Don Yoakum Buying Selling Real Estate Brokerages And Why eXp Just Makes More Sense
"It's a relentless pursuit of wanting to make a difference, to make things better, to create a legacy by helping others to do something so that when I'm gone, my work can be carried on." Don Yoakum is an expert to all things real estate brokerage. He was a part of one of the fastest growing Keller Williams offices and their history. He expanded over 10 offices and then moved to eXp.
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Don Yoakum Buying Selling Real Estate Brokerages And Why eXp Just Makes More Sense
Brett:
I am excited about our next guest. He is an expert when it comes to all things real estate brokerage. In fact, he was a part of one of the fastest growing Keller Williams offices and their history. Here locally, we're actually I kind of grew up in Roseville, California. And funny little facts here and my when I before I joined Marcus and Millichap, I was actually at Keller Williams for a short stint and residential working for gentlemen in that exact office, I had met Don. And so fast forward he is now he's expanded over 10 offices, and then he's moved to eXp, which we're also going to talk about here a little bit as well, but we're really gonna dive in his story and get to know him a little bit more. So please welcome Don, welcome to the show. Hey, Don, how you doing?
Don:
Awesome. Thanks, Brett.
Brett
Good to see excited, excited to have you on the show. Thanks for joining us. And so would you ever listen to just a little bit about your background? A little bit more about your story there with a brokerage? And, and then your current focus?
Don:
Sure. Well, first of all, when people ask me to tell my story, I will typically start it by having competed at an international level and windsurfing. And the reason why I do that is because the disciplines that were required in order to be competitive at an international level, are disciplines that I've carried into business and specifically real estate. And so I was a three time national champion, I was on the Olympic team for three years as well. I actually did not go to the Olympics in 84. out, which I know dates me a little bit. But I also turned professional at that time and wasn't professional until 1990. I had a wonderful career, traveled the world, actually did win one world title, and got to see a lot of our amazing planet and me and compete with some world class people. And I got into real estate in 90. Well, I actually technically got in in 89, my first full year was 1990. And I did well. I closed 51 deals my first full year in the business, which was 90, I did that in Sacramento, California. And I really enjoyed selling real estate, it was great. Although I would say my timing was interesting, because we entered into a recession in Sacramento during that time, closing three military bases and the inventory actually climbed to 18 to 24 months. So it was a time where actually values were going down. And I was the listing agent. And so I made a big career out of selling expired listings, you know, properties that others couldn't sell. And that worked for me. And then you know, I will tell you though, the maybe was a combination of the prices going down for so long. And working really hard as I was, I was one of the top agents in the Sacramento metro area. I got burned out, actually. And so I joined a tech firm that was trying to enable a connected web based transaction, which you know, that was right at the dawn of the internet 9596. And what was cool about that was I got some corporate sales experience. And I had, you know, of course previously been, I had a marketing company and before getting into real estate and when I got into real estate sales, of course that's business to consumer. Now I was doing more of a business to business communication, which is a wonderful experience and that company got sold and Not to Auckland financial, had a little bit of stock but nothing of great consequence. Then I took a role as regional manager at a title company and led a really dynamic team there from 98 to 2000. Went from 8.58 to 13.65 market share in two years, which is a material move for them. And that's when I joined Keller Williams, I joined as a team leader in Roseville, as you mentioned, and they had 10 agents at the time, and we're, you know, I guess, I don't know, floundering was appropriate term, but they weren't in exponential growth will say that much for sure. But I was able to get them there and took that office to 184 agents in 27 months under my leadership, and then it went on to actually become the most profitable Keller Williams in the country at one point. And, as you said, I then went to other offices, six in the Sacramento metro area, few in the Bay Area 10. In total, I think I may be the only person in kW history that has successfully built 10 of their franchises from the ground up. And a very good experience, I learned a lot when I became a professional coach in 2010. And did that for six years. And that then, I actually my mom, my mom and my family, I have some family in the northwest, I wanted to be close to her. And she was having some issues, health wise. And so I took a role as a regional manager with finance for an American lending company, and that was really fun. And I helped them with recruiting and business development, and got to learn the lending side. Right. So I'd had the brokerage title in the lending. And then I was right when I took that role Brent Gove is getting into eXp, and he approached me on it. And I was intrigued by the model, I must say, I told him, I thought it would be good for him for sure. But I passed because the timing just wasn't right for me at that time. But when Brett really started prospering in the model, and making over six figures per month, I did get my attention, I must admit. And so I took a closer look. And I reached back out to one of my previous kW business partners, Jean Frederick, who's on the board at Edie eXp. And I just wanted to get my arms around the economic model, because I was used to more of the bricks and mortar brokerage model. And frankly, I wasn't seeing how they could afford to do all that they were doing in terms of providing a competitive comp plan, stock and revenue share. I soon realized though, is because they stripped out the costs out of the model that did not die to the consumer, specifically the bricks and mortar and a lot of the staff and infrastructure expense that goes along with that. And that enabled them to treat their agents like partners. And so as you said, I did join them. And I now feel as though I have an opportunity comparable to what I had at kw, maybe even greater, but without the broker liability and capital risk. And it's been amazing. It really has been extraordinary. Fantastic as to today.
Brett:
Yeah. Fantastic. And thank you for that context. And that background, which is so important and I'm curious now before you're successful. First of all, it's a win, you know, world class windsurfer. And as a, you know, real estate agent and then on to a broker and leading offices and then lending and now back into building more agents in brokerage in eXp. I'm curious, it will take a step back, who is Dawn, growing up and more. So I want to focus on what I believe will be given certain gifts in this life. And these gifts are God given gifts and these gifts are given to us that we can bless others. So what was that one gift you believe you believe you? Maybe you were given dawn, and help how you help? You know, bless some real estate agents today in your business?
Don:
Well, it's an interesting question. And I do recall in high school, my psychology teacher asked us what we felt our strongest attribute was a gift as you would refer to it. And I would say it's drive, I would say it's a relentless pursuit of wanting to make a difference, to make things better, to create a legacy by helping others to do something so that when I'm gone, my work can be carried on. And it just, I think when you have that attitude of never ending improvement. Tony Robbins has a I think he uses an acronym. A Can I, you know, which is constant and never ending improvement. And I certainly have that I really, it's, it's never really good enough, I will tell you, it's a bit of a double edged sword. Because it took me a long time to gain peace with having it never be enough, right. Because when you're constantly in pursuit of that next thing you don't, you're reluctant to give yourself the satisfaction of recognizing the progress and the difference that you've made. And so I'm better at that. I won't say I've mastered it. But one of the things that I did learn from being in Strategic Coach, which is a program by Dan Sullivan, fantastic program, he's authored a great book called How to get better. And one of the things he talks about is, is measuring yourself from where you've come from, to where you are today, rather than where you are to where you want to be. Because, in fact, if you're, if you're measuring yourself on that gap from where you want to be, you're measuring on what you don't have. And I think that that can create a level of discontent that is not healthy. And so it has driven me, right, and which really was just like throwing gasoline on my fire. That I would say, maybe I've mellowed a little bit in that regard. And, and I'm more focused on seeing if I can make a difference for other people now, and so much more than just my own personal achievement, because I realized that, you know, I'm really only one person. And you know, there's literally hundreds, if not 1000s of people that I could make a difference for if I really put my mind to it. So that's my primary focus today.
Brett :
Absolutely love it. So well said and that drive emanates with your story and getting to know you over the last few months. Full disclosure, I joined eXp and my biggest reason was a gentleman named Matt Stewart and Don Yoakum. And this is obviously Don Yoakum. And it was just their leadership, their story. And their willingness and openness to help others succeed and coach and coach right and which has been amazing so far. And big, big, big part of my decision to move over my commercial real estate brokerage business with the eXp. By the way, side note, eXp just announced a brand new commercial division and just just brought in a gentleman to help lead that. And he's also a former Marcus and Millichap agent and then opened his own brokerage and he's going to be on a future show. But that's for another show
Don:
That I did. I didn't realize he had been at Marcus and Millichap. That's great.
Brett:
Isn't that fantastic? Yeah, actually flew down to Irvine, I met with them this last week. And we sat down and just brainstormed Don, and I want to get offline with you and him and go through some of the strategy there. And excitement that we have with collaborating with eXp in the commercial business and bringing it all together. But yeah, he's Marcus and Millichap. And so we had a lot of a lot of shared connections and stories, which is fantastic. So focusing back on you, though, no, here, here, Don, When did you become, you know, kind of fascinated indoor, maybe I like to use the word obsessed, you know, with driven folks like ourselves for that next thing, but with that shift between your success and helping others. So when did it shift from, hey, I'm successful. Now I really want to help others be successful. And in particular real estate brokerage? Right, because I think that is something that is specific and niche. So walk us through kind of that transition.
Don :
Yeah, well, I would say that there was once I had built out those 10 offices, and this is an important lesson. It's not necessarily a great, great moment in my life. But when you're making really big decisions, it's important that you be careful not to make them from a position of despair, right. So when you're down really down, or when you're in a place of overconfidence. And so, one of the things that happened to me during the early 2000s, we were having literally a bonanza in real estate, but in my world. It was like I was in the river going with the current and I was paddling, right I mean, it was really the top of my game and the top of my industry, one of the top brokers in the country and so Then I decided how I want to get 100 people out of the rat race and, and not just myself, right. And so then I went out because remember, I had built 10 offices, those are all good and solid, then I chose to purchase with some other folks 21 offices and 14 of those needed turning around. Okay, now keep in mind, they needed turning around during a time when everybody I mean, literally the money in real estate was falling from the trees. So these folks that had built those offices had done a pretty poor job. and subsequent to that the market crashed. And so I found myself in a very precarious position of inheriting 14 challenges, real challenges. And so while my intention was to help 100 people get out of the rat race, what I actually did was put myself in a situation, because I was so bold, so confident that I really got myself in over my head at the worst possible time. Fortunately, we didn't have much debt. But the fact of the matter is, I had to close six of those branches. Five, we sold below our basis, we did turn around three of those 14, I did get that portfolio back to profitability. But man, a lot of these gray hairs that you see came from that period of time. And so I would say that my legacy of shifting into wanting to make a difference. Got somewhat of a false start. Right. And interestingly enough, when I organized my way out of that situation, I did position a half a dozen people that are now very wealthy with those market centers, because I gave them the opportunity to take them over. So there was some real positive that came out of that. And, and also, I would say that some humility that I gained in that process. And so that's wisdom that I've now carried forward into my world today. And maybe that's why I went into coaching because I felt like okay, well, now I could dedicate myself full time to making a difference for other people, but not put them at undue risk, nor myself or my family. And, but that the beauty of the eXp and and I'm really only learning this, to the extent that I have now that I'm inside it, is that I really, it's like the rest of the real estate industry has a sales job. And we really have the opportunity to create wealth and have a business. But we don't have we're not exposed to the broker liability and capital risk that myself and my partners had when we were building the kW franchises. And so in my mind, it's really the best of all worlds where I can, I can leverage my, my wisdom now and make a difference for other people, but not put anybody at risk.
Brett:
So Simon does that a little bit more because that's so well said and like so for the agent maybe who's listening right now who's selling 20 to 50 homes a year his top of his industry has built a team out is considering purchasing, you know, like a Keller Williams office or REMAX office or franchising, and are taking over their mentors office to do that. Walk us through exactly what you're saying. I think a lot of times that's missed, especially for real estate agents, you know, that thought of liability running the business owning the business, and how eXp, you know, we believe is a superior model.
Don:
Yeah, well, first of all, I would say if someone's trying to sell you a bricks and mortar franchise run, because that is not where you want to go. Right now. We, you know, since the great correction of 2007, eight, we've been in this really extraordinary market I mean since 2012, even partly 11. It's been just crazy, crazy good in the real estate brokerage business. And during that time, interestingly enough, we've seen a couple phenomenons that I didn't have to deal with when I own the brokerages. And so this next correction, in my opinion, is going to be even more severe. And those two phenomenons are the reason we're seeing real compression in the commission from the agent to the consumer with the likes of Redfin and Zillow entering the space. One day Amazon, I'm sure they've kind of got their toe in and an affiliate relationship with God banker now. But so that's good. That's one factor that is affecting the brokerage profitability model. And then there's also been margin compression from the agent to the broker, and the agents are getting a better and better deal, even though they're not offering stock and revenue share like eXp does. They're offering a more competitive commission. And so it's basically squeezing the profit out of the brokerage model. The only thing that has those bricks and mortar brokerages still standing is the fact that we've had this crazy market with historical low interest rates. And so once that market cycles, and we're actually frankly overdue for a cycle shift, it's going to be that nominal profit that they've been enjoying will become more nominal, and in some cases, probably not a profit.
Brett:
Yeah, so we'll set in being that you've, you've seen the booms and busts are multiple, multiple cycles through as a realtor, as a owner and operator of franchises within Keller Williams and have grown those buying some that went through the bus having to bring him out, I can't see somewhat of more wisdom to help share that. And I just think it's so missed. And so thank you for sharing that. So, by the way, small deal, I think one of the offices you had in Palo Alto, we just closed the deal last week for the deferred sales trust for an $8.3 million sale, he happened to be one of the gentlemen, you're staying for confidentiality, but who was a part of your team, and he used the deferred sales trust to defer taxes. And this is part of how we also connected as well. So just a little small story there. By the way, the deferred sales trust works for primary homes, if you don't know that, in primary homes do not work for 1031 exchange, in case you're interested go to capital gains tax solutions comm to learn more about that. So now let's, let's shift a little bit here. You know, let's, let's maybe the biggest mistake you're seeing in general right now, for real estate professionals. You know, maybe you can talk about this the preparation for for the, for the change of this environment, right, from going from a really hot market, low interest rates, and due for a correction, what's what's the one thing you're saying, hey, do this right now to grow your real estate, you know, you know, market share, what would you say that is?
Don:
On the agent level, in a personal productivity perspective, I would say that most, the majority of agents are too geographically dispersed. And so they have not built a dominant market position, that allows their marketing efforts to be magnified. It's kind of like they're six inches deep and a mile wide, so to speak. That does a couple things. One is not only do they not get a magnified effect from their marketing, but from a time perspective, it really is challenging. From an expertise perspective, it's also hard because you're trying to learn new markets all the time. And the consumer. While trust is their number one hot button, local market knowledge is their number two. And so I would say lack of focus is definitely a component that is prevalent among the agents. The other is not enough proactive action in pursuing listings. We have a very tight inventory situation in the majority of the country right now. And there's just the agents are not doing enough to go out and get listings, listings right now of gold. And so there should be more action taken in that regard. And so those would be to short term, sort of, I guess it's a combination of tactical and strategic, but, and then long term, I would say that they they're spending what they make, and so they're, they're not investing into passive income vehicles at the level that they would need to in order to have a retirement with some dignity and reasonable amount of time. And so they stay on the treadmill, and they have to get up and, you know, as a real estate agent, we're essentially unemployed after the closing of every deal. And unless you're taking a portion of that income, maybe putting in Directed retirement accounts, and then investing into cash flow vehicles from that. Or you're buying property, you, you end up forever on that treadmill. And, and so whether it be notes or real estate, or joining an organization like the eXp that offers a revenue share opportunity, they've got to do something so that they aren't put themselves on a trajectory. So at least at one point, they don't have to retire. But at least having the option of doing so. would be my, what I would say.
Brett:
Yeah, great, great answer. Thank you so much, so much wisdom right there. Are you ready for the lightning round?
Don:
I'm ready.
Brett:
Best Ever real estate decision you've ever made?
Don:
Oh, it has to be joining the eXp.
Brett:
Absolutely. Worst real estate decision you've ever made.
Don:
In buying 21 offices with my partners in 2006.
Brett:
If you could go back to your 25 year old self knowing what you know now what is the one Golden Nugget you would tell yourself to do or to know?
Don:
Well, as I said earlier, when you're faced with a big decision, be sure that you don't make it from a place of under or over competence. Be level headed, seek counsel. And when you have a great idea, or one that you think is a great idea, have the humility to seek out others that can challenge that idea. Right? Your friends are going to have a tendency to patch on the back. Oh, Don, yeah, that's really brilliant. Okay. What I do now is I look for people that are willing to be honest with me and say, Well, actually, maybe it's not so great. And here's why. Right, and so seek out people that will have an opinion that may differ from yours. And to give you a more balanced perspective before you go embarking on some tremendous journey.
Brett:
Absolutely love it. So much was in there. When you write that book? Let me know because I'll read it. By the way, speaking of that, the number one book you've gifted or recommended the most in the past year.
Don:
Atomic habits by James clear, is the one that has given the most, although there's so many amazing books, my son and I are really I'm rereading the Seven Habits of Highly Effective People right now with him, which is a classic, timeless classic, the But yeah, I think really the atomic habits probably is the one that resonated with me the most is a great quote in that book that says you will not rise to the level of your goals that you will fall to the level of your systems in process. And I really believe that to be true and working harder to attract people in my life that are really good at that execution piece of the puzzle. I've got plenty of drive and vision. And so it's important that I surround myself with equally great people to integrate my ideas into a system and process that can be efficiently run and implemented.
Brett:
Beautiful love that. What are you curious about right now?
Don:
I'm curious about what's going to happen with the market. You know, as I mentioned to you, we are overdue for a correction. The Fed in 2018 started stepping up the rate and we saw the correction coming at us pretty hard. It spoke to them and then they reversed course and then they've been pretty much lowering the rates and then and that has kept the market kind of inching along. I hate to say it but kind of like continuing to blow air into that bubble. And so but you know, I am not ish, maybe I'm older now and not quite so cocky or something, but I don't really know. I can't really predict the market with the same level of accuracy. So I'm really I'm, I see, I watched the affordability index that by the way is a really important indicator. You know, the consumer looks at the close sales and then the realtors look at the inventory but a wise person that wants to know the market, watches the affordability. That's a precursor to those other two. And of course when rates are going down, the affordability is going up. Okay. But if you notice that the affordability starts to go down again, that will be it. Okay. If the Fed were to raise the rates just a little bit, or for whatever reason the bond market were to cause higher rates to be coming to the market, the market would crash immediately in my opinion. Okay. So I really, I'm curious, and I'm fascinated to see how this whole thing plays out. And then also then how it affects the rest of the industry. It was really fascinating to see how COVID was a phenomenon that brought, we all knew that we were moving to a distributed workforce. That was a trend. And man, did that trend ever get accelerated in the time of COVID. Right. And so I suspect, we're going to see something similar happen when we have the correction, that the business models will be forced to evolve in that situation. But that's what I'm curious about. I'm curious to see how that all plays out.
Brett:
is so well said. And so we are out of time, but I would love to have you back again to share some more wisdom with our audience. But for, for our listeners, you're listening out there. And if you are a real estate broker, commercial or residential, I want to let you know and extend an offer to you to go to expertrealtysecrets.com. And learn a little bit more about the XP model and the team that we have, that I'm such an honor to be a part of, and I'm part of Dawn's team, some of the best of the best when it comes to residential sales. And then now, I'm a commercial, I've been a commercial real estate broker for over 13 years. And so if you're interested at all, please go there to learn more. And then you can set up a time to discuss how this model might be a great fit for you and your business in your future. And with that being said, Dawn, any, any last words for the audience? And then also let them know where they could reach out to you and find you?
Don:
Absolutely. Well, I would say to folks that there's changes inevitable. And so what will be sustainable is relationships, and coming from a place of contribution, and finding a way to add value. And so, if you will do your business in a relationship based way, if you will be open to change, because it will happen whether you like it or not. And then you will reposition yourself in such a manner that you continue to add greater and greater value, no matter what happens. You're going to be great. And you will be a value. People will want to be in business with you. They want to be in a relationship with you. And it will be a very nice journey.
Brett:
So well said thanks so much. And Don, where can people find you if they want to reach out to you and connect with you?
Don:
Brett:
beautiful. Hey, I want to thank our listeners for listening to another episode. And Don, I want to thank you for being on here sharing your story, sharing your wisdom and inspiration here. And again, if you have any needs for capital gains tax deferral, you go to capitalgainstaxsolutions.com And if you're interested in the eXp model and seeing how that might be able to help you grow your business, in real estate, you can go to expertrealtysecrets.com. And with that, please rate review subscribe. And remember, as always, we believe most high net worth individuals and those who helped them struggle with clarifying their capital gains tax deferral options, not having a clear plan is the enemy and using a proven tax deferral strategy such as the deferred sales trust is the best way for you to grow your wealth. And using a proven model like the eXp model we believe is the best way also to grow your real estate business and also passive wealth as well in that industry. So with that, please rate the review, subscribe again. Thanks so much for listening, everybody. We appreciate you goodbye now.
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