Welcome to Investing Across Borders with Lauren Cohen. Every week she will share valuable information that you need to know in order to successfully invest in real estate and other business endeavors in North America. We believe in helping clients invest, live, work, and play across borders. And now, your host, Lauren Cohen.
Lauren Cohen 0:26
Good morning, everybody from sunny South Florida. I’m Lauren Cohen, international legal and real estate expert. And the host of investing across borders, the podcast where we teach you how to invest live, work and play across borders. And I’m really excited because this may be my 52nd episode. So you Randall miles are my 52nd guests. So we’re celebrating a new year with investing across borders. I remember a year ago when I was like, Okay, I’m gonna do this, I’m gonna do this. And I’ve had so much fun doing it. And I just want to acknowledge my sponsor, Len dye, a company out of Israel that offers foreign investor loans to Canadians, Israelis, Brits and Australians investing in real estate in the United States. Amazing, right, Randall. Anyway, I am here today with a wonderful guest, who is on the board of EXP he’s actually the chairman and CEO of FCM Capital Group, which is a global transactional company. And he sits on the board of EXP world holdings. And I met Randall in New York City at sea five event after the fact called exp commercial live. And we were chatting and I was asking Stephanie Gillison, who’s the vice president of EXP commercial when you’re coming on my podcast and Rhonda said, you would be happy to be on the podcast. Okay, so here we are just a couple of short weeks later, it seems like yesterday, and I want to thank you for joining us, please introduce yourself and give us a little brief background on who you are.
Randall Miles 1:58
Sure, thanks, Lauren. And it’s great to be number 52.
Lauren Cohen 2:02
It’s actually like number one all over again.
Lauren Cohen 2:05
Each and every time right? My name is Randall miles. And I’m really pleased to be here I am chairman and CEO of sem Capital Group, a global transaction. And strategic advisory firm served on several boards that include exp world holdings as vice chairman and chairman of the audit committee, and have historically and continue to sit on both public and private equity backed boards of directors have a long history on Wall Street, having run large investment banking, and then a groups at bulge bracket and middle market firms, and have been chairman and CEO of public and private equity backed firms, multibillion dollar companies three or four times. So this is an interesting point in my career, particularly as it relates to what to EXP and helping manage the significant growth that we’ve seen over the course of the last several years. So anyway, it’s a pleasure to be here. I’m thrilled to be asked. Thank you. It’s a pleasure to have you. Yeah, I joined exp, it’s almost two years ago. And honestly, it’s been a life changing experience for me, because I’ve had my real estate license, as most of my listeners know, for 14 years. And until I joined the XP, I literally left it hanging, I didn’t even do anything with it. And now I think I have 26 referral agreements out there, with realtors, literally all around the globe, not just in the US. But in Canada, and Mexico, in India. I mean, you name it. And it’s been life changing on so many levels and being able to collaborate with other realtors and being the chair of the International Investment Committee for exp commercial and having an opportunity to teach exp years about international investment, and how to work with international investors. Because a lot of people and I’m sure you can attest to this having worked across the globe, are afraid of things will they’re afraid of things like we mentioned in your backyard, but they’re really afraid as soon as they’re dealing with stuff that’s outside of their comfort zone outside of their state outside of their country. And investing across borders and considering moving your capital across borders is often a very big fish for them to fry. And they’re afraid of it. And the fact is that there’s so much opportunity.
Lauren Cohen 4:19
You know, there’s extraordinary opportunity, but you know that fear is also a healthy thing, right? There are such significant differences, country to country jurisdiction to jurisdiction as it relates to employee law, investment considerations and the like. So like anything else approaching significant opportunity with a little bit of skepticism to ensure that you do your appropriate homework and due diligence and don’t step into a situation that may turn out to be entirely different than what you otherwise anticipated. That having been said whether it’s you know, investment opportunities or life opportunities, right, it involves taking a little bit of measured risk, assessing the situation and having the fortitude.
Randall Miles 5:00
At a time and place that you can afford to do it, to take advantage of those kinds of things. And we find ourselves at exp, for example, at a remarkable time in the context of an ability to transform our business model from a domestic North American focus for so many years, to you know, going back two years ago or so now expanding our footprint, to what now includes 18 companies globally outside of North America and continuing to to grow a pace. Yeah, I’m excited to see what’s next. Because it just keeps happening. And I love having partners. And I mean, my favorite country, Israel, my home country, Canada, literally all over the world. I’ve partner in Australia to a couple partners in Australia, in India. And it’s just it’s an amazing thing. And it’s an amazing story, because the foresight that Glenn had to develop this. I mean, it’s unprecedented. And by the way, he’s Canadian, just saying, some of us Canadians have pretty great ideas, I got to say, so I was gonna ask you a question about that. So measured risk. You know, one of the things I find, and a few weeks ago, I was interviewed by the Canadian Real Estate Wealth magazine, and the interview was supposed to be about the top three things that people should be careful of when they’re investing across borders. And instead, I said, Well, you know, the reality is, there’s so many, and I created a top 10 sheet. And actually, that’s what I spoke on when we met in New York, the next day at the event was the top 10 things to avoid when investing across borders. And one of those is to run run before you walk to walk before you run. Because so many people like you said, they’re just like, oh, it’s one or the other, they either have no fear, and they run and they don’t think and they don’t do their due diligence, and they don’t hire the right team. And they just think everything is the same when you’re investing in another country. And then Part B of that is that when they do it, they just think that they know what they’re doing. And they don’t have that level of measured risk, and due diligence and precautionary measures that need to be taken to do it the right way with a strategy. And that’s what I talk about every day with my clients. At the end of the day, I don’t think exp decided to expand into 18 countries, on a whim. We brought a team, you know, in the team piece is so important. And one thing I wanted to interject on agree with everything you’ve said, and it’s so important when you’re taking on a new opportunity that has the potential for some significant risk is aligning yourselves with the right subject matter expertise, whether you hire it, whether you partner, whether you use advisors, whatever else it might be, because there is a great unknown. And if you’re entering a new market that is foreign to you, and you don’t have boots on the ground, there’s so much you don’t know about the local landscape and how to traverse that right. So having the right team and you’re right, Lauren, I mean, we did not undertake international expansion on a whim. exp had been growing quite quickly for a number of years. And we reached a point two, two and a half, maybe three years ago now where we felt that we had reached a point of scale, meaning efficiency, effectiveness, key expense categories, and absolute terms falling as a percentage of revenue. That allowed us then to think more broadly about the kinds that things we could do to expand our footprint, which included international growth, commercializing our for Bella platform, affiliated services and the like and some of the things in there. Can I stop you for a moment because most of my listeners don’t know what Volbella is. And I’d love to share that because it is such an amazing platform, especially especially during COVID. Because we didn’t miss B, exp actually expanded beyond I think its own plans, because COVID Put us online and the company is a cloud based brokerage. So because of that, it was poised like I remember when COVID first started, and Craig, my partner told me said, Take invest in any x pm like that, oh, no, you know, buy stock, whatever. I don’t know, I think it was 11 or $12 at the time, right? And it went up and I did buy not 11 or 12. But it went up to like 160 and then it split. And it was like an unbelievable the growth in this company. And I think that it exceeded expectations. Because there were circumstances that nobody anticipated that put business online and gave exp a boon. I mean, what do we have 68,000 agents now, worldwide, we have about 68,000 agents and roughly about 2000 employees and important to note that through the history of EXP, which is 11 years now, we have never had an office. Glen Sanford, the founder and CEO does not have a physical office. Now. We have some shingles in different jurisdictions that might require something like that. But nobody has a physical office.
Randall Miles 10:00
So we have operated virtually right from the beginning. We use the verb Bella technology platform to do that. Supplemented by things like work book by Facebook and things like that. But I love it for Bella platform in particular, yeah, allows us to operate effectively initially across North America and now across the globe. It’s vital insofar as allowing us then to offer a an operating platform that maximizes our ability to pay real estate agents that maximizes our ability to be agile in the face of changing market conditions take COVID as an example, where we like, unlike others didn’t have to make the heavy cuts that some did. Now, we reacted quickly and did have some small staff reductions and that kind of thing, because we were staffed for really accelerated growth. But the kinds of things that we had to do in response were significantly less than some of our competitors. Yeah, and part of what Volbella has allowed us to do, and I’ll come back, and I’ll better define that to directly answer your question. But I think to give it some context, we’ve been able to add 18 countries to our footprint during COVID. During COVID, Badie, we are poised to launch it pre COVID had this wait one moment, Randall. This is adding all these countries without ever during the time setting foot in those countries because we couldn’t travel. So we launched countries, like Germany and Israel and India and Mexico and Brazil, without going there to launch them. It’s unprecedented. That’s the power of rubella because it gives us an ability to collaborate across the globe, that collaboration transcends to agents in San Diego working with agents and in San Antonio, for example, to work out an issue or to take advantage of subject matter expertise, without competing with one another in a local office. Right. So it promotes collaboration in a way that I think is unlike any other model, the same thing is true on an international level. So we as you pointed out, to have been able to put a stake in the ground in 18 countries without having to incur the significant expense of having to send teams of people to go do it. So part of our model, part of our appeal, whether you’re in North America, or you’re in France, or you’re in Israel, or you’re in Argentina, or you’re in India pixum place, is the fact that you have access to the 68,000 agents and 2000 employees today on virtually a 24/7 basis for immediate access, you don’t have to go through a gatekeeper, you don’t have to get in line, you don’t have to get on an airplane, any one of a number of things you don’t have to do. So it allows us to work collaboratively, almost 24/7, which is very effective. We have found that in terms of our international expansion, that the market has welcomed that tremendously. So I would expect will continue to grow a pace and continue to add still more countries even before this year is out. Yeah, well, I’ve that’s what I’m waiting for. I love it. Because every time a new country opens, it gives me a new opportunity to share the information and the education that I love sharing. And the word collaborative, which you mentioned is just so key when it comes to exp everybody I’ve brought on. That is with exp has been so willing and collaboratively oriented. I think that if you join EXP and you don’t have a collaborative mindset, you’re probably not going to succeed. Because if you’re competitive, a friend of mine, who actually I’m speaking to right after you coined the phrase with her group called coopetition. I don’t know if you’ve heard of it, but I loved it. And that’s really what we do. Because not that there’s not competition, especially when you’re selling real estate, which I don’t do. I’m just a referral agent. And I love referring so nobody is competing with me, because there’s nobody else that does what I do, which is pretty fun and unique. But coopetition I see among the realtors, like a realtor, if a realtor needs a search polled in Tampa or in Atlanta or wherever they can reach out on workplace this amazing tool that we use that’s proprietary to EXP and they can put in a post and 20 people will respond being willing to share that information and not about how much can I make what are the it’s just like here, let me impart you with that information. And I love that because it doesn’t you know, I’m a lawyer. That doesn’t happen through with lawyers usually and it doesn’t happen with realtors because most realtors are only as good as their next deal. Now with exp every Realtors success drives the stock and we all own stock so we all succeed it’s a beautiful thing and that’s the that’s the power of our model right? An agent has an opportunity to make money in conventional ways real estate Commission’s has an opportunity to generate revenue.
Lauren Cohen 14:59
Share through inviting other agents to join the organization as an opportunity to earn stock rewards and an opportunity to trade, you know, a small amount of commission for stock if they so choose at a market discount. And what that does and what the power of so many agents being owners is help bridge would every CEOs dream is certainly in the companies I’ve run. I know it’s Glenn’s point of view and others, the Nirvana is getting your employees to act like owners. Right in the XP context, that’s very much true. So everyone has to stake if that agent in San Diego calls the agents in San Antonio or Tampa, wherever else it might be. They have a stake in their success, insofar as that next transaction contributing to our revenue, contributing to our earnings, and potentially having an impact on our market cap. It’s, it’s wonderful. And like I said, for me, it’s been life changing. I know in two days, I’ll be getting a check deposited in my bank account with my rev, share, check. And it’s fine, and it drives us. And there are, I understand that only about 60% of the people, the EXP Realtors actually participate in rev share, which is shocking to me. Because I’m like, How can you leave that on the table? Now granted, I’m a networker, I’m a connector to what I love to do. So it was a natural fit for me, you know, to build a network, and also to be a referral agent, which I originally way back, when I got my license, I thought I’m going to refer a deal here and there, I didn’t think I would be referring, you know, opportunities and clients, I had a client reach out yesterday, they want four Canadian referrals in four different cities in Canada. So now I’m going to have those, some of them I already have agreements with whatever. But it’s fun and exciting. And also, when you reach out to these people, you build another relationship. And that’s the key and you know, collaboration and relationships. People at exp really care about each other when I first went to sprint, which is, which was in July in DC, and met some of these people face to face like Stephanie, for example, for the first time, it was like they were old friends that we hadn’t seen as opposed just remember, we’re working in a virtual world. So sometimes we only see an avatar, and nothing more, we may see a picture, but we may not have the opportunity to be on Zoom. So it’s just been a really amazing experience. And that’s why I was so happy when you agreed to come onto the show and and talk about your experience. Now, I’d love to ask you tell me about some of the challenges, especially the serious challenges that we face, obviously, cultural differences and so on. When we are expanding, when exp specifically is expanding into a new country, what are some of the roadblocks and obviously not to share any private information, but it’s clear that there’s some countries that are more challenging than others, they have a different I mean, going into Canada was no big deal. Not that it’s no big deal. But it’s not as if you’re going into a completely foreign country with a completely foreign language, even though you’ll have to do everything in two languages to be in Canada. But going into India or Israel, just give us a little bit of feedback on some of the challenges and roadblocks that have occurred, please. Yeah, and the challenges, as you point out are considerable. And it starts with even before we talk about international, this is a company that has been growing by leaps and bounds. So if there’s anything I’ve pounded my table, my fist on the table in the boardroom about more than anything else, it’s perhaps ensuring that we have an infrastructure that looks every bit of five years out, so that we can continue to maintain our rate of growth, and serve our agents and our brokers and provide the tools that allow them to create the best practices possible. And so that’s the foundation both in terms of domestically and without that it doesn’t even give us an opportunity to explore things that are an international level. So now take that next step. Which countries you know, make the shortlist, which are most like the US in terms of underlying real estate markets, which are most like the US in terms of underlying agent relationship, regulatory compensation mechanisms, for example, which are the most regulated versus non regulated at all? So, you know, there’s a list a whole list of question after question after question that then calls the universe in terms of okay, look, here’s the low hanging fruit. We can get there in six months, because we’ve got half the puzzle solved already already. And here are those that may take more development time, 18 years, two years, whatever else it might be that include everything from you know, language, but where it really starts that the most important thing, despite all of those individual challenges and in all those individual markets, is finding the right team on the ground so that you’ve got local sponsorship, at the end of the day.
Randall Miles 20:07
And this is true in any market we serve whether you know, the first time we went into North Dakota or California, wherever else it might be, is having the right people on the ground who can both evangelize what it is we’re doing, and have the competence to do it. foreign markets are wholly different than the US as it relates to real estate. And educating those markets relative to the opportunity that exp represents recognizing that for them, it’s going to be a different way of doing business, for example, in the UK, agents are not 1099 employees, agents, you know, our employees, right, in the W two cents. So we had to try to find a way then that was going to bridge, you know, how they had historically operated in the UK, with how our model works in the US and the rest of the world. Right? So those are the kinds of challenges together with, Okay, well, how much capital do you need to have on hand do you have to have a physical presence, but it starts Lauren with who are the people on the ground who understand what it is we’re trying to do, who have the reach and the context of the relationships they have, who have the experiential base and have been doing it long enough, and have the respect for their integrity and subject matter expertise, that allows us to, to leverage their experience to help us open up a new market. So I think that what you just said is so is true of anything that you’re doing across borders, because you know, I’m obviously dealing with clients from multiple different countries. And they some of them are more resistant, let’s say to what it takes to get things done in the US. They’re like, No, I don’t need to do that. No, I don’t need to do that. Or they just tried to do a circle around things, cut corners, and it’s never going to work because you’re not going to get the same result. And you do need that team. And you do need people that have your back and have boots on the ground. And sometimes you also have to accept the fact that that team that you chose, may not be the right team, and you have to shift. And that was what you’re seeing the agility, the ability to shift the ability to change courses and accept when you’re when things are just not working, and move forward. And you know, rethink, revamp, revitalize, revise all of that kind of thing. And so I think that it just becomes so important because investing across borders is so appropriate when it comes to exp, as opposed to a smaller local brokerage, for example, where they’re really not dealing with anything beyond their local real estate market. And I think that what exp has done and certainly I run a mastermind, actually, for realtors, to train, tell exp peers make their business more international, non exp years learn about how exp can help make your business more international. And part of what I teach in there is that there are so many opportunities to build an international business as a realtor, real estate as a rule is local. Right? Traditionally, an exp, I think, has made it much more global in nature, which fits well with my model, because I’m all about going global. So it is it’s unique. But I also want to interject another point horse, I mean, you’re absolutely right relative to the opportunity to go global to explore opportunities and commercial to do a variety of different things that that an agent can pack as many tools into their war chest as possible to generate as much business and serve their clients needs. However, one of the beauties of the EXP model is you don’t have to be an international superstar, to find a homerun exp to use the tools and resources that we have and keep your business purely local. So there’s a harmony XP if you’re a local agent, sole practitioner, and all you do is sell a few homes a year, there is a homerun exp if you’re a superstar agent in a large brokerage and selling real estate all over the world, there’s the home of exp for agent influencers, who act as referrals and help effectively serve as our marketing arm. So it’s really quite a diverse model. And you don’t have to be all things to all people to find a home at exp to make a very good living and to have the resources available to you that you know, that are unlike anywhere else and to change from a linear real estate model to multifaceted multiple stream of income model. And that’s and also to build a retirement plan. Which I know most most Realtors never have retirement parties.
Lauren Cohen 24:47
And with exp you can build a retirement plan and actually, I mean so many people like Brent go although he’s not retired. He’s built such an amazing pipeline.But his income is such that he doesn’t need to work. He’s on the phone, you know what talking with his partners, one of which is me. And he’s just built an amazing, amazing team of I don’t know what it is now must be 17 or 18,000 agents. And that’s the kind of opportunity that exp presents. And again, a lot of my colleagues, I have one colleague who is international in nature, but she doesn’t have anybody in her line. She just sells real estate every single day. And that’s great. That’s awesome. And then there’s others like me, that aren’t selling real estate, but that are referring like you said, an agent influencer. And I love that because it gives all of us a home. And you know, when people are like, Oh, well, exp is this and the EXP is that and they hear this rumor and they hear that boom, I’m like, Look, why don’t you open your mind, and just consider the opportunity. It’s not about selling anything, it’s not about pushing somebody to do something, it’s about opening the door to a new way of thinking about real estate, a new way of thinking about how to do real estate, how to sell real estate, how to work with realtors, and how to build a network, and whether it be domestic, like Randall said, in your own backyard or international. And you know, there’s a time and a place for everybody. And then back to Brent, you’re mentioning Brent for a minute, but Brent may not have to do anything. But I don’t know that he’s working any less hard today than he was 10 or 15 years ago, because of the passion. He and others like him bring to the table and have been such a vital part of our ability to grow and attract really strong productive agents to this organization. But as it relates to and I in, you know, when I meet with Agent prospects, or large brokerages, or whatever the case, I tell people all the time, there’s a time and a place for everybody, some people will latch on to it immediately and jump right in. And that’s great. Other people want to see it and see it from a distance and ask lots of questions and try it on for a couple of years before they make the move, which is absolutely okay. And there are some people who are just comfortable enough where they are that they aren’t ever going to make it. And that’s okay, too. We want people to come because they really want to be here in a time in their life. For them to make that move. It’s a great place to be, once you’ve got your head around that and right. It’s a challenge to leave another organization for a new one, whether you’re coming into exp or you’re going to XYZ, right? So there are stresses associated with that. There are challenges, and we want to help people feel as comfortable as they possibly can be before they make that move. And it’s part of the reason that we have such a high retention rate. Yeah, I think it’s true. I mean, when I see people leave, I’m like, what happened? There’s sometimes there’s an explanation that goes beyond the traditional, but I, it blows my mind. And of course, yes, there’s always going to be attrition. So and people might shift and come back and make changes and whatever. But at the end of the day, this has been an amazing experience. For me, I see that it’s been a wonderful experience for you, I’m sure you get to know a lot of the senior team for sure. But also a lot of the realtors just watching and seeing and growing and participating and contributing and making a huge difference in the EXP world and in the world in general. Tell us one thing that you think is critical to success when you’re investing across borders or expanding your business across borders? I think the answer I would give you lawn is probably transcendent as it relates to whether or not we’re talking about crossing international borders or in doing business in in any way. And we’ve talked about many of the challenges that you face, right? But for me, it kind of starts with a kind of a cultural and philosophical underpinning, trying to do the right thing the right way for the right reason. Go into it with open eyes, do your diligence, ask the right questions of the right people. Take the time to be thoughtful about what you’re doing and understand the risks. And if you’re guided by trying to do the right thing the right way for the right reason. You’re not trying to take shortcuts. You’re not trying to make a quick buck for the sake of making a quick buck, you taking a more methodical approach to creating sustainability behind the decision that you’re making. So, again, that’s a bigger answer than maybe you asked for. But I think that underlies, at least for me from a cultural and philosophical point of view. As a senior executive over the course of my career, and as Vice Chairman of EXP, the kinds of thing embodies the way we think. And it embodies, from an exp point of view, how we approach what we believe to be a very agent centric business. It’s definitely our customers. Our real estate agents. Yes. And that’s the way we run our business. Yeah, exactly. I agree with you. Where are you physically located in New York? The New York area, right?
Randall Miles 27:41
Yeah, in New York City. Okay. How’s the weather by the way? Is it starting to get a little cold?
Lauren Cohen 29:58
Well, the leaves are starting changed a little bit, then it’s getting a little bit cooler. But it’s so far been a pretty nice autumn. Yeah, well, I’m looking forward to autumn because for us here in Florida, it means we actually get some reprieve from the heat. So and also, that’s when all the people start coming down, and I get really, really busy. And this year is going to be no exception to that because people want to find ways to find the sun. Actually, we had in our school 100 over 100 families join our school over the summer. It’s a private school. And most of those families are from the northeast New York, New Jersey just looking for a new opportunity now that they don’t have to work physically in their office on Wall Street or wherever. They have a little more flexibility and freedom and want more space. And it’s been a crazy market down here. That’s for sure. But I think it’s crazy. Everywhere. Yeah, it’s been an interesting migration stimulated by COVID. Yeah, I’m in the Hamptons at the moment. We’ve got a place out here. And the number of people who have migrated out of the city into the Hamptons on a permanent basis has driven up school enrollment and a variety of things like that you’re seeing in the New York area, that happening in places like Westchester County, New York, which borders that Connecticut, you’re seeing it in places like Greenwich and Stamford and southern Connecticut, where people with the flexibility now to not have to go into the office every day. Don’t mind a two hour commute if they have to do it once or twice a week, but like, you know, a little different atmosphere the rest of the weekend on the on the weekends. Yeah, definitely. It’s been life changing. Well, Randall, I want to thank you for joining me today for letting me get to know you a little bit was a pleasure to meet you in person, I don’t usually get that it usually get the opposite these days podcast first meet later. But fortunately, I had that opportunity and will actually post one of the pictures that we took together, hopefully onto the podcast. Thank you again for joining us. Randall miles great Vice President and Vice Chairman of EXP world holdings, and a hugely successful career as a senior executive and Capital Management and capital holdings and you name it anything to do with money in real estate and opportunity. It’s a real pleasure and a joy to have you. I’m Lauren Cohen, international legal and real estate expert again, thanking lendai, a company that lends foreign investor capital to people investing in the US from Canada, Australia, Israel and the UK at the moment and soon to be many other countries. Reach out and find out more about Lendai and my partners there. And please subscribe to my podcast investing across borders which can be found on any of the podcast channels. I am very pleased to present this to you our 52nd episode. And thank you so much for joining me again today. Have a great day everybody and please stay safe and healthy. Thank you again. Thanks, Lauren. Thank you bye.
Thanks for listening to Investing Across Borders with Lauren Cohen. Make sure to check the show notes for any links and for guests contact information. If you have questions for Lauren, please reach out to her at FOUNDER@ecouncilglobal.com. If you enjoyed today’s episode, please subscribe, rate, review, and share the podcast with a friend.