Start With A Win - Diving Deep into Real Estate Turmoil: Lawsuits and the Future of the Industry

Starting point is 00:00:00 So, I mean, the reality is somebody has to admit fault. So you have leaders and you have hiders. Listen up, folks. If you're in the real estate space and you want to be here in 36 months, it's time to take some chances. Welcome to Start With A Win, where we unpack franchising, leadership, and business growth. Let's go. And coming to you from Area 15 Ventures and Start With A Win headquarters, it's Adam Kantos on Start With A Win. This is part two of two where I am being interviewed on the Real Estate Insiders Unfiltered podcast by James Dwiggins and Keith Robinson. Let's get back into it. So you were there when RemX got served with these class action cases. You were deposed, I'm sure, as well.

Starting point is 00:00:47 Yes. What can you share with everyone about just your, I don't know, what, I mean, you obviously can and can't share certain stuff. What can you share about the cases, your thoughts on them? Where does this go? Like, what is your whole take on this since you were directly involved? Well, I mean, whether or not, you know, you agree or disagree with the lawsuits, they are there.

Starting point is 00:01:09 And, you know, obviously one of them has already found a verdict. So, you know, now we have to deal with that in retrospect. And I think that makes me take the perspective of why did we end up with that verdict? And ultimately, some people are like, oh, the judge might've missed this or the jury misunderstood that. But the game's over. It's an L. There's a big one in the L column there instead of in the W column. And now you've

Starting point is 00:01:41 got to figure out, okay, what happens in the next game? And the next game is motions and appeal and things like that. But ultimately, it boils down to, you know, I think when anything like this happens to you, you can't just take, you can't take the victim perspective. You can't say, oh, this happened to me. Because if we look at it and say, okay, this happened with me, what did I do? What was my part in creating this or allowing it to proceed to the way it was? And this is a mirror that I think everybody in the National Association of Realtors needs to hold up. Because ultimately, that's the foundation for this. I'm not attacking NAR here. Um, I'll, you know, there's two parts NAR, there's the lobbying part. They've done a fantastic job of doing great things for housing, for the industry, for fair housing, for, um, We have a great podcast on, on that portion of what you're talking about too. Yes. Right. You, you name it. And I mean, you, you could say, wow, okay, high five on that NAR. And then you have the other part, which is the membership base. And then, I mean, let's call it what it is. I'm

Starting point is 00:02:50 not going to say anything that anybody doesn't know here. There's been a significant amount of scandal. There's even more today. The president abruptly resigned. Who knows why? I'm sure somebody does. Obviously, that resignation was abrupt for a reason. But you've got the way that realtors are viewed by the public. And then you also have, how does the transaction work? I can't tell you how many times I spent defending the industry to Wall Street analysts. And a lot of these people were taking it on face value and saying, why does the industry operate this way? Wouldn't it be better, easier, different, more beneficial to the consumer or whatever if it operated this other way? And you're like, well, it's governed by the NAR. And they're like, well, why doesn't the NAR change

Starting point is 00:03:38 that? Well, there's a board of hundreds of people and there's a bunch of historical data behind this. And they go, well, what if it was wiped clean and it became, you know, blockchain and things like that tomorrow? What would be rebuilt in that manner? So you have to look at, okay, we're in an innovators society now. And is the, you know, yes, I think everybody accepts that this legislative aspect is important. You know, the government relations is incredibly important because we have to educate our, our lawmakers. They don't know what's going on in this industry.

Starting point is 00:04:14 They're just listening to the rhetoric or the stories or what have you are making assumptions. Great. Do that, but go tell the public the rest of the story. Right. And I think that's where we've fallen down on the job. One, we have no, we've got no barrier to entry in this industry. You know, you can, in some places, you can get your real estate license in just, you know, less than a week. And in others, it takes an extensive amount of time and it's a lot of work. But why the inconsistency?

Starting point is 00:04:45 Why do we have different barriers to entry here? And why do we have 4 million houses being sold by 1.5 million people? I mean, that number doesn't make sense to me. And obviously, we know the Pareto principle here, the 80-20 rule, or even the 90-10 or 95-5 rule here where we have a substantial number being sold by the people in that very rare air, that small group, which means the more you go down, the faster you get to mediocrity or to just somebody who's kind of winging it for crying out loud. So it's turned into a membership-based industry instead of a value and quality-based industry, if you ask me. So I think we're fighting against that and we've

Starting point is 00:05:32 done a poor job of doing that. And that's the story that they've somewhat outlined essentially in the case is just how compensation is, the rules that are in place, et cetera. I mean, your comment's not wrong. I mean, the rules that are in place etc i mean to you know your comment's not wrong i mean the rules are set by the national association of realtors which are set by the membership because that's who's creating policy you know i mean our industry is and has done and has put itself in this place i personally don't agree with the way this was portrayed and i understand this probably better than most but we did end up putting ourselves in this position. It is industry rules and policies that have got us to this

Starting point is 00:06:10 particular place, whether intended or not. Right. So James, let's take a look at this from a leadership perspective. Okay. What does a leader do when, let me ask you this. And we were talking, you know, in the green room before this what happens to a football team when they lose they have a losing season people get replaced people get replaced coaches get fired coaches get fired a lot of team members get fired things like that okay so i mean the reality is somebody has to admit fault in this, even whether or not, you know, here's the reality that the jury found a certain way. Okay.

Starting point is 00:06:52 And you could say this team beat this team in court. I mean, that's just, that's the reality of the situation. That's a fact. So why not say, okay, industry, you you know this thing is screwed up and do we hold up the mirror and take you know accept the responsibility for that um i don't think a lot of people are accepting the responsibility for the w and the l okay i mean what's the the first way to move on and do something better is to move past your deficiencies in the past, find your weaknesses and repair those weaknesses or whatever it might be. But ultimately, that at the same time, you know, I believe in this little word called accountability. And, you know, I want to see the industry get better because

Starting point is 00:07:54 here's a question, James, you know, you have a young child. Would you love for your child to grow up and go, hey, dad, I want to be a realtor when I grow up. And here's why. My hero is a realtor. I mean, I don't hear that happening. No, but as a third generation in the industry. Yeah, I do. I think it'd be interesting for her to continue on that.

Starting point is 00:08:19 My grandfather and my grandmother and both my parents. And like, I hear you on that. The industry doesn't. I said this the other day when I was chatting with the new CMO at NER, I said, nobody, I'm going to piss off a lot of people here. Nobody gives a shit about the word realtor. They just don't. True. Like buyers and sellers just genuinely don't. And I'm not saying that that's not something that we're a partisan organization. But what I shared was I said, I think we need to be rethinking about instead of advertising the realtor brand so much, why don't we advertise consumer stories? Buyers that couldn't have got their house had that agent not spent 65 hours negotiating

Starting point is 00:08:58 a contract and their realtor helped them do that. But it's the buyer sharing the story. It's not about the agent. It's the buyer that's actually a real live buyer who went through a very crazy circumstance that finally got into a house to build. The only way that most Americans make generational wealth is through owning real estate. To me, it's just we've missed it. We have so missed understanding how to truly get in the minds and hearts of the consumers and we not only lost

Starting point is 00:09:27 them going on a rant we not only lost in the court we lost in the in the in the public perception as you know adam my wife is a you know as a investigative reporter for cbs we got crushed crushed right after we had no pr campaign to back it up. We had no PR campaign talking about what we do. And every headline since last year's scandals have been just hard on, on industry that works hard. But part, part of why we lost is the public's perception of what we do as an industry. Totally.

Starting point is 00:10:00 I mean, so like we lost before, during and after, um, because we haven't anchored into what I think we've all sort of echoed here, which is that you can't lose sight of the human beings who buy and sell houses. At the end of the day, that's who we serve. And you might have shareholders or be publicly traded or whatever the journey that you're on is but the companies offices agents who never lose sight of the fact that who we serve is the human being in the transaction those companies will be

Starting point is 00:10:35 fine regardless of the changes that are going to permeate this industry and we'll probably have more in the next 24 months than we've had in a long time but the ones who never lose sight of our north star or you know insert your analogy of of choice there uh that those are the ones that will win in my opinion well and and obviously remax settled their settled it's almost settled settled their case at least it's in the process of being settled so you know we'll see if they look like the hero in all of it um it and anywhere as part of that as well. Where do you think we are 36 months from now? Give us your crystal ball

Starting point is 00:11:11 of what you think the industry will look like. That's why I wanted to have lunch with Elon Musk, James. What's Adam's view of the next 36 months? He knows, okay? I was going to go on Twitter and ask him, or on X, whatever it's called. What's Adam's view of the next 36 months? brokerages, I don't necessarily think that is going to change a whole heck of a lot. What I think is going to change is the buy side. And I think the commission, how the buy side agent justifies their value, I think a great deal of that justification is going to come down to the consumer being better marketed to and understanding the value of the buy-side agent. James, I know you've done a great deal of work on that.

Starting point is 00:12:08 And I think you're doing a fantastic job on it. But ultimately, what it's going to come down to is let's take in this really busy blackboard that we've written all of what, you know, here's the 192 things a real estate agent does and throw it in your face. By the way, my cousin's going to buy a house, so I'm going to show it to him. Things like that. And let's get rid of all of that and rewrite it and say, if we were to position ourselves as a very professional industry in representing purchasers for the sale of real estate, what would that look like? And I think a lot of that is going to be rewritten for us here in the near future. I think the DOJ and the injunctive relief within the lawsuits are

Starting point is 00:12:49 going to provide a great deal of that. We've heard the plaintiff's attorney has described that. And I've heard it from two different sides. One of which is, if you talk to certain real estate people, they're like, oh this dirty rotten guy doing these things. And other people have gone, you know, thank God somebody is updating the industry. But, you know, you choose with everyone. I'm not going to pick a side on this. I'm just telling the truth of what I see. You know, I'm witnessing here and not judging, but ultimately it comes down to how good in the next 36 months can we do about sharing the value in the industry in order for the consumer to appreciate that person representing them. And then if that is

Starting point is 00:13:35 really, really good, that person should be able to ask for and receive their due compensation for that based upon that delivery of value. So, you know, 36 months, I think that buy side is going to be reset. I think, you know, like we all hear this word decoupling, I think we're going to have decoupling vertically in the space because realistically, I have yet to hear somebody go, I get the best value out of national, state, local, and MLS in this value stack that I think has just been created over time but never reset with the evolution of society. So, I mean, do you really need all of those different things? Or, you know, why don't we have one MLS, for crying out loud, that creates infrastructure instead of fiefdoms, you know, and stuff like that. And I'm making some MLS people unhappy with that.

Starting point is 00:14:29 But the reality is you were invented in 1907. So let's catch up with this and say, how should this be done in 2027? Since that's 36 months from now instead of 1907. I mean, that's a that's kind of a gap folks yeah a bit of a gap yeah so um i mean look what's happened since then for you know we're talking about you know putting people on mars and growing artificial cows so we can feed them and stuff like that so you know shouldn't we shouldn't we update the 1907 rules or whatever it was? It's a fair comment. I mean, there's, I think, what, 400 and something MLSs still across the US? And I've been in this my whole life, and I'm just going, I can't sometimes just go, how are we still there?

Starting point is 00:15:16 This little podunk town has their own MLS. I'm like, look, this stuff's got to change. But to your comment, sometimes people are dry kicking and screaming into the future. And that seems to be where we're going to head. Let me ask a qualifying question on that 36 months. So are you saying that over the next 36 months, you feel like it's going to be an evolution? Or are you saying over the next 36 months, it's going to feel more like a revolution for residential real estate? I think it depends on your perspective, Keith. I think if you are willing to change and want to, I mean, listen up folks, if you're in the real estate space and you want to be here in 36 months, it's time to take some chances and get out there and help the

Starting point is 00:15:59 evolution of this thing where if you go kicking and screaming like james said then yeah it's going to be a revolution it's going to feel like a revolution right yeah yeah it's good that's good perspective yeah so uh we'll wrap up with this talk to us about uh area 15 ventures so you uh you you you left as ceo and i think it was apr of 2022. If I got that right now, you've got this area is a venture fund, correct? Yes. Yeah.

Starting point is 00:16:29 No, is that a play on area 51? Like how'd you come up with area 15? I got questions right out of the gate. Okay. Are you, are you a, a UFO guy,

Starting point is 00:16:39 Keith? I mean, I could be, it depends how much money you want to put in my next venture. There you go. All right. So area 15. So a couple of things at play here. First of all, area 51, yes, it's a play on that because it's something we've always been fascinated with. But weird story, Keith. So in Colorado, and we're located in Colorado, we're in Castle Rock, Colorado, about 30 miles south of Denver. They're hunting areas

Starting point is 00:17:05 and they're labeled by numbers. This little area right here actually happens to be area 51 in the hunting adventure. So, you know, little weirdness, small world thing. We named it before we knew that. My brother came out and hunted turkey out behind our building here one day. And he's like, Hey, this is area 51. I'm like, no, it's Area 15. He goes, no, this is really Area 51. So kind of an interesting perspective. Now, 15 is Dave Linegar's favorite number. So that's how we picked up Area 15. Gotcha.

Starting point is 00:17:38 And so it worked both ways. But yeah, what we're doing here, James, to answer your question is we're basically investing in, you know, different types of organizations. We love franchising as you do. And so we've got two food franchise brands. We have Port of Subs, which is a 53-year-old sub sandwich company. I know who it is. They're huge.

Starting point is 00:17:58 Yeah. Yeah. So we own that. Who hasn't been to Port of Subs before? Well, if you live in these other 43 states you might not have been port-a-subs yeah but uh we have three in the las vegas airport by the way so make sure you get to one of those um but we're we're expanding that nationwide now so we bought that company a year ago and now we're blowing it up with selling territories around the country

Starting point is 00:18:21 uh we've i mean we've got a line to sell those. So it's great. Everybody wants to be part of that. And then we also have a startup called Daddy's Chicken Shack, which is a fried chicken sandwich concept. Really tasty fried chicken sandwiches. We've sold 13 territories around the US in that, and they're all being developed right now. And then we have investments in a whole bunch of other different businesses and assist with other businesses that the Linegar family own. So we have Harley-Davidson dealerships and other motorcycle companies and what else? Arabian Horses, all sorts of other different things. All the expensive shit.

Starting point is 00:18:59 I know about the horse stuff, man. Jesus. Like, wow. Oh, yeah. You're a horse family, aren't you? No, I signed on to a horse family that was no i didn't wasn't fun funds of the horse family horses wow it's like a boat there's just they just it just eats money anyways don't get me started so that's it's pretty that's pretty

Starting point is 00:19:19 awesome so dave is involved in a lot of other stuff and you guys are doing franchising still which you obviously know better than most. That has to be fun. Is Porta Subs in California though, right? I'm pretty sure I've seen it here before. I've eaten at them before. Yeah, we're in California. I mean, it's founded in Reno.

Starting point is 00:19:38 Okay. So, I mean, it's interesting because there's like one Porta Subs for every like 15,000 people in Reno. So we have a lot of market density there yeah but a lot in vegas a lot in arizona um california washington idaho there's one in brentwood california shout out brentwood oh there you go over there for a second our producer is telling me they don't have kombucha on the menu so it's hard to track down i just wanted to make sure that our everybody knows our producers in my ear making fun of me for kombucha b-y-o-k bring your own kombucha yeah we have all right adam you could you could uh kind of do something with the pickles there if you like your vinegar

Starting point is 00:20:14 okay you know what seriously judge away okay i'm being very abundancy mindset by sharing things with you i'm being vulnerable i'm trying to give you pickles james i mean i know i know i know all right so let me ask him the closer let me ask him the closer. Let me ask him the closer. Go. And I always ask this, but I'm very excited about your answer because you have lived and breathed in this space for so long. So and thought through the lens of this question. So if you were an agent or a broker, what's the one thing you would implement today to set your business up for 2024? I would say omnipresence. I mean, so many people start hiding when difficult times occur. So you have leaders and you have hiders, in my opinion. Leaders lead. Those are the people that are omnipresent and they're delivering value constantly,

Starting point is 00:20:58 even in the storm. And then you have hiders and they're waiting for the storm to pass. Now, the second question you should be asking me is how should we be omnipresent? And I've heard it said before on your show, you should be on video. But ultimately, it should be that you should be on video talking about them and being very kind and delivering value, giving your best stuff away. By the way, agents, don't keep your best stuff under your vest. Everybody knows what it is. They just want you to give it to them and then they will come to you and pay you back with that word we heard earlier, reciprocity. So I would say to be omnipresent as a kind

Starting point is 00:21:32 giving leader. Great answer. It's great. I cannot even begin to imagine how much that resonates. Keith and I've had these discussions with other leaders in the industry who are like, just keep your mouth shut. And I'm like, no, we want to get out there and talk and just have a conversation and get information out for people. So Adam, awesome to have you on. Can't wait to have you back on. I know you've got some other things in your pocket that you're working on.

Starting point is 00:22:01 So we'll have to have you back on the show to talk about some of that stuff. I know, I know, I know. But did you want to, did you want to make any breaking announcements right now here on the real estate? We've had enough breaking news today. So let's leave that,

Starting point is 00:22:14 let's leave that out of it. But Adams will be a really fun one when he wants to come out. I need to go read the comments on your social media posts today, James, and see what it's, it's pretty good. It's pretty good. I just would

Starting point is 00:22:26 really like the industry to stop with the llama drama for a bit. It's getting better, buddy. We're going to have a reality show here pretty quick. There's a bunch of them. Yeah, but none of them are like NAR unplugged or something like that. Oh my God, no.

Starting point is 00:22:41 No, no, no, no. Behind the scenes, in the courtroom, whatever. I don't know, whatever it is. No, no, no, no, no. Behind the scenes in the courtroom, whatever. I don't know. Whatever it is. Well, it should be fun. That'll be for the, that'll be for the next episode. So all right, my friend, thanks for being here. We'll have you back soon. Can't wait to hear about some of the new stuff you're doing. So thanks. Thanks for the time, buddy. Субтитры сделал DimaTorzok

Start With A Win - Diving Deep into Real Estate Turmoil: Lawsuits and the Future of the Industry

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