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Lessons - How Specialization Built eXp Realty Into a Billion-Dollar Empire | Leo Pareja - eXp Realty CEO · Success Story with Scott Clary

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  In this lessons episode, discover how mastering creative financing and government programs early
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  can set you apart in real estate, explore how losing everything became a catalyst for smarter
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  rebuilding. Understand why adaptability and choosing to stay in the game when the rules shift
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  is the real marker of lasting success and why the American dream still holds strong for those who
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  persevere.
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  When I look at sort of the framework that you deploy for yourself and now for all your
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  fraternity brothers, I mean that is almost showing mastery of real estate and the different
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  levers and mechanisms that you can use at a very early stage because I've worked with a lot of
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  different real estate agents and between government programs and I'm not a real estate investor,
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  I don't pretend to be knowledgeable but I always find that real estate is the one category of
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  investment opportunity where there's so many systems and opportunities that are actually built to
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  support it. Like there's all these creative financing rules, there's all these government
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  programs like it just seems like everything is built to help real estate investors succeed
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  but the real estate agent that I speak to is not knowledgeable about or they don't bring these things
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  to light. Like if I have ever had very few people have ever told me when I'm looking at a house,
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  oh these are other ways to finance it or have you thought about buying a fourplex and living in
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  one of the units and then renting out the other three. So I think that I mean part of your success
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  just outside looking in is the fact you just had like you immersed yourself in not only the surface
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  level of the industry but like all of these again not just selling but investing and that
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  investment actually led you to become a better salesperson but it's just interesting why I don't
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  see that happen quite often in real estate even for like mature 10 year experience agents.
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  So the one thing I figured out early on that I still preach is that the riches are in the niches
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  right like you know blue ocean strategy like I much rather become masterful and maybe just a
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  couple things that resonate and then I can actually be an expert at it right so like do I want to
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  compete with Walmart no thank you because like if everyone's going after the same product or service
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  then you're you know competing on price consumer acquisitions expensive versus like hey let me
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  become really really good at a couple things and demonstrating value to be picked is much easier
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  at that one yeah and that's what you did so um so 11 home 60 grand information so I blow it on
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  the BMW because I'm 20 something but by my senior or college I was I think my senior full senior
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  that year right because I graduated and then still had more time I did about $300,000 in gross
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  commission as a full-time real estate agent and that's like now like a year and a half two years
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  into this yeah two two years in right so and like I mean just tell the audience about statistics
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  I mean that seems like that is unusually high for two years into real estate that is unusually high
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  for today standards right so I think the average agent america makes about 42,000 so it's probably like
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  8 to 10 x especially back then with the average agent full-time professional made now eventually
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  this obviously ends up turning into like thousands of homes and real estate transactions completed so
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  what was the what was the sort of the playbook to sort of expand on those whatever first 11 first
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  $300,000 in commissions and then now at one point you were number one agent at color Williams
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  okay so what's the journey to get there that's the like the highlight on the internet right of course
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  the the journey is that you know or is it just hard work and well repeat it's also a lot of
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  this right so the journey is like I'm not that special at all $300, $600 happened in
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  05 right I was a licensed real estate and with a heartbeat in the greatest bubble history of the world
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  and so what that translated to is I went and bought as many properties as I could with
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  a ton of leverage because it was available no income no asset loans um you know the the the real
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  pivotal moment was I think in the summer of 0506 my account told me I was worth $5 million at
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  14 rental properties at the next five I thought I was God's gift to real estate and then within
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  like a six-month period that same account and so that was where negative a million dollars
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  and in the subsequent like 24 months I gave all that back the banks after doing a lot of crying
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  invaders and so that process was you had achieved last quadrant you you had turned into a real estate
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  investor very very quickly actually but without any of the fundamentals in place right like
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  not real free cash flow and real sustainable fixed debt versus variable debt and all all of the
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  the things that were skipped through in the in the exuberance of the moment in the market
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  so the the you know legislative safety measures and the lending system didn't exist that
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  exists today right you can't do that again today because we collectively as a country learned
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  that was a bad idea but did you hold on did you hold on to any of that no no it was all it was all
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  look at the reset button but what the lesson was learned is like hey there's a whole lot of crying
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  and then you it's it's it's one of those moments in life which is again a philosophy I prescribe to
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  it's like hey the rules of the game changed you can be mad about it or you can just decide do I
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  still want to be a market participant and I feel like this this thought process applies to everything
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  right like you know email marketing worked really well in 2001 right they made a movie about it
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  you got mail and like people get excited versus like we just don't even open it anymore and so
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  whether it's a marketing tactic or hey this this rule changed by the federal government we can't
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  do that anymore do you decide okay I could have big feelings about it for like a day and then you
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  have to make the decisions like okay do I still want to be a market participant and learn to plan
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  to new rules of engagement or I do I just move on to do something else and you also like as a human
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  being you always have that free will to say I want to participate I don't want to participate so
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  for me it was okay the world ended as I knew it what do I do now do I want to get out of rails
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  that are saying real estate in that point it was like hey people have lived before me let me try to
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  get in front of older wiser folks who've seen this before and as soon as I did they were like hey
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  this movie's played before right like 1992 the SNL crisis there's going to be these things called
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  foreclosures and on the bank ledger books they're going to call REOs so now you need to
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  find out where they're at right and you know Arianna my amazing wife she was in the business and
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  she had been to a settlement with an agent who had a bunch of REOs and she's like hey
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  they told me a lot of these banks are in Dallas you you need to go to Dallas and go get some of these
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  contracts for us and I turned for one opportunity where again showing up and knocking on doors and
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  co-calling say hey I want to do some of this stuff and they asked me to do these things called
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  broker price opinions which paid like 40 bucks for an opinion of value but we did like a hundred of
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  them 30 days and then they're like hey you want to sell some houses and then it went from like
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  at the worst year ever I think we sold seven homes and then within 12 months it was like 99
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  homes and then that turned into 280 homes and within like a four year period the best year we had
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  we did 603 homes in a 12 month period in 2010 which by today's standards there's teams that do
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  much more than that but back then before the accelerant of high speed internet and the technology
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  that we have available today I think our team was number five in the Wall Street Journal of all
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  teams in the country you know most people that I speak to that now look very successful from
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  the outside in there's always they've achieved a significant mark of success and then seemingly
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  lost it all at some point in their career and this is like not this is a story that plays out
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  again and again and again they could always see it as a rate of passage it is a rate of passage
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  it's always like oh I made a business and it's always you know a million dollars for most people
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  is especially people that are not entrepreneurial if you're entrepreneurial usually you have the
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  the the foresight to say okay if they suppose well I'm going to be making well over a million
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  dollars my business will be making well over a million but for the average like 9 to 5 W2
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  that's like a big amount of money a big sum of money to get in one year but most people that are
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  entrepreneurial I think what happens is they achieve this milestone they achieve money that they've
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  never thought possible and then there's sort of two paths they can go on because there's going to
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  be a point very rarely will that first success ever turn into the success that you're going to
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  talk about in 20 to 30 years from now usually there's some shit hitting the fan moment when it all
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  goes to crap and all goes to hell but I think that that that point that moment when you again like
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  what you said just to parodate you can choose to be a martin participant you can choose to opt in
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  or opt out you can choose to just complain and cry and and and you know like whoa is me like I
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  can't I can't continue like all these different all these different negative feelings you can have
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  at that point you can choose to take those lessons those learnings and just continue to build or
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  you can opt out and I think that's actually the the biggest indicator of success what you choose to
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  do in that moment so I heard a quote once it's sitting or do acquire a great fortune you must first
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  lose a small one right so I like that you know but you mentioned also like so this happens in every
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  industry so I mean in in in podcasting Apple podcasts where majority of podcasts down most come
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  from they used to auto download so when I used to upload as well as every other podcast in the
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  world used to upload an episode all the people that subscribed to your podcast automatically downloaded
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  onto their player so Apple updated this feature about a year year and a half ago where you don't
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  auto download anymore so if I subscribe to you five years ago and I haven't listened to you since it
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  doesn't make sense that I'm still auto downloading because downloads count towards advertiser but
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  yeah well it counts towards advertiser downloads and cpm in it that that fuels the whole commercial
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  model of podcasting for every podcast or in the world so when Apple did this I mean that's
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  on a on a low end about 20% of downloads and then revenue were cut overnight for every podcast in
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  the world on the high end like 30 to 40% so again this is something that you just have to deal
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  with in every and it doesn't matter what you're doing it could be drop shipping it could be you
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  could be selling on TikTok shops if you're in this space that doesn't really matter it's always
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  going to happen to you where whatever you've been building eventually the rules are going to change
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  and you have to find a way to persevere in spite of it so I hear a lot of people say that they
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  think the American dream is dead what is your perspective on the American dream after going through
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  all these ups and downs and highs and lows yeah and my advantage point is somebody didn't grow up here
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  right I didn't get here till I was 12 so you know my dad worked for an NGO so we moved around to
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  six Latin American countries so like I actually did kidnap injuries was a kid right like I fundamentally
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  believe if my story was in a different country someone would have kidnapped my family because
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  that's what you can do when you get mad at your competitors when there's no rules right in
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  in foreign countries so like just like simple things like our legal system works if I get mad I
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  sue you and for performance or non-performance or you know for payment right if I fail horribly
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  I hit bankruptcy and no one puts me in jail like there's there's debtors jail in other countries
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  right so to me this is still the greatest system on the planet is it perfect no
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  is there a better one show me like I just I haven't seen a better system so you know
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  cost of living everything yes maybe it's a tough moment in history and I don't want to take
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  any way anything away from that because I'm hyper aware that there is a lot of pain in the system
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  post-COVID with inflation but I don't know of a better system on the planet and this one.
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  Thanks for tuning in if you found this valuable don't forget to hit that subscribe button so you
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  never miss an episode and if you want to dive deeper into this conversation check out the links
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  in the description to watch the full episode see you in the next one