How Jeff Smart Scaled to 100 Agents & Built a Real Estate Investment Club

Dylan Silver (00:01.634)
Hey folks, welcome back to the show. Today’s guest is an Eastern Washington based real estate broker specializing in residential and commercial sales with a team of over a hundred residential agents. He’s also involved in the new construction space. Please welcome Jeff Smart. Jeff, welcome to the show.

Jeff Smart (00:22.574)
Great, great, I’m glad to be here.

Dylan Silver (00:24.97)
It’s great to have you on and I always like to start off at the top by asking folks how they got into the real estate space.

Jeff Smart (00:33.378)
wow. That’s an old story. My dad was a realtor since the mid-60s, 1960s. Started a real estate brokerage in 68 that I still own. It’s not my primary brokerage. It’s an independent. But I remember being 10 years old in his office and one of his managing brokers asked me if I was going to take over the business one day. And I said, heck no. No. Don’t want to do this.

And so I went into technology, went into IT and broadcasting and ended up in a bad merger situation for a company I was working with. And so, you know, I had a real estate license, so I went into real estate and stayed there ever since.

Dylan Silver (01:16.716)
When you were growing up in the business, you mentioned you said, isn’t really something I wanna do. Was it almost a thing where like you were going away from the business, thinking like this is not something that I wanna be involved in, I’m not gonna dive into it. So you really weren’t, although family was involved in the business, it wasn’t like you were constantly talking about real estate.

Jeff Smart (01:39.31)
No, no, but there were the normal talk at the dinner table with dad about what was happening. Sundays, we’d take off and drive around and look at open houses. so, so it just was, I was immersed in it. And then a little bit later on when I was a teenager, I helped him with writing a contract and stuff like that when he had a long line of…

eight clients waiting to meet with him. I’d help him with some of his purchase and sale agreements just to make sure he had all his paperwork together. So was kind of like a young transaction coordinator for a little while.

Dylan Silver (02:14.54)
What age were you and what time period were we talking about when you started to get into real estate yourself full time as a career?

Jeff Smart (02:22.254)
2000.

Dylan Silver (02:24.29)
2000, okay. So you were in really at a time where it was probably great to be in real estate, right? really up till the crash, it was a great time,

Jeff Smart (02:34.636)
Yeah, yeah. Well, was in our area, it was kind of an even market throughout that time. And then when 2008 hit us in the face, like a baseball bat, it made those of us that had been in a while, you know, kind of hunker down and really work a lot harder. so, so yeah, it was, was nice to be in before that. I almost pity those agents that jumped in during that.

Dylan Silver (03:00.898)
It’s difficult. mean, I’ve spoken with so many people specifically on the lending side who talk about how everyone was making money in the lending side pre-crash, right? Pre-2007, 2008. And then you just saw a massive drop off because everybody who had the money, who might’ve been spending it, now they have to get creative in order to get deals done and no one was lending, right? So I’ve spoken with lots of investors during that timeframe and then who…

who say really you had private money beforehand, that private money always existed, but then you had a great proliferation in private money which was driven by this kind of crisis where people weren’t able to get any type of construction loans. So what else were they gonna do to fund big commercial projects?

Jeff Smart (03:49.526)
Yeah, exactly. And I thought back, you know, during that time, from what my dad told me back in the 80s, then with interest rates at 16, 18 percent, people were still buying and selling homes. So I knew to my core that even in a bad situation like the recession we had, people still need to buy and sell homes. They still need to move. And so if you take that mentality, it I breezed right through those years.

I did my normal volume. I really wasn’t hurt. I know a lot of agents that were. I know a lot of lenders that are no longer around.

Dylan Silver (04:30.284)
Yeah, I think it’s an interesting subject because specifically in the lending space, it was almost like there was free money being handed out and probably a lot of people who maybe should not have been qualified. But then you had this, what I would say in many cases was a huge overcorrection. And then you had lots of laws being passed Dodd-Frank and so on and so forth to where I feel like in a lot of cases, younger people especially feel like

a blood test is needed sometimes in order to qualify for a home. But I think as an investor, it provided a huge opportunity. Were you involved at that point in time in the investment side of things?

Jeff Smart (05:10.76)
In 2008, 2009, no, not so much. I started an investment club after that in the mid teens that has been pretty successful. And I should have done that during 2008, but I just didn’t have the brain power to do that at that point.

Dylan Silver (05:29.27)
And so I’ve seen lots of different avatars and verticals that people can get involved in as investors. Everything from, you know, buying infill lots to buying medical office buildings to builders who build trauma centers and hospitals and rezone the land and the area and so on and so forth. For the club that you started, was there one main theme or one type of investor or was it

Lots of different.

Jeff Smart (06:01.198)
It was mainly residential. With our area, there’s such a shortage of single-family homes. And so we were looking at funding flippers, we were looking at funding builders, and land acquisition. That was our big thing, and land development. And so, go ahead.

Dylan Silver (06:23.65)
And were people coming to you saying, I have a deal here, I’m looking for funding, is this something that you could assist with? Or were they coming basically needing, I would say some level of mentorship or guidance, just making sure that their deal didn’t get off the rails? Or was it a little bit of both?

Jeff Smart (06:39.918)
It was definitely a little bit of both. They’d come to me and they’d you know, I have this idea. You know, there’s this piece of land over there. I could do this, this, this, but I don’t, I’m not, I don’t have the horsepower to get the funding through traditional means. And so I set up crowdfunding for this. And so you, you can find a number of people with, you know, 10, 20, $50,000 in the bank just sitting there making nothing, or they can throw it into a crowd fund for a real estate, which is going to sell.

and be paid once it sells and make 10, 12%. So after the first couple of them, everybody kind of got hooked on it. And it’s been a great source for funding for small builders and for those that like to flip home.

Dylan Silver (07:26.946)
I’m a big fan, Jeff, as many people that have an entrepreneurial bone in their body or are interested in real estate to at least be part of a group like that. And let me tell you why. Because oftentimes, and I’m speaking from experience here, when I was working for Nissan selling cars, and I thought, hey man, it would be cool to be involved in the real estate space, I just figured, well, I gotta have a ton of money, and I gotta learn all the Xs and Os, and I was really kind of thinking about it the wrong way. My first steps should have been,

Hey, let me get to know everybody. Let me show my face in those rooms and say, hey, I’m an aspiring real estate investor and I’d like to learn the ropes. And I think it would shock a lot of people to hear that that would actually be well received. That in these rooms, investors are more than willing to kind of share their story and give guidance to folks.

Jeff Smart (08:19.756)
Yeah, it’s, I would say in the investment space, people are more open with ideas and open with helping others grow their business and be successful. It seems like it’s not a competitive thing, which is wonderful.

Dylan Silver (08:38.134)
Yeah, I mean, I think I was speaking with actually a young man the other day who found me through Facebook and he was asking me about wholesale and what do I do? was a college student. He’s also an athlete and he saying, well, yeah, money. don’t know how I’m going to develop the nest egg for this. And my thinking was because I had just spoke with my broker about compliance as a real estate agent, wholesaling. I was like, look, there’s actually a lot of things that you you may you may encounter.

But just start meeting people. Like, just like you reached out to me, but get as much face time as you can. Because that’s really how I’ve found deals happen, is through relationships, right? It’s a matter of, hey, someone’s got maybe the resources, but they don’t have the time. Or vice versa. Or someone has that kind of niche knowledge, like, hey, I wanna get into storage facilities, but I don’t know how that works. I don’t know how these land plays work. I don’t know any builders that might be able to…

to do that type of a deal. And it’s kind of putting the pieces of the puzzle together. I want to pivot a bit here though, Jeff, and ask you about running a large team. So 100 residential agents. That’s quite a large team. How did that transpire? Was it a focus goal to scale to that size of a team?

Jeff Smart (10:01.214)
it was not a focused goal to get to that level. just, it organically happened. the, the brokerage that, I opened up is it’s a hundred percent brokerage. So there’s a small transaction fee that the brokerage keeps. The rest of it goes to the agent. So agents are coming out of traditional brokerages where there’s broker splits of 70, 60, know, 50, 50 splits. And they realized that they.

Dylan Silver (10:29.015)
Right.

Jeff Smart (10:31.202)
that they’re doing well on their own and their brokerage is not really helping them build their business. And so they can come over and give themselves a raise of 30, 40, 50 percent and be very happy. know, they come over to this brokerage, they’re extremely happy and they stay.

Dylan Silver (10:47.074)
I want to ask you about new agents. I’m a new agent myself, right? I got licensed in April. I’m in Texas, so I think we like to maybe somewhat, we’re probably very biased. We think we have the most attractive real estate in the country, although there’s lots of people probably in Eastern Washington who would dispute that. Definitely Florida, a lot of folks in Florida I’ve had on the show. But one of the things that I see is, and,

I’m probably biased here as well because I have a different lens that I’ve come in from working so much with investors. People will come in and they’ll say, I want to do X, I want to do commercial or how do I get my first however many deals? They’ll try to approach it again from a very logistical standpoint or hey, I got to find the right broker. I think all of those things are helpful, but what’s been successful for me again has been

identifying which niche I want to be in, which is working with investors, and then how do I get in front of as many investors as possible, and then what do I do to stay in front of those people. So that’s been what’s worked for me. But I’m curious to get your perspective. For agents who are just starting out, what kind of general advice is helpful?

Jeff Smart (11:59.136)
I always, I tell every brand new agent to do the same thing. And I’ve actually taught classes on this. I call it my two hours to success. So a brand new agent has got to spend two hours a day, at least five days a week, concentrated on their business, whether that is making phone calls, emailing, social media posts, doing open houses, going to open houses, going and meeting with lenders and others. But you’ve got to have this concerted effort of 100 % attention for two hours.

a day for at least five days a week. It will explode past that, but that’s how you got to start. And you got to keep yourself busy for that time. So not sitting in your living room, sitting in an office, go to your office, get away from the house, go to Starbucks or any other coffee shop you want to go to and send emails and make phone calls. And that is where it will start and you will become successful if you can have that dedication.

Dylan Silver (12:54.368)
found that to be so helpful. I sometimes joke with people because they say, you know, you’ve got a nice home office, you why don’t you go and work out of there? I say, well, I’m trying to get the vibes, you know, I’m trying to spike some creativity here, right? So I like to have a Regis office space, which I had for a while or still have actually through EXP, but I like to go to, you know, a French themed coffee shop every once in a while. You know, I like to be able to change pace because doing that,

You know, I just had to do, I was talking with a tax strategist actually earlier today about, I’ve got, you know, maybe a more complicated tax because I’ve been really more heavily involved in real estate this year. So I need to take a look at this. And I said, you know what, I’m going to do this away from the house because I know that I’m going to have a more productive conversation. I’m going to be more well-prepared. But I don’t think that most people acknowledge that. So it’s nice. It’s refreshing to hear that someone else thinks like,

Jeff Smart (13:51.15)
It’s, it’s so weird because one thing COVID taught us is that realtors want to stay home and don’t want to go into the office anymore. It’s the wrong lesson because what also COVID taught us is that more and more realtors are doing less and less volume. Is there a correlation there? Maybe, maybe they need to get back into the office a little bit. So I can tell you that the more, more agents that come into my office.

Dylan Silver (14:00.8)
Yeah.

Jeff Smart (14:20.526)
And I’ve got a big office. I’ve got 7,000 square feet of office space here. we bring those agents that come in, do more deals. The ones that are at home and I never see, hardly do any deals.

Dylan Silver (14:32.522)
I had a boss when I had just gotten into real estate. wasn’t licensed yet. I was working as a wholesaler. Tell me, and another guy, real estate is a contact sport. We didn’t really understand what that meant, but I really understand what it means now because…

In my business, still as a wholesaler and working a lot with investors, it’s the foreclosure leads, it’s hitting doors, it’s sending out handwritten notes. It’s also working lists, right? And I think a lot of people will work lists, but…

Definitely when you’re in the distress space like I am, you have to be willing to go into, I would say, some run-down places, right? And you have to be willing to have conversations. I’ve had so many hundreds of conversations, maybe more than that, with folks who are really in tough, tough situations. Maybe they’re facing financial distress. It could be emotional, right? Like a separation, marriage. It could be a death in the family. And so I think a lot of people will take a look at a situation like this and say, well, that’s a lot

issues and my my perspective is that’s exactly what

Wholesalers, and I’m differentiating that from Realtors here for a moment, wholesalers are paid to do. If you can come in and solve a tricky situation where maybe they potentially might be on the brink of losing the house or families fighting, right, and so they’re trying to figure out what do we want to do with the house, and you can bring people together. You can sort through, you know, airship and all these other things, everything, right?

Dylan Silver (16:08.223)
That’s where you’ll get a big assignment fee if you have a buyer lined up. But I think a lot of times people still have the same mentality, which is like, let me just call the list from home. And my perspective has been, no, you’ve got to treat it like it’s a contact sport. You’ve got to really go out there and put some skin in the game.

Jeff Smart (16:27.148)
Right, you gotta treat like a job. And the quicker you do that, the quicker you’re gonna be successful.

Dylan Silver (16:34.498)
ask you about Eastern Washington real estate because I’m a little I’d say I’m woefully ignorant on the Washington real estate space. I don’t have too much familiarity with it, but where is the I would say the center of it? Is there a big city that I should know about or be looking into if I’m looking at investing opportunities out there?

Jeff Smart (16:41.506)
Well, you’re down in Texas, so.

Jeff Smart (16:58.37)
Well, know, Washington state is essentially split in two. There’s Seattle, which is the West side. And there’s a big mountain range right in the middle of the state. And so on the West side, Seattle side, you get a lot of rain. so it’s the evergreen state on the West side. On the East side, all that rain stays on the West side. The East side is a desert. And so your big cities on the East side, aside from Seattle on the West side, you’ve got Spokane.

Yakima, Richland. Richland’s came claim to fame and that’s where I’m at is it was part of the Manhattan Project. This is where the bombs came from that went to Japan. Yes, exactly. Exactly. And so in Oppenheimer, in the movie, they refer to location X, I think they call it in the Oppenheimer movie. That is Richland where I’m at right now. So, you know, my metro area here,

Dylan Silver (17:37.586)
my gosh. Oppenheimer, right?

Jeff Smart (17:57.842)
is about a little under 500,000 people. So we’re fairly large, but we’re certainly not top five, top eight cities in the state.

Dylan Silver (18:13.826)
lot of land plays though out there, right Jeff?

Jeff Smart (18:16.454)
Yes, yes, we have an abundance of land, but we have to grow wisely. We don’t want to overtax our services and our water, and so we keep urban sprawl to a minimum.

Dylan Silver (18:32.789)
The land plays are particularly interesting for me because I’m in Texas, right? So we’ve got so much land. But also, I think there’s a real opportunity there for folks who are involved in real estate, in ground up construction to put heads together and maybe solve on a regional level the housing crisis, whether it’s alternative housing, whether it’s stick built offsite modular homes, which I’ve seen, but also just more affordable.

housing in general I think is possible specifically in these areas where where land is abundant, so I’m I’m hopeful and cautiously optimistic about what that holds.

Jeff Smart (19:12.3)
Yeah, I mean, you know, the National Association of Realtors, their first line is, underneath all is the land. So land is what controls everything. So if your land price is high, your home price is high. So we have to get affordable land in order to make affordable homes, because a two by four is a two by four cost at one store versus the other store. Negligible change.

land price is what really affects the price of a home. And so if we can get more land, more affordable land available to build on, then it solves an affordable home crisis.

Dylan Silver (19:54.892)
Jeff, we are coming up on time here. Where can folks go if they’d maybe like to learn more about the business or if they’re maybe looking at Eastern Washington as an area they’d like to explore? Or how can folks get in contact with you?

Jeff Smart (20:07.234)
Well, pretty simple. JeffSmartHomes.com. It’s not that hard to remember. And so you can contact me through that website. can do searches for houses throughout Eastern Washington and for land as well. But if anybody wants to get in touch with me, all my contact information is there at JeffSmartHomes.com.

Dylan Silver (20:27.436)
Jeff, thank you so much for coming on the show here today.

Jeff Smart (20:30.53)
Thank you, sir. It’s been a pleasure.