How to build an expansion team that's right for you

Kris Lindahl’s expansion team website “pillars”

4 sites to rule them all

In 2014, Re/Max Result’s Kris Lindahl made some key strategic moves. He bought four big real estate website names in his operating state of Minnesota for hundreds of thousands of dollars in just four days. They were MinneapolisRealEstate.com, SaintPaulRealEstate.com, DuluthRealEstate.com and RochesterRealEstate.com.

“I saw a lot of people who had one website that did particularly well for them,” said Lindahl. “I thought, why don’t I try to get all of them?”

The expansion team leader uses Re/Max Results’ company’s network of 34 offices in his state of Minnesota for his team of 14. He has a hub in Blaine, Minnesota, and does business into Western Wisconsin.

The four websites are now the “main pillars” of his expansion team, he said.

“I am expanding through Internet and SEO with really big websites,” he said.

The websites generate leads for agents, and they appeal to sellers and buyers.

“Clients want the most exposure possible and to sell for the most money possible. They don’t care who the agent is — they just want the most exposure,” said Lindahl.

And these domains, now worth a couple million dollars, will remain an asset he can sell down the line when he finishes up in the real estate business, he said. “They are the four biggest websites in Minnesota for real estate.”

Another part of the high-profile platform for his team has been becoming the official real estate partner of the Minnesota Wild ice hockey team.

Team trends and tips

Some expansion teams are not making money, said the Re/Max agent, “because the people expanding are not ready to expand yet, but that’s what everyone tells them to do. You have got to make sure the hub is under control.”

There are two trends in real estate teams and expansion, he added. “Everyone thinks they need to be in a team, everyone thinks they need to expand — but my advice is, don’t expand outside your state unless you have a brand to support it.”

Lindahl, who has been in real estate for six years, had built up quite a head of steam before going into expansion mode. His production in 2013 was 147 transactions with just himself and one administrative assistant. In 2014, he did 175 transactions, and in 2015, when he started the team, the number went up to 369, a volume of just under $100 million with a team of 10.

And he is thinking big for his team.

Strategizing for growth

“Keller Williams is OK with putting an agent in another market center doing 15 transactions a year — and doing it in 20 markets. I want Rochester to do 300 alone,” he said.

The expansion team leader said he only wants to add agents if he has enough business for them. And there has to be good preparation before entering a new market.

In Duluth and Rochester, he said: “We expanded there before we put agents in — we generated some leads. You need to start to understand the people in the area before you put in agents.”

Even in a single state, the culture of towns can vary widely, as it does between Minneapolis and Duluth, one fast-paced, the other more relaxed.

Building a team

Lindahl is a big personality, and the personality of an expansion team leader is reflected in his team, he said.

“They are what we attract,” he said. “You don’t need to be salespeople — people don’t like being sold to. I want likable people with a good work ethic.”

Having a high-profile expansion team is good for recruiting, added Lindahl. Currently no. 22 in the country in his first year as a team, the Kris Lindahl expansion team might be inside the top 20 in a few weeks.

And this helps him attract good agents.

“People are saying, ‘We need to get in early. We need to be a part of that,'” said the agent.

Of course, not everyone loves the Kris Lindahl team expansion in his areas of operation, he points out. “People don’t like it when you expand into their market.”

But he has the backing of Re/Max Results in Minnesota, the no. one Re/Max franchise in the world, with 950 agents and 34 offices.

“It might be a little bit easier for me to expand in Minnesota because of that.”

Justin Havre’s failures — and successes

Lindahl has compared notes with a Re/Max First agent in Calgary, Justin Havre, who is four years down the road with an expansion team concept — but it took a while to get it right.

“It’s been a bit of a rollercoaster,” said Havre, team leader with Justin Havre & Associates, a hub of 24 agents and 6 administrative staff members. In 2014 and 2015, his business had 480 million Canadian dollars in sales volume.

The tough start

Four years ago, Havre acquired the domain name EdmontonRealEstate.ca and started to build that out in the market.

He put a team into Edmonton, but it didn’t work out. There was little loyalty there, and the team dispersed.

“It’s hard to build a strong culture and strong loyalty when you are not on the ground yourself,” he said. “What I was trying to do was mentor these agents to build a team, but it’s a challenge when you are not there on a daily basis.”

Having someone on the ground who has the structure and systems in place makes things far simpler.

A new attempt

Havre has concluded that you are not taken seriously if you are an agent from a different market. It is better to start with a core agent from the market.

The Calgary-based agent has just set up a strategic alliance with top-producing Edmonton Re/Max agent Terry Paranych after a chance meeting and a prod by another U.S.-based Re/Max agent, Gary Ashton, at last year’s Re/Max R4 conference.

“Terry Paranych is a Re/Max team legend,” said Havre. “He is the no. 1 in the Edmonton market.”

Havre will be providing Paranych’s team with leads through the website.

The way he sees it: “The premium domain name — that’s my brand. And it is allied with one of the biggest names in the market — he’s the brand of choice in that market.”

“You have got to find people that you trust with the same vision, a solid foundation and knowledge,” he said.

The Edmonton website has enough business on it to keep 40 or 50 agents busy, said Havre.

“Our goal is to get up to 60 agents, which is something I am not able to do from my own market, a three-hour drive away.”

He is expecting the new arrangement to provide around 70 to 100 deals a month when things are settled. The finances will be the usual team split, divided among the agent involved and the two strategic partners.

“The goal with an expansion team, depending on what your intentions are, is to generate (additional) revenue stream,” said Havre. “I personally think we can do that by creating strategic alliances with the right people.”

As he looks back, the Calgary-based agent, who also has an expansion team in Kelowna, British Columbia, said: “Stretching yourself too thin can be bad for your own business in your own market — that’s why a strategic alliance is just music to my ears.”

Jeff Cook’s independent view

Being let go for doing your job too well can put a fire in your belly. This is what set Jeff Cook of Jeff Cook Real Estate in Charleston, South Carolina, down the expansion path. Getting laid off from his corporate job in 2002 after logging a work history as one of the top sales associates, Cook decided to create his own destiny.

He stresses that the growth of his expansion team has not been organic at all.

“It’s been extraordinarily strategic, and we have quadrupled sales over the past five years,” said Cook.

“The market has gotten better — but not that much better.”

Humble beginning and a big journey

Jeff Cook Real Estate began as a single office where the administrative staff and sales agents were under one roof.

“I thought, ‘If that operation can service another sales team, then we can have a hub that serves all the sales offices,'” said Cook.

Expanding to locations 100 or 200 miles away is not what Cook wants to do at this stage.

“We are opening our fourth sales office over the summer this year, and they are all within 20 miles of each other in all four corners of the city,” he said.

The business’s inventory typically ranges from $200,000 to $1 million, and Cook is launching a luxury brand for properties of more than $1 million at the end of this year.

How does the competition like having an expansion team in town?

“The more homes you sell, the less competitors like you, but they do enjoy the fact that when they do business with our team, it’s the same consistent service,” he said.

In the next three or four years, Cook would like to have eight offices total in and around Charleston. It is most likely these will still be in-state so that Cook can drive to any office within two hours.

Daily operations and perfect fits

The broker is a big advocate of having operations and sales teams working together.

At the moment, the team has 12 operations staff and 22 sales agents. In 2015, the business helped 555 families — this coming year, it will be 721, said Cook.

There will be a big company cruise if they hit the target, so he is confident.

An expansion team like his allows his agents do what they do well — selling and servicing clients, said Cook.

Because of the expansion team model, they don’t have to worry about marketing systems. They know that is handled in the office, he said.

They will be expected to perform, warned the top salesman.

“I am really looking for people who are willing to make this a full time career and to be accountable to a higher standard,” he said. “We are not the average agent — our average agent sells 25 homes a year, compared with five or six.”

The Redfin expansion model

As you look across the real estate brokerages, expansion is being done slightly differently in each case. With companies like Keller Williams, expansion teams are often targeted across geographic territories and state boundary lines, within existing KW brokerages.

Redfin, on the other hand, has modeled its expansion strategy by asking its leaders to cover a certain area, usually within one state. The expansion team leader, or “market manager,” is a Redfin employee supported by a regional director.

Chris Prescott, previously with Coldwell Banker, started as a market manager of the Twin Cities, Minnesota, two years ago. A veteran agent of the area, he was looking for his next career move, and he has since built his Redfin team up to 15.

There is no need to have an office in every location. The “office” is at Prescott’s house, and he and his agents meet up at a local café for a monthly meeting. Prescott also has a Zoom online meeting every Friday with around 20 expansion managers like himself across the country.

The market manager would like to expand further within his role, which is contained to the state of Minnesota. His remit is currently the Twin Cities.

“The biggest thing about being in a Redfin expansion team is you don’t need to spend time prospecting,” said Prescott.  “The Redfin app immediately generates all the leads that you could handle.”

This has appealed to buyer’s agents working in other firms.

Recruiting for his expansion team, Prescott was surprised at how many people he had to turn down.

“One of the hardest challenges I had was I had to go through 100 people before finding the first 10 of our team,” said Prescott.

“A lot of agents call up and say, ‘I can just move my license over.’ But we are looking for people who want to be a member of the team, who get the Redfin value system about the consumer experience,” said Prescott.

Read about how Keller Williams expansion team leaders build their empires.

Email Gill South.