A real estate attorney and title insurance company owner, Elias decided to expand and purchase a RE/MAX franchise–in the middle of a pandemic. Find out how they managed a successful virtual transaction.
Tracey Velt:
This is Tracy Velt, editor in chief of content for REAL Trends. In this special edition of the REAL Trending podcast we’re speaking with real estate leaders about how they’re leading. Today’s episode focuses on buying a franchise remotely. Please welcome Adam Elias, owner of RE/MAX Celebrations in East Windsor, New Jersey.
Adam Elias:
Hey Tracey, thanks for having me.
Tracey Velt:
Yeah. Thanks for being here. So let’s talk a little bit about your brokerage and how you’re handling the pandemic.
Adam Elias:
Sure. What would you like to know?
Tracey Velt:
Well I know that you recently just franchised, so tell me a little bit about that process and how the pandemic played into the whole transaction.
Adam Elias:
Certainly. So I’m actually a attorney by trade, I’m a real estate attorney in central New Jersey. I was approached some point in February by one of my top real estate agent referral sources, he was a RE/MAX agent, and he approached me looking for someone to help him invest in a new RE/MAX brokerage. By this point I’d already had my own law firm, I own a physical therapy clinic with my wife, and I also had a title insurance agency that I had started last summer, so I was happy to get my hands wet with another company, another venture, and I signed on board with it.
Adam Elias:
We started the process, I made the inquiry right away with RE/MAX, they got back to me within two days, got contacted by Greg Johnson with the franchise development over in RE/MAX, give me everything I needed to know as far as pricing, territory restrictions, and just when we were right about to put pen to paper really, by the next day, the State of New Jersey announced that they were going to shut down due to the rising COVID-19 pandemic.
Adam Elias:
So we put things on hold for a couple of weeks, we thought about whether maybe this was the right time to really be entering into a market, nobody was showing any houses, phone stopped ringing, it was pretty scary. But at the same time we looked at it as where’s the opportunity? You got to find the opportunities in these moments of crisis. I find that… I’m a big history guy, you look back at the 2008 financial crisis or the great depression, these types of economic downturns usually see opportunities in different ways. So we figured this is now the opportunity to maybe find agents who are not necessarily happy with their current situation, they may feel that they’re paying too much for brokerage, they’re not getting enough out of it.
Adam Elias:
And at the same time finding people in other industries who may be looking for a career change, looking to get on their own and support themselves. Maybe they’ve lost their jobs or maybe they’re realizing that their jobs are not going to be steady for too long, so now they need to make a jump. The real estate schools, I believe their admission jumped increasingly, tenfold, during the time of the pandemic when it first started. So we felt that this was a good opportunity to move forward.
Tracey Velt:
Okay. And just I want to be clear, so you said in August, 2019 you started your own title insurance agency, Addison Abstract, and named after your firstborn child.
Adam Elias:
That’s correct.
Tracey Velt:
And so then you’re basically through that title company you had a realtor who was your number one referral source, and that started you thinking about starting a brokerage and perhaps using your title insurance as an ancillary service to that. But you also mentioned Motto Mortgage, so tell me a little bit about what impressed you with Motto in why you chose RE/MAX?
Adam Elias:
Right. So I contacted Greg again, probably by beginning of April to let him know that we were going to go ahead and go forward. He had to do the credit check and send me the franchise disclosure documents and all that good stuff. And as I was waiting, there’s a two week period that you have to wait before you can pull the trigger after getting those documents, during that time I learned a little bit more about Motto Mortgage, I didn’t know much about it. I found that it was pretty intriguing that the RE/MAX had developed a mortgage brokerage in a box as they call it. And I thought that this would be a pretty smart idea to compliment with the RE/MAX. I asked Greg to put me on the phone one Friday, I think it was Friday, May 1st, put me on the phone with their actual franchise development team.
Adam Elias:
I got contacted, they said, “We’ll get back to you on Monday for a call.” I said, “No, I want to talk today. I don’t want to wait through a weekend and change my mind, I want to keep that momentum going.” So I got the call that same day, got the franchise disclosure documents for Motto Mortgage. I found that this was a no brainer. I even asked the franchise team, I said, “Why don’t more RE/MAX owners have a Motto Mortgage operating out of their office?” And he told me not a lot of RE/MAX owners are really entrepreneurs. I like to think that I’m an entrepreneur, I saw the value in it and I figured let’s just go forward and get both at the same time, let’s get them both up and running together.
Tracey Velt:
Okay. And so you are not the broker of record for the RE/MAX franchise, correct? You’re the owner?
Adam Elias:
Yes, that’s correct. You have to be a real estate agent for three years in New Jersey to be a broker. I just passed my real estate exam on Thursday but I do not have three years under my belt. But I was able to get in the last two months my mortgage license and so I’m also the broker owner of the Motto Mortgage.
Tracey Velt:
Okay. And so tell me a little bit about how you structured the franchise then. It looks like Daniel Gomez is the broker of record, is that correct? And you also kind of rolled in another brokerage it looks like, into the RE/MAX Celebration. So tell me a little bit about how that worked.
Adam Elias:
Sure. So Daniel Gomez is a broker that I knew locally from my law firm, my law firm’s based out of Perth Amboy, New Jersey. Mr. Gomez had operated his own boutique real estate agency called Amboy City Realty. And I know that he was looking for making a change, his agency was down to about two or three agents, he was hit hard by the pandemic, he didn’t have the resources at the time to really rebound quickly. So I approached him and said, “I think we both have common goals here, and I think you could really provide some serious value to the RE/MAX brand and vice versa.” And for him it was a no brainer. He has a son that got his real estate license about a year ago, he wanted him to join a good brand with good training and a nice framework behind them. So I think the next day we signed the paperwork and we had him as our broker. That was the last piece of the puzzle.
Tracey Velt:
Okay. And so how many agents does your office have now currently?
Adam Elias:
As we stand today I believe it’s 15.
Tracey Velt:
Okay, great. And what are your goals? Because you’re an owner, obviously you have several different businesses, you’re an entrepreneur, so what are some of the goals you have with the franchise going forward?
Adam Elias:
My goal is to build a real estate brokerage that really emphasizes the value to not just the agents, but also to the consumers. I think that in order to survive in the real estate market you really have to have a value proposition that sets yourself apart from other big house companies or small independent agencies. So my focus is utilizing, leveraging, the different companies that I have put together between the RE/MAX, the Motto Mortgage, I’ve also established a joint venture title company to kind of tie that up. And I’d like to be able to give the value back to the consumers.
Adam Elias:
I think the biggest thing that got lost in this industry was the kickbacks schemes of people looking out for each other and not really looking out for their clients. And I think that over time that may make everyone’s pockets a little fatter but it’s not really going to be sustainable in the longterm. So I find that if you give the clients that one stop shop experience, and then also give them the value for utilizing a full one stop shop experience, that they will be more likely to refer other people to you. And those are the clients that we really want at the end of the day, we want good clients that are going to refer their friends and their families or coworkers within their communities. And that’s I think the best way to grow.
Tracey Velt:
Okay, great. So let’s talk about you did this virtually because of COVID, obviously you had to take special precautions, so tell me how that worked and what that process was like?
Adam Elias:
So when we started the process of getting the information, I mean Greg and I were on the phone almost every day as if we worked together in the same office. It’s kind of an advantageous to start a business during this time because people are sitting at home, they’re looking for reasons to walk away when their kids programs are going on, over captive the entire house, they’re looking to step out and they might have a little bit more of a candid conversation, a more informal conversation than they would in an office setting, and they’re more readily available to answer the phone throughout the day. So we’re able to get the answers that we needed a lot quicker to get up and running.
Adam Elias:
As far as with the agents themselves, I mean it’s just a matter of Zoom calls, phone calls, just there’s a lot of common ground to be built. Everyone’s in the same boat, we’re all having the same struggles, so it’s easy to capitalize on that when we called other agents to check in on them. I think that Zoom played a huge role for us, having Zoom chats where we have two or three agents sharing their energy, the energy is bouncing from one wall to the other, I think it’s contagious even through a computer bandwidth. And I think that’s helped us a lot with getting people amped up about making that change and taking this time to take their career in a new direction.
Tracey Velt:
Okay. And do you plan on growing RE/MAX Celebrations or do you plan on being a boutique firm? Tell me about your recruiting process and what you’re looking to do from that perspective.
Adam Elias:
Sure, so we would like to scale the RE/MAX, we’re hoping to get maybe 30 agents by the end of this year, maybe hit 50 by the end of next year. We are looking at space already for a second office that a few of our agents would prefer to work out of given where they live and their experience and their network. Also in central Jersey, but New Jersey for as small as it is, it’s very densely packed so you have to really spread yourself out from different county to County, not so much as to travel from one side of the state to the other. So it’s not uncommon to find some RE/MAX owners with four or five offices within one part of New Jersey. So we already are making plans for our second office. For me, the sky’s the limit. I don’t want to make it small, but I also don’t want to have 400 agents and just make it the names game and a numbers game, I’d rather have agents that are bringing quality to the table.
Adam Elias:
The one thing I love about RE/MAX, and you had asked before why RE/MAX? RE/MAX is I think the only real estate agency out there that really looks for the full time agent. I think most real estate companies are about the numbers, they’re not really too interested in what the production is. And for me the value that I give the agents is that I’m willing to pay for a lot, invest in a lot, to keep them busy, whether it be investing in stronger lead sources, whether it’s to get the best CRM that you can have, investing in their insurance, subsidizing some of their costs and their fees. But at the same time I expect them to produce.
Adam Elias:
I look at each agent as an investment and I’m going to invest in you, I expect to see a return on my investment. And like any other investment, whether it’s stocks or real estate or anything, if my investments not performing then it’s time to reevaluate it. But that’s what I tell the agents when they come in, I expect you to produce, I’m not looking to have people just hang their license here and kind of a RE/MAX brand behind them, I want them to contribute and build my office with me.
Tracey Velt:
Okay. And so you’ve got a lot going on all at once with the new title, I know you already had title, but it looks like you rebranded that, is that correct?
Adam Elias:
That’s correct, I opened a second venture. So our RE/MAX tag name is Celebrations. We have RE/MAX Celebrations, Motto Mortgage Celebrations, so I opened Celebrations title to tie it up.
Tracey Velt:
Okay. So let’s talk about business planning a little bit. How are you kind of structuring everything to stay on top of everything that needs to be done with the ancillary services and building the brokerage, and then encouraging the agents to use the services that you have?
Adam Elias:
That’s a good question. So for me, I’m here, we have a space that we lease that we were able to jump in on a sublease. The company had bottomed out and we were able to get a really good deal on some office space, about 4,000 square feet, where there’s three separate spaces between the three businesses to meet compliance. And I’m able to bounce between the three, I’m here about three or four days a week, it’s about 10 minutes from my house in East Windsor. So I’m able to day to day monitor what everyone’s doing. My job primarily is to put the right people in place. I can’t micromanage three businesses and expect it to go where it needs to go. I need to put the right people in and I’m hiring people left and right to make sure that people that have experience, people that know this business that can do it with their eyes closed, can bring in their experience and build it up.
Adam Elias:
And in the meantime I’m working with them to share some of my ideas, some of my experiences in other industries that I’ve been in. I think at the end of the day, opening a businesses is opening a business, but you have to make sure that you know what your specific business actually needs. But in terms of promoting from within, I told every agent when they started here that I’m not going to be that guy who tells the agents you have to use the mortgage company that’s in house, or you have to use the title company in house. I think a lot of brokers do that, I think it’s a mistake, it alienates their agents, nobody wants to be told how to do their business. These they’re independent contractors and they have the right to develop their own relationships that they see fit. I find that it’s my duty to build a title company or build a mortgage brokerage that the agents want to work with, that they want to refer their clients to, and that’s what I’m always striving to do.
Tracey Velt:
Okay. And my final question is really opportunities. Where do you see opportunity overall for real estate brokers in the coming year?
Adam Elias:
So I think it really boils down to your geographics. I mean right now here in New Jersey it’s a war zone. We have a lot of New Yorkers who are really putting through that exodus across the bridge, they’re coming into New Jersey, they’re second guessing why they’re paying so much in rent a month. If they’re not required to be in New York city, if they don’t need to be working there. And they’re willing to pay top dollar for New Jersey real estate over the asking price. We have a lot of bidding wars going on because they don’t have enough inventory to keep up with both the New York demand and younger families in New Jersey who are growing, they’re getting married, they’re having kids. So there’s a lot of demand, there’s not enough houses. And at the same time slowly but surely we will see an increase in listings as people tried to leave New Jersey who have been here their whole lives to escape the higher taxes and to find other opportunities for themselves.
Adam Elias:
So I think either on the listing side or on the purchasing side, we have a long way to go here in New Jersey. And I think even within New Jersey, for example, I’m in East Windsor in Mercer County located just about 20 minutes outside of Trenton, not a very heavily populated area. When you start going into South Jersey I think people are starting to see that New Jersey has a lot more to offer than North and Central and they’re slowly moving down South. So I think that a broker owner who finds that their communities, they should really start to step up and actually take ownership of their communities. I realize that now that we’re virtual many agents will take listings and take purchases all throughout the state or given region that they’re in. And I think that they can benefit from actually uniting with their community leaders and focusing on they’re actually building the community that they have. And they can draw in more talents from the agents that are in those communities and bring in more purchasers into their neighborhoods as well.
Tracey Velt:
Yeah. I’m in Florida so we’re getting a lot of the New York buyers as well. So yeah, I know exactly what you’re talking about. Well Adam, thank you so much for joining the REAL Trending podcast, I appreciate you taking the time to speak with us.
Adam Elias:
Thank you for having me.
