Not too many people who own a real estate brokerage have the privilege of planning how and when they want to retire from the business, but Chuck and Kathy Olson of Las Cruces, New Mexico, did. They are now traveling around the country in their new motor home, enjoying life and their retirement.
In the typical real estate business model it is extremely difficult to sell a brokerage, much less a region, because there are no hard assets there to sell. The value of the business is typically based on future production of the existing agents, and there is no guarantee they will stay once the business is sold. However, the EXIT Realty business model is entirely different and provides some creative financing opportunities because of its single level residual system. This business model makes it much easier for a business owner to retire from being a broker, whether by a merger or acquisition.
In 2002, Chuck and Kathy Olson bought the regional subfranchisor rights for EXIT Realty for the state of New Mexico and El Paso, Texas. “It was a little slow going at first because no one in our area knew about EXIT,” said Chuck. To help them get established and generate franchise sales, they decided to open a brokerage themselves and make it a model office. They were not new to running a brokerage; in fact, they had previously owned a CENTURY 21 franchise.
Because of their previous brokerage experience they were selective in their hiring, choosing a good mix of personality types in the office. “We wanted to avoid the back biting we had previously experienced,” said Kathy. “With its emphasis on mentoring agents and everyone having a vested interest in growing the office, the EXIT Formula was a perfect fit.”
When they reached 12 agents, they started emphasizing and encouraging the agents to sponsor more agents into the office. When they had about 20 agents, they implemented a well defined training program and focused on recruiting individuals brand new to real estate. They mentored them, helped them to grow and then celebrated their success. At the high point of the market they had 63 agents. Chuck and Kathy are both quick to credit much of their success to the excellent training that EXIT Realty provided as well as the EXIT Formula, which is the key to tying agents to the company and retaining them year after year.
As this office grew and became increasingly successful, everyone around them started taking notice. Franchise sales started popping and the region began to grow and flourish. Kathy focused on running the brokerage while Chuck developed and grew the region. This couple made a great team and together they dedicated their business to be a shining light in their community by abiding by a strict code of ethics.
In 2010, several crushing life circumstances, including their son’s devastating battle with cancer which eventually proved fatal, pointed to the fact it was time to turn over the baton to some young guns and sell the brokerage. Fortunately they did not have to look very far for a buyer. Two of their own agents, Joseph Arnone and Chris Harrison, came forward and were eager to buy the franchise. Because of the EXIT Formula, they were able to buy EXIT Realty Horizons for very little down. “There is nothing to sell in a normal real estate business model, nothing there to hold the agents to the business. Residuals are the key to growing a real estate business and being able to sell it,” said Chuck. In many situations there are young, energetic agents who are capable of taking over a brokerage and running it successfully, but the problem is they don’t have the capital to purchase it outright and the banks are reluctant to lend them the money.
Shortly after Chuck and Kathy sold the brokerage, their other son was wounded in a very serious car accident. So, in 2012, the Olsons made the decision to sell the region and retire completely, allowing them time to help their family and recover from their personal losses. Again, residual income was a major factor in structuring the sale. Joe and Chris had now grown the EXIT brokerage and were now the #1 franchise brand in Las Cruces, with 100+ agents and doing 7 times the sales volume of the local Keller Williams office. They decided they were ready to step up to the next level and purchase the region and apply and the same passion and energy to growing it. “We are eternally grateful to Joe and Chris,” said Chuck.
Chuck and Kathy still reside in Las Cruces. They say they love driving through town and seeing all the EXIT signs in the yards. It makes them proud to see their legacy continue. However, you might find it hard to catch the Olsons in Las Cruces, because they are now the proud owners of a brand new 38 foot travel home and they have been giving it a work out. They are reconnecting with old friends and enjoying life, in part because of residual income. Talk about a Life Changer!