in Canada. Exp did it with a failed mining company under the pink

07:25sheets. They were much smaller than us. Both those companies started trading publicly at some

07:29around a thousand agents, 1500 agents. Then by the time they were our size, they had already

07:33uplisted to NASDAQ. And so our goal is just go straight for the big exchange from day one.

07:38We're looking at both New York Stock Exchange and NASDAQ, but to be able to have that,

07:42what I would call blue chip IPO, where we go public at the right size in order to put some

07:46capital on the balance sheet and really position ourselves with investors for that next leg of

07:50growth. Yeah. And I think that the one thing we talked about in a previous interview is just

07:56scaling and plateauing. You have a huge ramp forward, obviously, but a lot of brokerages get to

08:05that plateau and they just don't grow anymore. And you had some ideas around that. And so I wanted

08:12to talk to you about, you know, how do you feel like you're going to sustain the growth and keep

08:20growing? Yeah. So I think one of the interesting things is, you know, the only market that we've

08:23been open in for all three years is Florida. And we started in Stellar. And so if you look right

08:27now, depending on which report you use, we're either number one or just under number one in aging

08:32count for Stellar. There's months where we're right there in top two or three in production. Again,

08:36production lags a little bit. It takes agents time to get into production. New construction deals they

08:40wrote a year ago are still going under their own brokerage, old brokers. They haven't come to us

08:44yet. But the fact that we've been able to break in and hit that scale in just three years in Florida,

08:49and then if you look at Florida as a whole, you know, we're in the top two or three by overall

08:52aging count already. And so we've been able to prove that our model can go deep. It gets dense in

08:58markets. You know, it's one thing to say, hey, you reach 15,000 agents across 50 states. That's not a

09:03lot of agents per state, but we've been able to achieve very rapid growth and continue to scale

09:08deeply in Florida. And so we expect that to continue in other markets. What I realized as I

09:13looked at the brokerage landscape is it's not that brokerages stop growing because they stop

09:17attracting. It's because their attrition, the number of agents they're losing every month equals the

09:21new agents joining. And that's where growth stops. It's not like all of a sudden people wake up and

09:25stop joining an EXP or whoever it is. It's that there's more agents leaving than are joining.

09:30And that's when you see agent count come down year over year. And so we studied and said, well,

09:34why do agents leave? Right? Where do agents go? Why are they leaving brokerages? And a lot of the

09:39reason we found is, is that that brokerages model no longer fits that agent's definition of success.

09:44And that's a phrase I use a lot. I know I use a lot with you on the last podcast. This idea of

09:48individual definition of success is something I believe in as an entrepreneur. It's something we're

09:52deeply committed to impacting and supporting for our agents. And then that comes into the second

09:58concept with agent choice, letting agents choose. And so the idea at LPT is we have these different

10:03models that are built for agents at different arcs in their career. If you're interested in being a

10:08solo agent and you have no interest in attracting others to the brokerage, you don't want to be a team

10:13leader, you can get better economics. Other agents who do want to attract other agents, build an

10:17organization, build a team, have a branch office, be a mentor, they can have a different set of

10:22economics. And the cool thing is that agents can make a choice between those two. And now we're

10:26adding our third choice, which is Aperture, our standalone luxury brand, which is even another

10:31set of economics. But really, if you give agents the way to stay with you, to be that brokerage for

10:36life, to succeed and realize their definition of success through different seasons of their business,

10:42through different seasons of their life, then you can stop that attrition. You can slow that

10:45attrition down. And that's how the brokers can continue to grow.

10:49And what's the breakdown of agents as far as choosing which model they want?

10:54Yeah. So the interesting, I guess, kind of caveat in there is team members. And so if you look at it

10:59at any brokerage, you know, you look at an EXP, a team member can get a discounted cap. At Keller

11:04Williams, a team member can get a discounted cap. And so when we look at it, we lump the team members

11:09and their team leaders together into that one set of economics, even though they're on different caps.

11:13And it's about 50-50. So about 50% of the brokerage is either agents who have chosen to be on that,

11:19what we call a brokerage partner plan, where they can earn money from other agents, either being on

11:24a team with them, attract them into their organization, or those are their team members.

11:28And then the other half of the brokerage is the solo agent who is taking advantage of our 100% plan

11:33with our $5,000 cap. And that's pretty much how it breaks down.

11:36Okay. That's interesting. The other thing I wanted to talk to you about, which I think is

11:40fascinating because you own and still own a mortgage company, is that you don't believe

11:46first that single entity brokerages should be involved in mortgage or title. And that has been

11:53the rallying call for brokers for years. Like to be more profitable, you have to be in these mortgage,

11:59either joint ventures or owned mortgage or title. So tell me why you feel that way and how it's part

12:08of your strategy. Yeah, I think it's one of the big moves as you've seen this new class of brokerage

12:13come along. Again, this single entity national brokerage, this is your compasses, right? There's

12:17no franchises. Compass owns the brokerage in every state they're licensed in. EXP and real are the

12:23same. EXP owns the brokerage in every state and every country that they're licensed in. And I think

12:27that that dynamic shift is really what moved that ability to impact or even the right, in my opinion,

12:33impact mortgage and title away from the brokerage and then back to the local team leader, the local

12:38agents who are actually boots on the ground. Now, if you go look at the more legacy models,

12:42the Keller Williams local franchise owner, they absolutely have to monetize mortgage and title

12:47to make it work. The local Berkshire Hathaway office, the local Caldwell banker office,

12:52the legacy franchises, because you have so much infrastructure and expense locked into this small

12:57geographic area, right? Like I own this one franchise. I have a few hundred agents. I have

13:02to have a leader, a recruiter. I have to have accounting people. I have to have trainers.

13:07It's very inefficient. And that's why the brokerage side struggles to make money. And then they're able

13:12to make that up through mortgage and title. And look, and because they're in their local market,

13:15they know who the best local mortgage guy is. They can build a relationship. They know who the best

13:19local title rep and title company is. They can build that relationship. Once you elevate to the cloud,

13:24once you go to that single entity brokerage, like a compass, an eXp, a real, an LPT, one,

13:30you now have the scale to actually earn profit on the brokerage side. You're not locked into this,

13:35this old model where you have too much overhead locked into one little market. If we need to drive

13:40more revenue, we open more states. We expand into new markets. The fact that at scale, I believe we

13:45can have 150,000 agents on a single brokerage platform. You do not need to monetize mortgage and

13:50title to make those economics work. And beyond that, I don't think you can succeed at

13:54monetizing mortgage and title because you're no longer in that local market. I don't know who

14:00the best mortgage person is in Arkansas. I don't know who the best mortgage person is in New York.

14:04I don't know who the best mortgage person is in San Antonio, Texas. That's not my decision to make.

14:08It's not LPT's decision to make. And then what you see happen a lot of times is we would try to cut a

14:14deal or our competitors would try to cut a deal with a national mortgage lender. Well, no national

14:18mortgage lender is the best for their agents in every market. There are certain markets where this lender is

14:22great and that lender is great. And so I believe strongly that the economics and the decision and

14:27the control of those relationships should live at the local level. And in the national entity

14:31ecosystem, the local level is the agents and the team leaders, the people who want to have their

14:36own little branch offices, the mentors. And so we are staying out of any type of monetization

14:40at that national scale level of mortgage and title so we can let the local entrepreneur make the right

14:45choice for their business. And honestly, I think it's been a big part of our success and growth.

14:49Agents know that they're not coming here and they're going to worry about competing with

14:53our in-house lender. And it's funny because most people thought that was the whole reason I created

14:57LPT. Like that was the initial narrative. Oh, Robert's launching this real estate brokerage just

15:01so he can steal everybody's mortgages, whatever. And I guess I was prepared for that because we'd

15:05already made the decision to completely firewall the two companies. I've pivoted RP funding my mortgage

15:10company completely to refinancing and servicing so that we're not even competing in the purchase space

15:15with the agents, local preferred lenders. But I think it's a big part of the success.

15:19The entrepreneur who's drawn to LPT is the same entrepreneur who knows the best mortgage and title

15:25person in their market. And they don't want to feel like we're here to step on their toes.

15:28The idea that a national brokerage would offer incentives to try to take mortgage or title

15:33clients away from their agents, local lenders and providers is something I think always upset me

15:38as a mortgage guy coming up. Like I knew back in the day when I was the great mortgage guy in that

15:42market. I tell a story once I drove an hour to get a water sample for a well test so we could close

15:47an FHA loan on time. No national call center guy is doing that. And I want our agents to partner with

15:53that person, that loan officer. And that means we have to stay out of the way.

15:57Yeah, it's really interesting. Really, the story is the growth of the single entity national brokerage.

16:02Honestly, I mean, if you look at the growth, I mean, you know, obviously, when you add franchises

16:09in with Keller, I think they're still the largest. But it is interesting that some of the newer

16:17entrants into the rankings are the single entry. Not always cloud based either. I mean, Compass has,

16:24you know, offices and you do have some offices, right?

16:28We have a lot, you know, our team leaders go out and start their own offices. It's interesting,

16:31you know, we launched as, and I guess when I use cloud, it's more the corporate infrastructure

16:34is cloud, right? The compliance is in the cloud. And if you look at Compass, it's similar. Every

16:39Compass office doesn't have a full accounting team and a full disbursement team. A lot of those

16:44services have been elevated to a corporate headquarters or a cloud level or whatever you

16:48want to call it, so that the offices we do have function more as just sales offices, right? They're not

16:53cutting commission checks. They're not checking file compliance. It's about meeting with customers and

16:58agent trainings and things. But I think when you look at scale, the power we have to disrupt. The power

17:04that we have is these single entity brokerages, the services we can provide for agents, the technology

17:10deals that we can negotiate, the scale we can bring really is unstoppable. And I think you're going to

17:15see a wider and wider gap between the commission splits, the technology offerings, the support

17:21offerings, education offerings at the legacy franchise brokerages, and the single entity brokerages.

17:27And we're going to continue to pull further and further away, because the bigger we get, the more scale we

17:31have, the more we can do for our agents, and the harder it is for those legacy franchise brokerages to keep

17:36up.

17:36Yeah, absolutely. I want to get into like this big industry issue right from now, which is the delayed

17:42marketing option. And obviously, you've got people on both sides and Zillow and came out with, you know, their

17:49rules and that you can't publicly market without being in their, their ecosystem. And then homes.com

17:57recently said the opposite. They don't believe they don't agree with Zillow. Where do you stand on the

18:02whole clear cooperation and delayed marketing and private listing network?

18:07Yeah, I think for me, it really comes down to this, this commitment to agent choice. Like I have a lot of

18:12faith in our entrepreneurs, a lot of faith in our agents, and I want them to make that decision, just like I want

18:16them to choose the right mortgage and title guy in their market, even though I'm a mortgage guy, I want

18:20them to make their own choices. And so I think on one hand, you know, I'm supportive of Zillow, if they

18:25want to choose not to display those listings, you know, and but I think at the same time, too, and I

18:30think this was a smart piece of their policy is they're not saying agents can't do it. They're just

18:34saying, hey, if you choose to do this, we're not going to, to display your listing. And I think I'm supportive

18:39of that overall, because it allows the agent to make the choice, you know, the, the consumer chose the

18:44agent to hire, like we all start with the consumer, and the consumer chose the agent that they trust,

18:48they believe, and they believe is the best person to market their home. And now that agent has a

18:52choice to make, are they going to choose to pre market the home and then not be eligible for

18:57Zillow and potentially lose that audience. And that's going to weigh into agents decision making.

19:01And maybe some say, you know what, for this situation, I will, this is a high net worth individual,

19:05this is someone who wants privacy. You know, I think at the end of the day, the power to make that

19:09choice should lie with the individual agent who the seller selected. And so this is one of those

19:15situations where I'm going to say, LPT is not going to go out there and try to dictate to our

19:18agents, you know, we're not going to tell our agents, hey, we're going to make this choice for

19:22you. I believe this is something that is very agent specific, market specific, agent seller

19:27relationship specific. And so again, while I support Zillow on their policy, it's not something we would

19:32try to then force upon all of our agents across the LPT ecosystem, we want to let them make that right

19:38choice for themselves and their client. Yeah, I mean, it really is to kind of a luxury property,

19:45you know, generally are the ones who want to do the private listings.

19:49Yeah, I do. I do think one comment I'll kind of make on this, I do see a fight happening where

19:54people who represent very different markets, right to your point, like, yeah, yes, the agents who are

19:58primarily in luxury, they're representing properties that are over two, three, four or 5 million high net worth

20:03individuals, people who have a different idea around that, are taking one stance, and then folks

20:09that are selling the median home price, you know, are taking a different stance. And so again, I think

20:13that's where it really comes down to each agent's choice, each agent's decision with their consumer

20:19on how they're going to market their property. And because what I do love is like Zillow didn't come

20:22out and say, hey, we're going to ban that agent for life. If they do this, they're saying, hey, that

20:26particular property will now be ineligible to go on Zillow. And I think that was a, I think that's an

20:31okay way to do it, because you're letting the agent choose on a case by case basis. If the stance

20:36was, we're going to make every agent do this, or we're going to throw them off of Zillow, that would

20:40be a different policy that would probably have an issue with. But I'm supportive of the approach to

20:44say, look, you make the choice. But if you make that choice, we're going to then choose to not show

20:48your property. And I think that's, I think that's how entrepreneurship works. Yeah, definitely. And as an

20:54entrepreneur, this is a question I ask in every podcast. Obviously, you've had multiple aha moments

21:00throughout your careers in different companies. But what was the biggest aha moment that really

21:06stood out to you that caused you to maybe pause and shift gears and do something big?

21:13Yeah. So while we were designing, so we made this decision all the way back in like 2018 or 19 that,

21:19hey, we were going to start to sunset listing power tools. We never closed it. We just stopped signing

21:23new agents up. We stopped promoting it and kind of let the attrition actually run off. We stopped

21:27innovating, stopped bringing out new products because we knew at some point in the future,

21:31we wanted to become a brokerage. We didn't know exactly when that was. And so as the pandemic hit

21:35and the boom hit, the idea was, all right, when rates go up and the punch bowl gets taken away by

21:40the Fed, we know there's going to be a lot of pain in the industry. That's the right time to launch.

21:44And so the timetable started to come into focus. And then the idea was, well, what's the model going to

21:49be? And so we knew we wanted to be a brokerage. We knew we wanted to give listing power tools to our

21:53agents for free. We knew we wanted to win when they win, not have monthly fees. Like there were

21:57some core things that we knew, but then the big decision was there's two fast growing models,

22:03the a hundred percent model and the rev share model. And, and while the rev share model is easier

22:07to see because EXP is single entity, real is single entity, the a hundred percent is a little harder to

22:12see because it's a lot of mom and pops. There's a lot of a hundred percent brokerages across the

22:16country that have 800, 600, a thousand agents. And so we did this big data project where we added them

22:22all together as best we could. And we realized they were actually growing faster during that period

22:27of time than even the fast growing recognized rev share brokerages were. And so for months we were

22:33back and forth between the two, you know, on one hand, it's like, well, the, the agent who wants to

22:37build a team who wants to attract and build a downline and have an organization that entrepreneur is drawn

22:42over here. And then agents who are really focused on their craft, they want to put as much money in

22:46their pocket as they can per, per closing they're drawn over here. And you don't see a lot of teams

22:51at a hundred percent brokerages. And you don't see a lot of the agents who are doing the less

22:55production at this type of brokerage. And I was back and forth. Like we were literally back and

22:59forth, back and forth. We had both models built. And then the aha moment was let's do both. Like,

23:04I remember I woke up, I called Matt, my chief strategy officer. I'm like, get over here. I figured

23:08it out. We're going to do both. And he has no idea what I'm talking about. You know, he comes over to

23:12the house and I'm like, look, I figured out like, this is how the two models can fit together

23:16and create harmony. And we, we let them choose and they can move up and they can move down. And

23:20these agents make rev share on those agents, but those agents don't make rev share on other agents.

23:24And it was really a big breakthrough. And I think that moment really set LPT up for everything we've

23:29been able to accomplish since then. So in, you know, I, I've been doing this for a long time

23:35and I'm not going to tell you how long, but it's been a long time. And I, you know, I remember when

23:40Zillow came to market, I remember when that the, you know, tech was the biggest differentiator

23:45for brokers. Um, it's table stakes now. I mean, it really has not, it's not, it offers value

23:52obviously, but it's not the value that brings agents generally to a brokerage. Um, but it's

23:58also very expensive and you're self-funded, but you also, I think produced your, you know, built

24:05your own platform. So tell me a little bit about that and kind of the trial and error

24:11that went into it or what, um, what did you learn doing that?

24:15Yeah. So one of the things that happened early in my career is early in the mortgage days,

24:19there was a piece of software I needed. We were doing this niche type of lending and I

24:23needed a piece of software and I got a quote to build and I couldn't afford it. And so I

24:26actually taught myself how to write code. I went down to books a million back in the day.

24:29This is, I'm dating myself, right? Like back when there were bookstores and I went to the

24:33bookstore to buy books, Amazon wasn't a thing yet. And I bought every book on coding at my

24:37local books a million and locked myself up in the house for a week and read them and then

24:42wrote the piece of software. And I fell in love with coding through that process. And for

24:45me, it's, it's like this hobby that relaxes me. So mortgage, real estate title, everything

24:50that your subscriber base is in is chaotic, right? We can do everything right. You do everything

24:55right. And something goes wrong. You know, the sellers get divorced the day before closing,

25:00the buyer buys a new car, the whatever happens, right? So a medical collection pops up on their

25:05credit report at the last minute. We did everything right, but something went wrong. And so for

25:09me personally, the ability to write code was, was like soothing. Like it brought order to

25:13the chaos. I would have these days at the mortgage company where we did everything right. And it

25:16just seemed like everything went wrong. And then I would go write a thousand lines of code.

25:20And when I hit go, if I did it correctly, it would do it right every single time. And it was

25:25just something, something balancing about that, something meditative about that.

25:28And so I wrote code and wrote more code and wrote more software. And it was a big part

25:33of the strength of the mortgage company was a lot of that software I wrote and I got good

25:36at it. You know, I didn't go to college for it. I always had imposter syndrome, never thought

25:40I was good enough, whatever, but I got really good at it over decades. And so when we went

25:43to launch LPT, you know, built the software, I wrote the alpha version. I've got a dev team

25:48that comes in behind me and then helps take it to production. But the interesting thing

25:51is the cost to build software has come down dramatically. I mean, you look at the technologies

25:55that are out there, like we use Vue on the front end, you know, the backend frameworks that have

26:00been built. All of these things have really made it easier to build software. But where the big

26:04disconnect comes is the business logic not getting translated properly over into the software.

26:11And so because I can understand both and I can sit down with the dev team and as we're coding,

26:15we're making changes. Wait, if it does this, that'll be better for the agent. Let's make it do that.

26:19And so I think that that ability to understand the business logic and the code was a big part of us

26:25being able to do it at a much lower cost. We also had all of the development we'd done for listing

26:29power tools. A lot of that technology, particularly on the marketing side, was able to just plug right

26:33in. But the cost to build software have come down dramatically. But I think a lot of brokerages

26:39are missing it. They're almost being taken advantage of by their dev teams or by their third-party

26:43development companies because there's such a disconnect between the business logic and the final product

26:47that they just end up wasting a lot of money. And we've been able to bypass that here and get a

26:52great product in the hands of our agents very quickly at a cost that didn't break the bank.

26:56Well, it helps that you learned coding. So my last question is just what is your growth strategy?

27:04What is your plan moving forward to take you to that next level?

27:08Yeah, so we've got three big things coming out this year. You are Ascend University, which is the

27:13launch you witnessed here today, which is our goal is to be the number one training brokerage

27:17in the country. Last year, Training Magazine recognized us in the top 100. We want to be

27:22the number one brokerage in the country for training. We actually are sitting here in a

27:25former ITT Tech campus that we've converted to what we call our Ascend University. We're going to

27:30have a thousand live events for Ascend this year available to agents at any brokerage on top of

27:35the education we do inside of LPT Realty. We think that's a critical part of where we're going.

27:40We're launching our luxury brand, Aputure. That's a big part of where we're going.

27:44Aputure is a standalone luxury brand. So if you think on the LPT side, it's agent centric,

27:48it's agent first. Agent can take our logo and turn it whatever color they want. There's

27:52camouflaged versions of the LPT logo out there and hot pinks and yellows. And we really think of that

27:57as the period at the end of the agent's brand or the team brand. And then they have complete

28:01control over the branding within state guidelines. Aputure is for agents who want that more brokerage

28:07brand. They want brand guidelines. They want to know that the Aputure agent in Denver's marketing

28:12looks similar to the Aputure agent in Miami and in New York. And so we really see it playing more

28:17in the higher end luxury market. Aputure is focused on competing with the Compass's and the Sotheby's

28:22and the Christie's. You know, it's interesting when we look at the market, Compass is number one by

28:26volume. The XP is number one by transaction count. You don't see a lot of agents moving between the two.

28:31And so instead of banging our head against a wall and saying, well, why can't we get all these

28:34Compass agents to come to LPT or these Sotheby's agents to come to LPT, the way we've seen other

28:38cloud brokerages try. We're launching this second brand, Aputure, which is built to squarely compete

28:43with the Compass's and the Sotheby's and the Christie's and give that brand feel and give those

28:48production requirements for agents to be a part of the brand and really focus on that higher end

28:53market. So, you know, Michael Valdez joined us. That's a big part of his focus. We're launching Aputure

28:57globally, which has never been done before. Single entity luxury brokerage launching globally.

29:02And then finally, we have a product called Leads Connect coming out. Again, I built my mortgage

29:07business by going on TV and radio and reinvesting profits and driving opportunities. We want to do

29:12that for our agents at LPT as well. And so we have this Leads Connect program that's going to

29:16be launching later this year as well. And then beyond that, we just continue to show up every

29:20day. We execute at a high level. We make sure our agents have a great experience. We make sure our

29:24tools continue to help them close that extra two, three deals a year that can make a difference

29:29in their personal P&L. We continue to respect their agent choice. We continue to support their

29:34individual definition of success. And I'm excited about the future.

29:37Yeah. And if you're in the Florida market, if you haven't seen an RP funding commercial,

29:41then I don't know where you've been. So that's for sure. Well, Robert, thanks so much for joining

29:47the podcast today. Congratulations on all your success.

29:50Thank you, Tracy.

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