Luke Acree has interviewed more than 50 real estate team leaders for an upcoming book on how teams grow and scale.
On a recent episode of the Stay Paid Podcast, he and co-host Josh Stike reviewed some of his top takeaways from these interviews.
One of those takeaways has to do with a common assumption that the leader is the top earner. Luke’s interviews show the reverse often holds true. It’s not unusual for the leader of a 20-agent team to find they’re earning less than they did as solo producers.
Here’s one clue as to why: leaders tend to re-invest revenue into the business, so less of it shows up in their bank balance as income.
Here are five things on which Luke’s interviews revealed a general consensus, and three things successful team leaders still disagree on.
Where the 50 Team Leaders Agree
1. Team Leaders Often Make Less Than They Would Solo
Plenty of agents assume their team leader is pulling in more money by running a team than they would on their own.
Luke’s interviews found the opposite in many cases.
“The dirty secret in the industry right now is that team leaders don’t make any money… the majority of teams out there, if they’re being real with themselves, would have made more money as a solo producing agent than they are right now with the 20 agents they have on their team.”
2. The Right Team Model Depends on the Leader, Not a Headcount
The interviews point to three team models. None of them is better than the others. The right choice comes down to the leader’s goals, both personal and professional.
- Rainmaker/Navy SEAL team: the leader still produces real revenue, first with leveraged support like an admin, a transaction coordinator, or a showing agent, then alongside other producing agents as the team grows
- Large team: 30 to 45 agents
- Mega/enterprise team: 50-plus agents
Luke ties the choice of model to a bigger question about what kind of life the leader wants:
“The biggest lesson I have learned is that you must decide why you are building the team and you must decide what you want your life to look like.”
3. The Messy Middle Sits Between Two Models
The messy middle hits teams scaling from a Rainmaker or small Navy SEAL model toward something larger, whether that’s a larger Navy SEAL team or a large team of 30-plus.
As Luke estimates, a Navy SEAL team can have anywhere from four to 15-20 agents. If the messy middle can strike around the 10-30 agent level, it’s more likely to affect leaders at the Navy SEAL level as well as those intent on scaling to a large or mega team.
A team that stays a Rainmaker or smaller Navy SEAL team by choice might skip this stage entirely, but every team leader will experience growing pains.
Wherever the messiness hits you, it’s not a place you want to live in.
For teams pushing through it, the trouble starts when a leader tries to step back from production before the team can replace their income. Commission splits make that math brutal. Going from 100% commission as a solo producer to a 50/50 or 70/30 split, without enough agents generating volume, can crater a leader’s income for years.
George Laughton, one of the leaders Luke interviewed, brought his own income down to about $60,000 to $65,000 a year for three years while stepping out of production. Now, as owner of the EveryPlace Collective brokerage, he leads over 200 agents.
Luke frames that pay cut as money going back into the business rather than money lost:
“You’re making 65K, but you’re really just taking all your profits and investing it into the business.”
4. What Keeps a Navy SEAL Team Together
Leaders who stay in the Navy SEAL model for years keep it working by staying close to their agents. Shannon Gillette is a good example. Halfway through the year, she had closed $100 million in volume with 11 agents on her team. She kept producing at a high level and stayed involved with her agents every day.
Luke described what happens when a leader loses that closeness, using his own experience at ReminderMedia:
“The less and less I make calls and close people to use our products, the less and less they respect my opinion in sales. It’s just a natural thing that happens.”
5. Scaling Only Works Once Systems Are in Place
Growing past the Navy SEAL model changes what the leader’s job looks like. There’s less time producing deals, and more time recruiting and developing people for the right roles.
To hand that work off, the leader has to turn their own habits, like how they vet a new agent or train one on lead follow-up, into steps someone else can follow. Turning those habits into steps is what lets a team hire a director of sales or a recruiting lead to run it, instead of the leader carrying it alone.
Byron Lazine summed up the change for team leaders in a line Luke repeated from their conversations:
“You’ve got to realize your job. You are switching to becoming a recruiter. It’s not just recruiting people with a heartbeat. It’s putting the right people in the right seats of the bus. You are a recruiter and developer of people, and you have to love that.”
Where the 50 Team Leaders Disagree
1. How Big a Team Needs to Be to Turn a Profit
Byron Lazine and Lisa Chinatti argue a team needs at least 50 agents before it turns a real profit. Below that number, they say a leader is better off running a Navy SEAL team instead.
Amy Stockberger, though, runs a profitable team with somewhere between 23 and 26 agents, without selling real estate herself.
Luke says Amy doesn’t fit neatly into either model. She isn’t a full Navy SEAL leader by his own definition, since she doesn’t sell real estate, but her team classifies her that way anyway because of how closely she stays involved with agents day to day.
Both approaches can work depending on each leader’s goals and the systems in place.
2. Recruiting Philosophy
Team leaders split into two camps on how to build a roster.
- Some leaders recruit in high volume, treating more agents as the fix for most problems
- Others run a strict vetting process and add only agents who clear a high bar for quality
Luke mentioned he’s dedicating a full chapter of the upcoming book to agent attraction and recruiting, weighing the pros and cons of each approach in more depth.
3. What Profit Actually Means
Luke calls this the biggest source of confusion among team leaders. Profit depends on what counts as an expense, and that definition changes from team to team.
Luke ties the confusion to how leaders categorize their own expenses:
“Profit can be manipulated based upon what you say is an expense or not an expense… there’s a lot of team leaders out there that are not making more money. They just have a team. All these agents think their team leader is making a ton of money and they’re not. They’re sometimes making less than you as the top producer on the team.”
That could be because they’re stuck in the messy middle. It could also be because the leader is choosing to invest more of their income in growing the team. Could also be both.
Profit doesn’t include what gets allocated to operating expenses or reinvested in systems new and old that keep the team running and help it grow.
Once those adjustments are made, the final income figure can be significantly lower than expected, especially during the messy middle.
What Comes Next for Team Leaders Weighing Their Model
Luke is turning all 50-plus interviews into a book on how to build and scale a real estate team, co-written with Byron Lazine. The patterns above come from those conversations, and the book goes deeper into each one to help readers know, first of all, whether building a team is the right move for them, before laying out everything a team leader needs to know.
The team event tied to the book, BAM Camp: Team Leaders on September 22-23, is sold out.
Team leaders who want to know when the book is available can fill out the form at remindermedia.com/teambook.
