Why you shouldn’t join eXp just for the stock
Picking a real estate brokerage and picking a stock to invest in are two very different things. In this post, I explain why mixing the two, why picking your brokerage because of the stock opportunity can lead to some really terrible outcomes.
Picking a brokerage used to be simple
Picking a brokerage used to be simple. You’d find the cheapest and you’d go there. Maybe you’d go somewhere where a friend works, or you’d pick one based on some other perks. But, whatever it was, it was simple and straightforward. Now, it’s a bit more complicated.
When looking at a broker you have to figure out what the expenses are and if it makes sense for you. Two aspects of eXp are revenue share and stocks. Then, you’ve also got to pick a sponsor. And when picking a sponsor you have to consider a whole lot of different things. What do the sponsors have to offer? How can they help me grow my business? How do I even find a sponsor?
This is all a bit more complicated than just finding a place with the best price. In fact, it took me a year to figure out how to move over to eXp. So, what I want to do here is remove one of these factors from your brain. I’m going to give you one less thing to think about. I’m telling you: don’t even worry about the stocks.
The stock factor and eXp
There are some other brokerages out there that have stock programs. I dig a bit more into this in the accompanying video, but for this post let’s just focus on my experience with eXp.
Now, I’m not a stock expert. I don’t think I am one and I don’t pretend to be one. I sell houses and I’m good at it. You get awarded stock at eXp based on hitting certain benchmarks and I’ve earned a bunch of it. I’ve made some money on it and I’ve lost some money on it. But, it’s hard to predict and I found it was easy to get stressed about how my stock was doing. I’d worry about it and it would distract me from the reason I was in this business in the first place — to sell houses.
Again, we’re not in this as stock traders. As far as I’m concerned, the brokers are going to help you sell the most houses. If there’s a nice stock opportunity, that’s just a bonus. In my eyes, the same goes for any other little perks. Don’t pick a brokerage for the perks. Pick a brokerage because you are convinced they are going to help you sell more houses.
If you worry less about stock, and more about scaling your business and how to sell more houses, especially if you’re early on in your real estate career, I promise you it’ll be worth it.
So, find a company, an organization, a group that can help you go out and demolish your sales goals. Because if you could double your sales, that is life-changing. You keep doing that over and over and over again. That’s life-changing to a degree that investing will, very likely, never get you.
Now, you can get to a certain point where new opportunities are going to open up to you. You’re going to have different options. All that stuff is fine. But the vast majority of people in real estate should just be focused on selling more houses.
So, the most important thing to consider when picking a brokerage…
Pick the brokerage that will help you sell more houses. Align yourself with people who have it in their interest to help you sell more houses. It’s not the stock that gets me super jazzed about eXp, it’s the revenue share model and it’s the people who introduced me to eXp, the people above me, and the fact that they make money when I sell. And so now I have seven people above me who care a lot and whether I succeed.
My experience with stock and eXp
When I first joined eXp the stock was, like, $30 or $40 at the time. It started going up and then it fell and it fell and it fell. And after a while, I was like, you know what? I’ve got a lot of money in stock because we run a lot of commissions through the Gluch Group and I’m going to sell it because I had a ton of money in the account. And I just felt a little uncomfortable having that much of our cash in one stock. It felt a little risky. So I sold a bunch when it was at, around, $55 or something like that. And it’s just been marching its way down ever since then. I started thinking about how I could game it. If I bought low and waited for it to go high. But the more I thought about it, I remembered that I need to be focused only on how to help our team sell more houses. That’s my job. My job is to sell houses. I’m not a stock trader. There is no better use of my time and mind space than to help our team sell more houses.
So, I sold my stock. I took a loss on it and here’s what I’m going to do with it — buy rentals. In my mind, there are essentially no questions about it. If you’re in real estate, you have access to properties, deals, that kind of thing that probably no one else does.
The power of rental properties
I say start saving and work your way up toward getting a rental property. I believe that if you’re working in real estate, you should be focused on real estate investing because it’s what you’re good at. It’s what you know, so focus on that.
At a very simple level, I am largely invested in real estate. The vast majority of my net worth is in real estate. So, I encourage you to do the same. Look for good opportunities. I think the risk is so low.
And, what I especially love about real estate is that there’s nothing to check every day. There is no stock ticker. It takes up less mind space on a daily basis. And, I have a property manager running the one single family rental that I own. I don’t think about it at all. I have no idea. I’ve never even been to that house. I just get and cash the checks. This is actually one of my recent investment criteria. It can’t be something that I have to check every day.
What’s the big picture?
So, the big picture here is that if you want to do eXp, great. It might be a great opportunity for you. But don’t do it just for the stocks.
I’m putting my money into real estate. I’m betting on myself instead of Wall Street. I’m betting on the fact that my time, my energy, and my focus is better deployed against my team, the resources I provide to them, how amazing they are, and helping them to scale up their businesses. I’m betting that that’s a better bet. And I think for you, it’s probably the same as well.
I hope that helps and I hope it gives you some kind of framework for how to think about this. This is not financial advice, but it’s served me really well and I’m thankful for the way we’ve been able to grow our wealth.
And, as always, feel free to reach out. I’m always happy to answer any questions you might have. I’m always happy to share the knowledge!
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