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In this episode of the Real Estate Pros Podcast, host Micah Johnson interviews Sam Wallace, founder of the Homestead Group, a real estate brokerage that is revolutionizing the industry by eliminating commission splits and fees for agents. Sam shares insights on navigating market challenges, empowering agents and investors, and building lasting relationships in real estate. He discusses the importance of cost efficiency, success stories of agents, and the human element in real estate transactions. The conversation highlights the need for innovative brokerage models that prioritize agent support and client satisfaction.

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    Investor Fuel Show Transcript:

    Sam Wallace (00:00)
    a question that I get asked every time, no matter what is what’s the catch? You know, we don’t charge any splits. We don’t charge any fees. And so, you know, when something’s free, especially in real estate, it’s often too good to be true. And so I want to address that skepticism and just, you know, take maybe 90 seconds to explain, you know, how we can do that. You know, if

    If you think about what Robinhood did in the financial services industry, before Robinhood, ⁓ you had Schwab and E-Trade. If you wanted to buy or sell a stock, you got stuck with flat rate fees every time. And if you didn’t have a lot of capital, those would, those would eat you up, you know, if you only had a couple hundred bucks profit. So, and then Robinhood came in and they said, ⁓ no fees, no commissions. And the industry had to follow suit. So, ⁓

    we’re trying to be just as disruptive in real estate.

    Micah Johnson (02:21)
    Hey everyone, welcome to the Real Estate Pros Podcast. I’m your host, Micah Johnson. And today I’m joined by someone I’m looking forward to chatting with. His name’s Sam and he’s making serious moves in the real estate brokerage space, especially when it comes to how they work with investors. Sam, glad to have you here, Absolutely, absolutely. I think our listeners are really going to take away some, take away, take something away from how you’re approaching.

    Sam Wallace (02:38)
    Micah, appreciate your time.

    Micah Johnson (02:47)
    especially a real estate brokerage, working with investors and capitalizing on a time where the economic situation may need to get deals a little bit skinnier. So let’s dive in. So first off, for people who may not be familiar with your world, give us the short version. What’s your main focus these days?

    Sam Wallace (03:02)
    Absolutely. So ⁓ I’m the founder and principal broker of the Homestead Group. We are a real estate brokerage currently based in Nashville, Tennessee, ⁓ licensed in Tennessee and Alabama. Georgia will be our next state and we have a six state expansion plan for 2026, which is right around the corner. And in a nutshell, we don’t charge any commission splits.

    or brokerage fees of any kind whatsoever for real estate agents and that has implications ⁓ all the way down to the client, the investor and everyone in between. We save money ⁓ for folks from top to bottom.

    Micah Johnson (03:39)
    That’s what caught my attention in our pre-recording talk was how you’re approaching that. As someone who got started in the industry as a realtor years ago, those things start to add up a lot as time goes by. So what exactly have y’all been doing to keep that running smooth and help agents and investors do better in this environment?

    Sam Wallace (03:59)
    Yeah, it’s, ⁓

    tough and it’s tricky and I tell you just a bit of background. I started with with Keller Williams and then switched over to eXp and learned a lot of great things between the two companies for sure. But when I was with eXp, I would get charged a broker review fee on top of my splits. I would get charged a risk management fee on top of my Arizona emissions insurance and $100 tech fees and office fees, even though it’s a cloud brokerage.

    And I always assumed that there were ⁓ expenses on the back end that I just wasn’t privy to as an agent. And so when I hit the three year eligibility to get my principal broker’s license and start our own firm,

    I got to peek behind the curtain per se. And I found out that the only expenses really are self-inflicted in terms of brick and mortar costs that aren’t necessary ⁓ after COVID or ⁓ top heavy management, just having more folks than you need on ⁓ roles and positions. And so we started this thing to be lean from the get-go.

    And ⁓

    You know, people are hurting these days. This, economy is not what it was. I’ve been in this business for about five years now. And so this is my first legitimate market shift. And we’re having to go with it. When I, when I first got in and got my feet up under me, it took me about a year to, really understand how to be a successful agent. And I think in 2021 closed 40 something deals. And.

    you know, it’s night and day. ⁓ Landowners, you know, I think there’s a greater opportunity on the acquisition side for properties for investors than when the market’s Folks are just in a greater need for money. you know, the issue is on the B2C side of it, the selling half of the transaction where you got to be more aggressive and competitive, but

    Honestly, as long as you’re getting a good price on the A to B side, I think you can compensate with it, especially on lower price properties with just superior marketing and working with somebody that’s really going to go over the top and get the exposure and engagement and traffic that you need, the eyeballs to sell something.

    Micah Johnson (07:04)
    So let’s get a little deeper dive there into exactly how you’re positioning this brokerage that you’ve started and equipping agents and even yourself to be successful in these tougher environments. What’s that look like on the day to day?

    Sam Wallace (07:19)
    Yeah. So the first things first, you need to get your floor lower in terms of your fixed costs and your expenses that you’re going to pay no matter what. Because sometimes when the market’s slow, like survival is the name of the game. That’s the ugly truth to this. And

    You know, we don’t, we don’t require agents to be members of realtor associations at the state, national or local level. Um, that’s another $500 in your pocket. Um, you know, 20 % splits, you know, paying 15 grand a year. Um, you know, we don’t, we don’t have any of that. Uh, we’re actually starting in the process of starting a sister brokerage to where you don’t have to be a member of an MLS if you don’t want to. So.

    Micah Johnson (07:59)
    Mmm.

    Sam Wallace (08:00)
    And

    we have to start a completely new company for that because the way the MLS is are set up. ⁓ If you, you as a broker or a member, then they require all of your agents to be members and they have all the reciprocity set up. ⁓

    So we’re creating a sister brokerage with an identical model to where if let’s say you’re a builder and you just want to basically be a glorified for sale by owner, but you want to be able to market your properties and have the license. You can do that in a bare bones way. And we can, we can offer you a way to.

    Micah Johnson (08:31)
    Hmm, interesting.

    Sam Wallace (08:34)
    market your properties and be a licensed agent as an alternative to retirement and be one step away from, you inactive. ⁓ And I find a lot of

    folks that I’m working with on the development side of things and our agents that are joining who are investors first and agents second, they’re not making this their top priority. They don’t want to brand themselves as a realtor. They just want to be able to have that credential when the time comes that they need to use it. So we’re a good space for those kind of people in particular.

    Micah Johnson (09:12)
    So is that your main ⁓ agent type? Is there starting as investors first and then adding the realtor side second?

    Sam Wallace (09:21)
    That’s who we seem to be attracting here lately, especially as we’re getting more traction. We’ve got 19 agents currently. We publicly launched September 18th. And so we’re a couple months old as far as that goes. We started this company ⁓ in November of 2024, spent the majority of this year getting everything straight with the tech and the backend and the systems, making sure we were prepared to scale and grow as needed. ⁓

    Yeah, I think our company makes the most sense for people who are independent, that don’t want to ⁓ work as an employee. They want to run their own business, have the support needed, of course, but not be micromanaged and function as an independent contractor. I’ve worked places where they require office hours and quotas and whatnot.

    and we’re open-ended. ⁓ We want you to be able to run your business as you see fit and we’re providing a platform where you can do that more affordably than anywhere else out there. So yeah.

    Micah Johnson (10:32)
    It’s true how much those fees add up. And what I think is interesting is that client type you’re attracting first. Because in our world, mostly real estate investors that were around, realtors are kind of a second thought that you deal with. And they become a part of your business that can have a sizable bottom line to it, or sizable fee to it that’s taken away from your bottom line. And like we’re talking about in skinny environments. So I think it’s cool that you’re creating something

    really for a niche type of agent where they’re not the agent first. They’re that investor first that’s going to leverage this other tool without having to have all the fluff that goes with it.

    Sam Wallace (11:44)
    Right. And Micah, you talk about getting skinny and something that…

    something that I’ve done with our agents and that I’ve tried to practice and pass along from my experiences with investors. I work primarily with lands, my family’s in the timber industry in Alabama. And so that’s what I grew up with. And that’s what I’m comfortable with. And it’s what I like. I’m passionate about it is when a deal does get skinny towards the end of a transaction and the investors trying to figure out how to make it make sense. And let’s say that the commission we have set is 3%.

    Well, if the purchase price comes out to where, you know, 3 % would be 10 grand for me, commission as the agent and the investor only stands to, you know, let’s say they’ll net $8,000. I’m never going to make more money off of a deal than the investor. So what we will do is we’ll just split the costs and we’d make that nine and nine.

    you know, or if I were to make 10 and the agent were to make four, we’d do seven and seven. And I think that puts folks at ease and offers some peace of mind and just lets them know that like we’re relationship first with investors. Like I don’t want like choppy short-term one and done deals. Like that’s with your typical residential clients. And you know, if you’re lucky, you’ll get some repeat business seven years down the road. But ⁓

    Micah Johnson (12:41)
    Not you.

    Sam Wallace (13:07)
    you know, if somebody’s good to work with and the fundamentals make sense, then, you know, we really need to focus on whatever it takes to get something done and keep moving forward. And, in this economy, I try to shoot for,

    ⁓ At least 50 % of our deals closing. prefer 66 ⁓ Once we get too far below the 50 % mark it kind of starts to not make sense for the either one of us ⁓ agent or investor, but ⁓ Yeah, we just vet pretty heavily on the front end and try to sniff out any issues that could arise, you know in a transaction along the way and

    you come across so many gosh but you when there’s title issues or a squatter on the property or i mean you name it you know just after you do enough volume you start to kind of have an eye for that kind of stuff unexpected so

    Micah Johnson (13:59)
    Now what makes someone that, out of the 19 that you have, who’s really just taking off with it and it’s really made sense in their business? What’s that look like in their world?

    Sam Wallace (14:10)
    Sure. Yeah, so we’ve got one agent in particular. Her name is Kaylee Dunn. She’s a commercial agent based out of Mount Juliet, Tennessee, Wilson County. It’s county adjacent to Nashville. So you got Davidson and then Wilson. So it’s growing really fast. ⁓ She used to run her own brokerage and ⁓ she was thinking about starting up another one. And honestly,

    For any agents or investors that are thinking about doing this yourselves, ⁓ I would recommend if you want to have that organization and have that platform and that leadership, just start a team and run it like a brokerage ⁓ or we would be open franchising or a branch, you name it. Let us deal with the liability ⁓ and you can build out.

    everything that you would as your own firm without having to deal with the state and the commission, the real estate commission and all that. So she’s done well, but that’s because she’s already had all of her stuff in place to hit the ground running. ⁓ We’re attractive to new agents because when you’re new, you know, those, those exorbitant fees, they add up and they hurt more. But

    We really need people to start teams and we need teams that are already in existence elsewhere to come on board so they can offer those agents the support that they need. And, ⁓ you know, you can charge for it, but, ⁓ as quickly as we’re growing and scaling, ⁓ I do office hours every day. I’m always available. ⁓ you know, I’ll pick up my phone no matter what, but in terms of like the hand holding that an agent really needs, what we’ve done thus far is.

    ⁓ I will spoon feed a deal to a new agent when it’s in their market, it makes sense and we can work together on it. I’m a hands-on learner. Most people are. I sat through, don’t know how many training courses and tutorials and presentations at Keller Williams, but when it came time and push came to shove and I got a contract in front of me, I was like, what do you do?

    And so what we do and what’s worked wonders,

    I need to talk about Connor as well. He’s kind of the other end of the spectrum. So Kaylee was already ⁓ built out, knew what to do from A to Z. Connor had never done a deal before, Connor Parks. He was an agent in Utah and he moved to Nashville and he just got licensed and I think he’s done…

    I have to check the count, I mean, he’s probably at 12 deals this year. ⁓ never haven’t done any before. And the, what kickstarted that was I took a listing and I co-listed it with him and. You know, you, got to trust in it it has, an element of risk for us, but honestly, like, I, I, they walked the property with me. They, I show them how to use the drone.

    uh, the angles to take the editing the lighting, you know, just make sure you get the frontage make sure you bring flag and tape and mark the corners and uh, look at the local amenities and how far are you from the hospitals and you name it right and I show them what to look for on the paperwork and the restrictions and the tax records and the flood zones and the topography and all that and then I have them draft up the listing agreements and the purchase and sale agreements, you know, and I have them post it on to

    Micah Johnson (17:58)
    Thank

    Sam Wallace (18:14)
    something different Facebook groups and make the marketplace listings and go through the land.com subscriptions and you name it just all the bells and whistles and I’m there with them. the first deal we split 50 50 and then the agreement is the first deal that they get organically. We call this together as well and we split that. So I get

    I get my return on them, break even, they got two deals on their bill. And then they have the confidence. And of course, you’re gonna have nuances with every transaction, but 80 % of it they’ve got as a template to use for the next one. So that’s kind of what we’re doing. And that’s what I wanna do, just…

    Micah Johnson (18:39)
    Thank

    Absolutely.

    Sam Wallace (18:56)
    throughout the company if we can. ⁓ I don’t know why that’s not more popular. I think it’s because of the turnover rate, right? With other companies, know, lot of agents change brokerages like they change clothes. We’ve got 100%. Like we haven’t had anybody leave yet. And so ⁓ I think that’s a luxury that we have that a lot of other companies don’t.

    Micah Johnson (19:15)
    I agree because I think it’s cool that how much you’re helping in the field. Again, as someone who went through trainings and things like that as an agent, there’s the book world. And then there’s that real world. There’s those things that unless somebody who’s thought about it and seen it before shows you in that space, like what you’re describing with the drone and where you’re going to mark off and to think about how close it is to the hospital and all these little tiny nuances that make a deal more

    appealing to the end buyer. You don’t just know that stuff. You wouldn’t even think of it most of the time. You’re usually so stressed out about the paperwork and how to fill out a contract that you don’t know what else to say or do. So I think that’s cool that you’re stepping in with them to give them that runway into success. Cause I’m based out of Florida and everybody here’s got a real estate license and nobody uses it. Like there’s so many that fall away. think the last average I heard

    out of each real estate class in Florida, which there’s a ton, I think it’s one out of every class will still be doing it in five years. It is the lowest amount. And again, my experience seeing it, unless you’re that hard charger and you go force people to tell you, not many environments set you up to succeed that way. So we, you’re describing one where you had that person that knew they capitalized on your system immediately, found success. And now you have that other side of it where you’re

    Sam Wallace (20:17)
    Yep.

    Micah Johnson (20:37)
    giving people that runway into real estate to help them be successful. One thing I love about this industry is it’s one of the few tools you can really use in America to change your life with financially. You can completely change your station using this industry.

    Sam Wallace (20:53)
    Yeah. And something I always tell people is, ⁓ find me a single billionaire or even somebody that has a nine figure, ⁓ net worth self-made that wasn’t inherited, that doesn’t have real estate in that portfolio. I don’t know if there’s a single one, you know, it’s not a coincidence, right? So, ⁓ I don’t know. That’s something that I resonate with.

    And, you know, we’re talking about this and I’m trying to think about this through the perspective of the listener and something,

    a question that I get asked every time, no matter what is what’s the catch? You know, we don’t charge any splits. We don’t charge any fees. And so, you know, when something’s free, especially in real estate, it’s often too good to be true. And so I want to address that skepticism and just, you know, take maybe 90 seconds to explain, you know, how we can do that. You know, if

    If you think about what Robinhood did in the financial services industry, before Robinhood, ⁓ you had Schwab and E-Trade. If you wanted to buy or sell a stock, you got stuck with flat rate fees every time. And if you didn’t have a lot of capital, those would, those would eat you up, you know, if you only had a couple hundred bucks profit. So, and then Robinhood came in and they said, ⁓ no fees, no commissions. And the industry had to follow suit. So, ⁓

    we’re trying to be just as disruptive in real estate.

    And the way that we can afford to do that is through ancillary services. So we get bulk volume discounts.

    as a company, think of any service that you would want to purchase as an agent, whether that would be a Canva Pro subscription, or you need some yard signs or business cards, or some merchandise or closing gifts, you name it, whatever that company will charge you retail as an individual, we can go to them and say, hey, we got X number of business that we can send you. ⁓ In exchange for that, can we get a discount? And let’s say that ⁓

    we would get a 20 % discount on business cards. We would take 10 to 15 % of that and of those savings pass it on to the agent. So it’s still more affordable for the agent than it would be, you know, approaching these folks as a, an individual. And then we would pocket the five to 10 % remaining margin, super skinny, scale it. ⁓ the same thing with market service agreements with title companies. ⁓ you know, we have respa compliant, ⁓

    deals with lenders that we’ve got worked out. We’re looking ⁓ to joint venture with the title company potentially next year. So you take all that and we don’t need a whole lot from any direction. We started this thing, lean from scratch. ⁓ Our expenses are super manageable. It’s sustainable. We’ve figured that out over the past 15 months and we’re here to stay. So.

    Micah Johnson (23:34)
    You’re really coming at this from a different direction. I appreciate that in that in that space. I like the description of it comparing it like Robin Hood, because where most have just gotten their money a certain way, and it’s kind of been business as usual for so long in the brokerage space. You’ve come at it from a whole different viewpoint. What really what really did that for you? What about it was like, I’m going to I need to do this.

    Sam Wallace (23:56)
    Yeah, well, I just, I couldn’t make sense of the fees I was being charged and I didn’t understand it. And I always assumed that there was more to it. And once I got the little spreadsheet going and I was looking, I was like, okay, it costs $90 to apply for a real estate firm through the Tennessee real estate commission.

    And then, you know, Alabama is going to be about that’s per state, right? And then you have an Arizona mission to insurance policy. I think ours is like 900 bucks for a year. And we offer that to agents as well. So we can recoup that. And then you got your MLS dues. I don’t know, 45 bucks a month. If you’re a realtor, 60, if you’re not, we have to be realtors, unfortunately, because for the agents of ours that that won’t to be.

    If we didn’t have to be, we wouldn’t be. think they’re like glorified HOAs for agents. I don’t think you get the return in terms of value. I don’t think their education is as good as, you know, our preferred partners. It seems to be a subpar. I think the contracts are kind of sloppy.

    I’ve spoken with real estate attorneys and I think there’s some unnecessary liability built into those. And so we’ve got proprietary contracts that we offer our agents as alternatives. You can use whatever you want. I guess the third thing is the lobbying side of it. RPAC, regardless of what side of the political spectrum you’re on,

    they’re actively contributing towards stuff that you don’t agree with on a regular basis, because they have to, right? They have to appeal to both sides and all over the country and the greater Nashville association of realtors. ⁓ I was told that they had a pretty big contribution towards getting property taxes raised and the lobbying on that, which hurts everybody. ⁓

    I don’t know. mean, the industry is changing and we’re here to be a part of it. And we’re trying to lead the way on the brokerage side. You know, the associations with the NAR settlement and lawsuit. mean, we just, I think that there’s so much room for growth and improvement and we want to play a pivotal role in that. And, ⁓ you know, if we can make a little money along the way, that’s awesome, but this is going to be a long uphill thing thing from a profitability perspective. And so really what I’m trying to do is just create.

    a platform that I wish existed ⁓ when I was an agent and try to design something. Cause I still think like an agent, right? I mean, this time last year, that’s what I was. And so I’m trying to build this thing in a way that I would, know, if I were on the receiving end of it and I wasn’t in the brokerage position. So if I, if I stick to that, I really believe that it’ll get traction in the momentum. So, ⁓ time will tell.

    Micah Johnson (26:38)
    I agree.

    agree. The brokerage space was left the same for a long time. Like nothing changed about it for a really long time. then COVID did. COVID changed the way that we operate in a lot of industries. I think it’s opening that door to make real estate more accessible, right? Cause those fees do drive people out of the business. They really do. You can have a tough year and be gone and all because you got started on a hard market cycle and then got charged a bunch of money where you’re

    Sam Wallace (26:39)
    Yeah.

    Micah Johnson (27:05)
    what you thought was a dream, ain’t a dream anymore. You’re back in an old nine to five doing something you didn’t want to do and having folks around like you to just think outside that box and put yourself in that position of that agent again. Cause it’s, I got a soft spot in my Harper agents. It’s to be a really good one. You got to dedicate yourself to it. You’ve got to understand the nuts and bolts of so many things. mean, one of the things that the national association of realtors did do is it, the realtor is still viewed as the single most expert on a single family home.

    A lot of money went into building that. So how do we capitalize on that fact by being training people to be good at it and really providing that value? Because so many just think a realtor and so many realtors do this. They just get a document, put it in the MLS and that’s it. That’s all I got to do, which that’s not what all you got to do. That’s not even the, that’s just a tiny portion of what that position should include. And it’s almost like the old brokerage system steered them that way.

    where you just gotta get in, pay some fees, sign paperwork, put in the MLS, and then you’re done. And that’s just not the case.

    Sam Wallace (28:07)
    Right. Yeah. And you know, it’s just like any other industry, you know, the, I don’t know, the bad apples give the reputation that everybody else has to, has to deal with and work through and push forward past. So.

    It’s not specific or unique to us, but I tell you man my family discouraged me big time when I told him I was gonna go this direction and I still haven’t gotten the I told you so moment but I Get it. I know, know, everybody’s dealt with that cheesy guy that like, you know, it’s like ⁓ man, when you get on the other end of the deal with some almost like gosh, please do better So I look better to the people that don’t know me, right? Yeah, I’m not telling you

    Micah Johnson (28:46)
    Right? Right? As that, I remember

    an argument in there. People think they’re a lot like used car salesmen because so many people act like a used car salesman in the business. it’s understanding just how big of a deal it is what you’re doing. That there’s a pride in your work that I feel like you’re instilling in the agents early to see that this isn’t ⁓ just paperwork in an MLS. Look at all these things you need to think about. Look at all the opportunities that you really have to

    whether it’s an investor you’re working with, end buyer that you’re working with, whoever it is to actually provide value to the transaction and make it a better experience and profitable for all parties.

    Sam Wallace (29:26)
    Yeah. And, you know, as a new agent, ⁓ what freaks most people out is like, I’m personally responsible for the biggest single biggest financial decision of this person’s life, you know, and if you’re fortunate enough to be successful, you start to lose sight of that along the way naturally when it’s a daily occurrence, right? But if you can just remind yourself like what that’s like for a first time homebuyer or an investor,

    doing his first deal, taking that leap of faith. Like, man, it’s, I don’t know how to instill that other than just, you know, being repetitive, but that’s really the core of it. And that’s what’ll help you take care of folks is, you know, just remember what it’s like doing it your first time. yeah, that’s it.

    Micah Johnson (30:12)
    Okay. All right. Final question before we get wrapped up here. What do you love most about what you do?

    Sam Wallace (30:16)
    Love’s a strong word, man. definitely, I came from the chicken business. I managed genetic research for Chick-fil-A before I got into real estate. And so I dislike it less than anything else I’ve done. I don’t know if I would say my passion comes from real estate specifically.

    But it’s just from the people aspect and being able to meet folks that otherwise never would have had an opportunity to get to know and just being able to make an obvious improvement in somebody’s future. And I don’t know, it’s the people. I’m not even a people person, but when you, the gratification you get from actually helping somebody

    just on the most fundamental basis, man, it really, helps you, it helps you sleep better at night.

    Micah Johnson (31:04)
    It

    does, I couldn’t agree more. You get something out of it too. Even when you’re not trying to, there’s something that comes back to you for that. Sam, man, I really appreciate your time story and perspective. If someone wanted to reach out to you and learn more about the brokerage and what you got going on, what’s the best way to find you?

    Sam Wallace (31:20)
    Yeah, my personal line is 205-225-4447. I ⁓ pick up. I answer phone calls. I get to email as quick as I can, ⁓ text messages. But anytime you got something time sensitive, holler at me and I’m here for you. Our social media, we got…

    400,000 members worth of Facebook groups. We got the biggest Facebook group in Tennessee in terms of volume, Tennessee Home and Land for Sale, 215,000 members. Take advantage of that free resource. And then we’re on Instagram, we’re on TikTok, we’re on YouTube, you name it. So I’m looking forward to helping anybody in whatever capacity I can. It doesn’t have to be real estate related.

    Micah Johnson (32:04)
    Awesome, man. Thank you so much. We’ll make sure that Sam’s information is in the description below. I think we need more people in this space doing it like Sam’s doing it, that real heart for people. And for those of you tuning in, if you got value from this, please like this episode, subscribe to our channel. We’ve got more conversations coming up with operators just like Sam, who are out there building real businesses. Thank you so much. We’ll see you on the next episode.

    Sam Wallace (32:29)
    Take care.

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