Some models focus on hiring only experienced, producing agents. Of course, those are the hardest agents to get…and sometimes the most difficult to manage. Other offices fire off buckshot and eat what they kill, meaning they’ll hire anyone that contribute in some way to the bottom line. I have to agree with Rob, capping agents are not hard to recruit and can be some great additions to an office.

My model is completely different. I don’t hire any agents, and I farm out the leads I can’t handle. The math just got easier. The math is also impossible for competing companies to measure since the information just isn’t trackable since the sales are not attributed to my office on the MLS.

We’re in the people business. Any model will work if we love our peeps!

Oh, and sorry about the no gravitar thing. I have several to fit my multiple personalities, so I just couldn’t settle on one.

Some models focus on hiring only experienced, producing agents. Of course, those are the hardest agents to get…and sometimes the most difficult to manage. Other offices fire off buckshot and eat what they kill, meaning they’ll hire anyone that contribute in some way to the bottom line. I have to agree with Rob, capping agents are not hard to recruit and can be some great additions to an office.

My model is completely different. I don’t hire any agents, and I farm out the leads I can’t handle. The math just got easier. The math is also impossible for competing companies to measure since the information just isn’t trackable since the sales are not attributed to my office on the MLS.

We’re in the people business. Any model will work if we love our peeps!

Oh, and sorry about the no gravitar thing. I have several to fit my multiple personalities, so I just couldn’t settle on one.

My average price is $225k and I don’t seem to have any problem capping. I realize there are a lot of part time people, they are the half and quarter cappers.

One of the keys that k-dub has is the ability to have a team. We have a fee structure that can work for a rain maker as well as the co-agent.

As for pyramid, it is profit sharing. The owner of my office does not have many agents in my market in his front line. Yes it is multi-level, but again based on profit. Also the books are closed monthly.

We have 250 agents and we are growing to 350 at my office, there are two other market centers in my county of 1.2 million people, about 40% under the age of 18. So it can be done, you have to have a model that the agents want and offer it at a reasonable price.

My average price is $225k and I don’t seem to have any problem capping. I realize there are a lot of part time people, they are the half and quarter cappers.

One of the keys that k-dub has is the ability to have a team. We have a fee structure that can work for a rain maker as well as the co-agent.

As for pyramid, it is profit sharing. The owner of my office does not have many agents in my market in his front line. Yes it is multi-level, but again based on profit. Also the books are closed monthly.

We have 250 agents and we are growing to 350 at my office, there are two other market centers in my county of 1.2 million people, about 40% under the age of 18. So it can be done, you have to have a model that the agents want and offer it at a reasonable price.

I know that some of the owners are at the top point of the pyramid for their profit-sharing system, so they are making a chunk of money through that route, but it still doesn’t seem to make sense. They are definitely growing fast in our area, as RE/MAX continues to shrink, but I can’t figure where it’s all heading if their agents aren’t really doing much business.

I know that some of the owners are at the top point of the pyramid for their profit-sharing system, so they are making a chunk of money through that route, but it still doesn’t seem to make sense. They are definitely growing fast in our area, as RE/MAX continues to shrink, but I can’t figure where it’s all heading if their agents aren’t really doing much business.

I will dig in for you.

One of the things is not to saturate the region to where the owners are not profitable.

It is your agent count and mix. First take your annual expenses and divide it by your cap. Then you know how many capping agents you need and the rest are profit.

That is the basic model, now some expenses can be geographical i.e. rent. For example if the your annual expenses are $1,000,000 and your cap is $20,000, you would have to have 50 capping agents then ideally you would have 50 half cappers and 50 1/4 cappers that would give the owner(s) a $750,000 profit.

Also one of the things that most people miss with k-dub is the owners are usually not that active in the shop. My owner lives in AZ and I am in UT. My team leader runs the show and our principal broker is a staff member.

So if an owner invest a few hundred k and gets a $300-500,000 or more return a year not a bad investment.

With that kind of passive income an owner can venture out into other revenue streams…

Then there is the $3,000 royalty and I believe the owners might get a piece of that I am not sure.

That is the concept behind profit share, share a piece of the owners profit for bringing talent and agents will keep brining talent. The cool part a capper at $20,000 and the commission of r discussion is 3% is only a $2.2 million in volume, so capping agents are not that hard to recruit in fact they are easier then a mega agent. Somebody with 25 listings and 6-8 pending, that is a logistical nightmare.

I hope that helps

I will dig in for you.

One of the things is not to saturate the region to where the owners are not profitable.

It is your agent count and mix. First take your annual expenses and divide it by your cap. Then you know how many capping agents you need and the rest are profit.

That is the basic model, now some expenses can be geographical i.e. rent. For example if the your annual expenses are $1,000,000 and your cap is $20,000, you would have to have 50 capping agents then ideally you would have 50 half cappers and 50 1/4 cappers that would give the owner(s) a $750,000 profit.

Also one of the things that most people miss with k-dub is the owners are usually not that active in the shop. My owner lives in AZ and I am in UT. My team leader runs the show and our principal broker is a staff member.

So if an owner invest a few hundred k and gets a $300-500,000 or more return a year not a bad investment.

With that kind of passive income an owner can venture out into other revenue streams…

Then there is the $3,000 royalty and I believe the owners might get a piece of that I am not sure.

That is the concept behind profit share, share a piece of the owners profit for bringing talent and agents will keep brining talent. The cool part a capper at $20,000 and the commission of r discussion is 3% is only a $2.2 million in volume, so capping agents are not that hard to recruit in fact they are easier then a mega agent. Somebody with 25 listings and 6-8 pending, that is a logistical nightmare.

I hope that helps

A question I have, Rob, is that as I’ve said in the past, the K-Dub model seems like a no-brainer for the agent. What about for the broker/owner? Do you have any stats on what the profit margin is for the typical K-Dub broker, or are you willing to share your numbers?

It may be that I’m really missing something, but it doesn’t look to me that the K-Dub broker (not the agent, or the ALC, or whatever, but the broker/owner) is making all that much money, nor does it appear as if the brokerage has the margins to be competitive in the long run. (This assumes competent management across all the models, of course, as opposed to a smart operator in a K-Dub competing with a moron at some other model. )

-rsh

A question I have, Rob, is that as I’ve said in the past, the K-Dub model seems like a no-brainer for the agent. What about for the broker/owner? Do you have any stats on what the profit margin is for the typical K-Dub broker, or are you willing to share your numbers?

It may be that I’m really missing something, but it doesn’t look to me that the K-Dub broker (not the agent, or the ALC, or whatever, but the broker/owner) is making all that much money, nor does it appear as if the brokerage has the margins to be competitive in the long run. (This assumes competent management across all the models, of course, as opposed to a smart operator in a K-Dub competing with a moron at some other model. )

-rsh