It could open more doors for your investing business. Just ask Angie and Dan Francis of Stepstone Realty.
For many residential real estate investors, it’s still not the typical way of doing business. But if you want to power up your operations, you need to seriously consider becoming a licensed real estate agent, according to Angie and Dan Francis, the owners of Texas-based StepStone Realty.
Being both an investor and an agent simply opens up a wider range of ways to make money, said the Francises, who operate StepStone as an investor-friendly “virtual” brokerage in six cities. They actively recruit real estate investors to become agents.
As an agent-investor, if you find a distressed seller who needs to make a deal soon, you can explore short sales and other creative strategies that might be foreign territory for a typical agent who only does retail sales.
Or if the seller has plenty of equity and no real hurry, you can treat the property as a traditional listing.
“We can provide any option that a seller wants,” Angie Francis said. “We’re not trying to put them in a certain box to fit our needs.”
A Home for Investors With Licenses
Too many investors are focused on screening out sellers who don’t clearly fit their model. They don’t sit down with those folks—and miss opportunities to help the sellers and make a profit in the process.
“We just focus on getting a meeting and talking face to face with the seller,” said Dan Francis. “Then we can tell what kind of deal can be done.”
Dan has been an investor about 12 years. Angie pursued her agent’s license about 10 years ago and, two years later, became a broker.
She originally got involved in the business at Dan’s encouragement. He loved being self-employed, and he knew there were opportunities for a broker who knew how to put together investor-style deals. After she was laid off from her job in a medical office, Angie decided to take the leap.
“That was probably the best thing that happened to me,” she said.
Unlike a broker who starts in the world of retail real estate, Angie isn’t uncomfortable with creative deals. Her very first, in fact, was a short sale.
Though they’ve been in business as StepStone several years, the Francises only started actively recruiting agent-investors under the virtual brokerage model about a year and a half ago.
Back then, StepStone had four agents. Today, there are more than 80 in six Texas markets: Dallas-Fort Worth, Houston, San Antonio, Austin, Corpus Christi and Abilene. The brokerage is now among the top 1 percent of the largest Texas brokerages, by head count.
StepStone Realty serves as a sponsoring broker and provides a suite of services, including MojoVest, a proprietary customer relationship management (CRM) software solution, and organizes pooled marketing efforts to reach distressed homeowners in cities like San Antonio and Austin.
The brokerage receives 30 percent of an agent’s commission until the agent has closed $2.5 million in transactions. After that, StepStone switches over to a $500 flat fee per transaction, in perpetuity.
The Francises’ network includes agent-investors with a mix of backgrounds, ages, ethnicities and experience levels. But they’re all independent, self-starting entrepreneurs who don’t want a traditional 9-to-5 job.
Some of the agents are longtime investors who’ve just recently acquired a license. Some are complete newbies, while others are longtime real estate agents who had an itch to invest, but didn’t have the freedom to do so under their previous broker.
“A lot of brokers don’t want their agents doing the creative side of real estate,” Dan said. “We’ve created a home for the investors who have their license.”
A Community That Works
Angie and Dan have been married about 21 years, and they have a son who’s in college. The couple first met during a party at Baylor University in Texas. Dan had moved there to work on his graduate degree, and she grew up in Waco. One day, they both ended up at the same get-together for debaters (both of them debated in school) and hit it off.
She remembers how, years after they were married, Dan started bringing home books about real estate and investing from the library. He was determined to build a real estate investing business.
Looking back, “I did it all the wrong ways, is what I like to tell people,” he said.
Practically everything he knew about real estate came from a book. So he didn’t have any experienced mentors of whom he could ask questions. As a result, his early deals involved a lot of trial and error, much of it slow and painful, he said.
That is why he’s so proud of StepStone’s community. He and Angie frequently coach individual agents through deals, and the brokerage regularly hosts mastermind sessions where everyone can get together and talk about problems, leads, industry trends and marketing efforts as well as pitch deals.
StepStone also operates a members-only Facebook page where agents can pass along leads on potential deals. Unlike on many other wholesaling forums, everyone is conscientious about sharing information that as accurate as possible. Nobody wants to waste anyone else’s time.
“This is a community that’s really supportive of each other,” Dan Francis said.
Despite StepStone’s rapid growth, the Francises are still home-based, in Austin. As Dan notes, they “home out of their office.”
Right now, being an investor in Austin can be challenging, he said. There’s tremendous demand for homes—something like 160 people move to the metro on an average day. Inventory is limited.
But StepStone’s network makes it easier for everyone involved to find opportunities, whether that’s in Austin or cities like San Antonio, Dallas or Houston, where it’s not as difficult to locate distressed sellers.
Long term, “we want to be the biggest investment brokerage in Texas,” Angie Francis said.
They’re on their way. And, while there might still be some resistance from investors about becoming real estate agents, more and more people are coming around to the concept.
“I love when I convince an investor to get his license,” Dan said. “They almost always resist at first. But what they don’t realize is how easy it is, how little time it takes and how much it can help.”
For example, younger sellers today are more skeptical of dealing with investors, and being licensed as a real estate agent confers greater credibility.
“What I tell every investor is talk to me before you decide not to get your license. Because I will always win that argument.”