S4E20 – Karim Kerachni – The Ultimate Real Estate Franchise Journey

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Key Timecodes

• (01:29) – Show intro and background history
• (04:55) – Deeper into his background history and business model
• (10:29) – How is his company consumer journey
• (17:29) – A bit about his numbers
• (27:43) – Understanding his strategies
• (34:55) – Deeper into his marketing strategies
• (44:23) – What are the revenue expectations with his model
• (45:44) – A bit about his online marketing strategies
• (50:56) – What is the worst advice he ever received
• (51:41) – What is the best advice he ever received
• (54:45) – Guest contacts

Transcription

[00:00:00.000] – Intro

Hey this is Sean Tepper, the host of Payback Time, an approachable and transparent podcast in building businesses, increasing wealth, and achieving financial freedom. I’d like to bring on guests to hear authentic stories while giving you actionable takeaways you can use today. Let’s go.

[00:00:16.430] – Sean

Are you frustrated with how much you have to pay your realtor? If you are, you’re not alone. Check out this scenario. Let’s say you bought a home a few years ago for about $700,000, and over the last few years, it’s appreciated to about $1 million now, you want to sell that home. In this case, if you’re paying a realtor 5 % commission, you’re going to be paying that person $50,000 for about two weeks of work, maybe a little more. But that’s a big chunk of change you’re sending out the door for something that can sell relatively quickly. Now, like it or not, if you’re a realtor, this is becoming a tough pill to swallow. So what’s the solution? Well, that’s where the. Flat fee model comes into play. And a business that has really taken the lead in this space is Property Guys. Well, my next guest is a franchise developer for Property Guys. And in this episode, we talk about how much you can expect to pay if you’re trying to sell your home, which can range between a few thousand dollars to a little over $10,000. We also talk about how much money you can make as a franchise owner, and we talk about what marketing works best. If you’re interested in getting involved in a franchise model that can generate some nice revenue, this is a great option. Please welcome Karim Kerachni.

[00:01:29.220] – Sean

Karim, welcome to the show.

[00:01:30.930] – Karim

Hey, thank you, Sean. I’m happy to be here.

[00:01:33.290] – Sean

Yeah, thanks for joining me. So why don’t you kick us off and tell us about your background?

[00:01:37.080] – Karim

Absolutely. So I’m currently in charge of franchise development in the US, specifically, Massachusetts, for a company called propertyguide. Com, as you can see here if you have the video. And so what Properlyguides does and has been doing for over 25 years to offer a different way of doing real estate. It’s a disruptor in the real estate industry to allow people to buy and sell for about 10 to 15 times less than what it typically costs to sell a property, but also to keep a level of control if they want in the process. It’s a really good model. It’s a revolutionary model. And where I’m involved with property guys is in the franchise development side of things. So I’m in charge of finding those gens, those aspiring entrepreneurs or even seasoned entrepreneurs and business owners who would want to get into real estate, but not as an agent, not as a mortgage broker or else, but as a franchisee and bring so much value to their local community and market.

[00:02:37.200] – Sean

Got you. Where are you based?

[00:02:40.190] – Karim

Proficiently speaking, Massachusetts, and specifically, Eastern Mass. Massachusetts. Personally, I’m all over the place. I’m currently in Malaysia. I have been traveling for about a year and a half for a certain amount of time in each places. I do work remotely for that business and for another business that I own in Canada. That has been a dream of mine for many years, and now I’m able to live it, not forever, but it’s pretty fun to be a nomad entrepreneur.

[00:03:10.960] – Sean

Sure. Yeah, absolutely. Now, you like your HQ, you could say that’s Massachusetts. Is that correct? That’s correct. Yes. Okay. And Property Guides, is it in all 50 states? Where is it located?

[00:03:25.300] – Karim

So their HQ is in Moncton, New Brunswick, which is just across the border from Maine. They are also located in Canada. And they are located all over Canada, from Coast to Coast, in every province. There is about 110 franchise active currently in the US. We started expending just in the past three years, so Massachusetts is leading the way. But we are also open in Florida, Texas, and Connecticut, and we have a few other states that will open soon. So with people like me basically finding franchisee. And then it’s not just finding franchisee, but also offering some ongoing support to those franchisee to make sure they’re successful.

[00:04:04.660] – Sean

This is good. We’re going to dive into the business model, how does make money? How do people get involved? For context, though, I’ll let you know, we’ve had a few people on the show previously that are in the franchise space, no restaurants, and a lot of different business opportunities that allow you to create some pretty decent revenue that are really boring businesses. And we, as investors, we like these boring businesses because this is Warren Buffett teaches us, they make consistent revenue. So we’re going to get into that a little bit. So that’s context here. We love franchises, love hearing about them, typically not food franchises. So if you ever talk to anybody who’s like, Hey, you got a food franchise, you should go on payback time, obviously. I’d be like, Nah, probably.

[00:04:47.590] – Karim

I agree.

[00:04:48.530] – Sean

Yeah.

[00:04:49.900] – Karim

I agree. I’m not a fan of food franchise. And funny enough, that’s the first thing that people think about when they think franchise, they think McDonalds and any food franchise. I mean, It’s true, I wouldn’t know the actual percentage, but it’s such a small drop in the bucket, the variety of industries and businesses that you can find in franchise. It’s mind-blowing and fascinating at the same time. As I mentioned, I own a cleaning company in Canada, and one of the ways to grow it where we were just one step away to reach, it is to turn it into a franchise model. Why? Because it has a strong brand and a great portfolio of client, great reputation and reviews. But also from day one, I’ve created systems and processes for every part of the business and recorded those systems and processes in basically what’s called an operation manual, not just how to do each type of cleaning, but also how to hire, how to fire, how to do marketing, how to do networking, and so on. So that’s one of the key elements that a franchise model needs. And so basically just one or two steps away from becoming a franchise, an actual franchise model and acquiring franchisee.

[00:05:58.440] – Karim

So all of that to say this is one example out of what? Thousands.

[00:06:02.940] – Sean

It sounds like what you’ve learned with Property Guys, it’s like you can lift and shift the templates, like the business model, how to be good at operations, and you apply that to that cleaning business. If we have time, we’ll jump into the cleaning business. But your experience there has allowed you to optimize that model. Is that a correct statement?

[00:06:22.190] – Karim

Actually, it’s funny you mentioned that because the way I see it is the other way around, but you’re actually absolutely correct. Meaning in the timeline, I started my cleaning company about five, six years ago and grew it. And so I’ve seen what it takes to start a business from scratch and all the struggles and the mistakes and the costly mistakes sometimes that come with it, and to create a strong brand and build a team and create systems and so on and so forth. And so therefore, when I came across the opportunity with Property Guys, when it was brought to me, it made that much more sense not only in what they do, but also in the franchise model. I was like, Man, actually, I wish I came across the industry prior, because for someone who is an aspiring entrepreneur, I realized afterwards that it is just such a better opportunity. I mean, better. It depends. It’s also great to start your own brand and so on. But in my opinion, having lived it, I think it is an amazing and unique way to get into entrepreneurship and business ownership to go under the umbrella of a strong brand system support and so on and so forth.

[00:07:28.860] – Karim

And so looking at both opportunities, I can talk of both. Now, as you mentioned, if I were to do it again or if I were to shift my attention back to my cleaning company, yeah, I actually know exactly what it takes to turn it into a franchise model and to find franchisee for that business.

[00:07:47.860] – Sean

Right on.

[00:07:49.260] – Karim

Yeah.

[00:07:50.370] – Sean

Absolutely. You can take the knowledge from one apply to the other. That’s brilliant. Well, let’s dive into property, guys. What does this company do?

[00:07:59.900] – Karim

Well, absolutely. So I’ll make it quick and simple. In the current traditional real estate industry, as many people are familiar, because it’s an industry that hasn’t changed in over 100 years. So if you want to sell your house or commercial property or condo, whatever it is, typically the main way is to get a realtor, pay a commission, five, six %, maybe four % sometimes, and also get a lawyer and also a stage and photographer. And there is this whole panel of professionals led by the real estate agent. And the whole process is out of your control and it costs you a ton of money. If we’re talking five %, we’re talking at least 30, 40, 50, 60 grand or more. It can go up for 100 grand in commission. And on top of that, depending on how the market is doing, your property might be sold within a week, or you can get a bunch of offers within a week just by putting a sign on your front loan. So it feels a little bit quite unfair to have to spend so much of your own value, your own property that you’ve kept for so many years.

[00:09:08.360] – Karim

So that’s what property you guys tend to fix. And how do they fix that is by including all the service that you need. So either all the service that I just mentioned and more, or just a handful of service that you need to sell your property efficiently, all of that in a package, that is a one-time flat fee. And that one-time flat fee is typically in the range of five grand. So for five grand, you can sell your house. Even if it’s a $2 million property, you can sell it. And you basically pay for the services that you get instead of paying based on the value of your property. So the savings involved are minimum 15, 20 grand. Every single time it’s not maybe. But on top of that, it taps both on the traditional home seller market, people who don’t have much knowledge and they want things to be done for them, great, but also on the market of people who want to sell on their own, for sale by owners. There are a lot of people who want to sell on their own for whatever reason, but they just don’t know how, they don’t have the support and so on around them.

[00:10:11.050] – Karim

And so in this case, it might not be five grand, it might even be just a thousand dollars to get the two, three service that they need, listing on the MLS, professional pictures, and that’s it. And they can do the rest themselves. So they can choose the level of control they want and they save a ton of money in the process. That’s what Property Guys does.

[00:10:28.070] – Sean

Got it. Okay, let’s look at this from two different angles. What I want to do is look at this from the… Let’s start with the consumer side, because that’s what we’re talking about already, is what is their process to look like? And then let’s talk about the franchisee joining property, guys, turning this into a business model so they can leave their nine to five. We’ll talk about that second. So, yeah, walk us through the journey. What does the process look like for the consumer?

[00:10:53.050] – Karim

So for the consumer, it is very similar to the traditional model in the sense of the only difference being they can list their property directly on propertyguides. Com. They can reach out to the franchisee or somebody on their team.

[00:11:07.100] – Sean

It’s just a website. They can create their own login and just add their property?

[00:11:11.000] – Karim

Yeah, they can list their property in minutes on the website, and then they can choose the packages that they want. They can reach out to the franchisee or the franchisee or their team can reach out to them to do some outreach as well. So this first step is slightly different. They don’t have to sign a contract. They are not locked in with that franchisee like you are with a real estate agent. You can also do other things if you want to. You get to see it as a listing and marketing package or service. That may include some licensed services. Having the listing on the MLS is something that can be provided only by your licensed agent, writing down the offer, doing the professional showing and so on and so forth. This is done by a professional agent. But you can have those services or not. Sorry, back to the process. The first step is slightly different. Then the rest is very similar. You get potentially a stage that comes and take care of your house and a photographer that comes and takes some pictures. The franchise, you or his team creates the listing. We can put the listing on the MLS and all the platforms, Zillow and Craglist and Facebook and so on.

[00:12:20.370] – Karim

Again, very traditional. The whole process until the end is very traditional. The difference being you don’t have one real estate agent that leads the way, but you have a whole team that surrounds your listing. Meaning how the franchise work is because we partner, we have exclusive partnerships with local professionals, all those real estate professionals that I mentioned, we vet and select some local professionals with whom we sign an exclusive partnership, and they deal with all the listings from that franchise or for a handful of franchise, including the lawyer, the photographer, and so on. So it’s basically a teamwork led either by the franchisee or by a team that we have in-house at home office at Propagant’s headquarter that basically manage those listings from start to finish, and are also led by the seller themselves. If the seller want to be involved, if they want to do their own showings, for example, they may, they can. So as you can see, it’s tough to give you a streamlined process because it’s actually quite customizable based on the needs of the client, which is not… That doesn’t exist in the traditional model. In this case, the client have the involvement that they want based on the type of franchise and the professionals that we have, the services that we have included in those packages.

[00:13:42.140] – Karim

Got it.

[00:13:43.100] – Sean

So just at a high level, what I’m hearing is I want to sell my home, I can go to property, guys, I can add my home. I can add it myself. I assume I can add photos myself, correct?

[00:13:54.270] – Karim

Yeah, you can.

[00:13:55.340] – Sean

Okay, all that good stuff. When is the $5,000 a one time payment via credit card? Is it spread out over three months? Walk me through how that payment is processed.

[00:14:08.840] – Karim

So that’s a very good point. The payment for the package is upfront. So since it’s quote-unquote, only two, three, four, five, six grand, it is paid upfront. We have the ability to offer list now, pay later. You can pay before or after it is sold. It’s basically a form of financing we partner with the bank.

[00:14:29.360] – Sean

Is that a higher fee then?

[00:14:32.370] – Karim

No, it depends where. I know how it is in Canada. In Massachusetts, we do not yet have that option. And in the other states, I couldn’t talk for them. I’m not sure. It’s pretty case by case. But it’s an option that we do offer and we’ve been offering in Canada for a while. I also know that majority of people don’t really take that option because usually they can leave for five grand and then they don’t have to pay anything else in the process, except if they want to add extra services, they chose one package and then they decide, Hey, you know what? I actually want those services as well. But to answer your question, it is a one-time payment. Yes.

[00:15:07.930] – Sean

Got it. What I’m hearing is like a la carte experience. You can add different services and other features or maybe different personnel to help you out. In that case, it sounds like you would start at 5,000, but you would probably spend more. Is that correct?

[00:15:24.230] – Karim

So it doesn’t happen often because even though I painted the picture as an a la carte, customized, because it is the case. But very often in the franchise, more realistically or more concretely, franchisee, they realize that, and you probably know that also in sales, when you offer a whole bunch of options to someone, it might get confusing and they decide. Often what franchise you end up doing is that the majority offer three package, the first DIY package, the medium and the premium, sometimes even just one, the full service package for five grand. Again, I use five grand as an average. For five grand, you get all the service. And it’s just so much easier for the client and for the franchisee and so on. And the value is there because at the end of the day, if you had to again pay the commission, find your own lawyer and so on and so forth, it would obviously cost literally 10-15 times more. So people see that they are more than happy to pay five grand to have their… On average, as I said, the house value is about 800 or 900,000, so they’re happy to pay five grand to have that 900,000 dollar house sold with that whole process.

[00:16:39.580] – Karim

In addition to that, something I forgot to mention, we also have a proprietary software for all the communication. And basically that also makes the whole process super smooth and seamless, which is also part of the experience. The reason I mentioned that, because I was actually just reading some reviews the other day, and that’s something that is often brought up, the seamlessness and the smoothness of the whole process. You’re probably familiar, a lot of people. Many people who sell their house for the first time and maybe chose the wrong agent have had chaotic experience or end up choosing, you know what? Next time I will sell on my own. So I do want to highlight the fact that the experience needs to be smooth.

[00:17:27.550] – Sean

I’m doing the math. And let’s say you’ve got a million dollar home and you sell it five % commission, 50 grand right out the door. Let’s say in this market, homes are flying off the shelf, 50 grand out the door for a week or two. I know some realtors would argue it would probably take you a little longer with work, but let’s say a month of work, 50 grand. It’s like, whoa, that’s quite a commission check there. So they could come to you, approximately $5,000. Same process. I mean, that we’re talking disruption. Do you have people who are like, You have a realtor showing up at your door with pickaxes ready to fight?

[00:18:11.190] – Karim

What’s the deal here? Well, funny enough, you mentioned that I was actually worried about that initially when I started being involved with property. And I think every franchisee had that worry initially. And then the franchisee, they realized that realtors in their market, they come around. They’re like, Oh, this is just another player in the industry. And we were not there to take the whole market, all their work, and put everyone out of business. There are just so many agents it would not be fair. But my worry was on exactly what you mentioned, bringing that to a new market, as I said, it’s a disruption of the industry, a whole new model, very unique. There is nothing really comparable to it. What I found is that realtors and mortgage workers and real estate professionals are actually my target audience. And it’s a good transition to why the process of being a franchisee is that a lot of real estate agents are actually struggling. There are just so many agents. Very few are actually very successful. I would say at least 90 % of them, of real estate agents everywhere in North America, I’m going to take a leap here, but I think message was that, are just doing okay, not where they’d like to be, maybe barely breaking six figures or not even.

[00:19:36.690] – Karim

And the main thing is they have trouble differentiating themselves from the rest of the agents. When you come as an agent and you have just so many people having the exact same value proposition as you, and any client can use John, Mike, or Mary, and they would get pretty much the same result, how do you differentiate yourself? And a ton of advertising and on LinkedIn and some nice headshots and and so on. But besides that, what can you do? That’s where being a franchisee, offering something vastly different than everyone else that disrupt the industry, that put the client first and allow them to save a ton of money and so on, it’s something that really hits the chord for real estate agents. Similarly, they are in a brokerage where often they’re not getting that many leads within their brokerages. They have so much competition. There’s 100 other agents, and it can be cutthroat sometimes.

[00:20:31.960] – Sean

So, yeah, walk me through. What do they do? Do they transition from their brokerage to becoming a franchisee? Is that what you’re seeing?

[00:20:40.440] – Karim

Yeah, basically, that’s what it is. So if you don’t mind, I want to answer that in just a second, because I was actually leading to that. So with this model, they actually own an exclusive territory. So meaning not only they don’t have any competition internally. So say you own Boston or Cape Cod or any leads, any clients, the whole market is yours. Anyone reaching out to Properguides, listing on Properguides that come and so on are your clients. So being one out of one compared to one out ofthe rest within your same office makes a lot of sense. And the third thing being a business owner, because when you think realtors, they often think that they are business owners, they are actually contractors. They’re going from one deal, one commission to the other. They did want initially probably to be an entrepreneur and a business owner, and very few do because a business owner, as an agent, you basically need to own your own brokerage and it is very tough and so on. So as a franchisee, you own your own business in every way. So now how do those agents come in the property-guide-franchise model?

[00:21:52.690] – Karim

We actually do have a sister brokerage. It’s called PDDR, Property Guys Direct Realty that we’ve opened about seven years ago to allow, specifically, real estate agents to come and hang their license within that brokerage, or to allow franchisee to get license because guess what? For the longest time, for 20 plus years, property and franchisee were actually not licensed or they didn’t need to be licensed. They could have been, but they didn’t need to. This whole model we talked about prior, you actually don’t need a real estate license to own a franchise. But if you do, all of a sudden, you literally double your revenue and profit overnight because all of a sudden the licensed services, you can provide them yourself instead of delegating them. And all of a sudden you can work with buyers. You work with about 100 listings, 100 sellers per year, maybe 40 % of them, 50 % want to buy. They’re also your clients. They buy with you. You get the commission on representing them. And so your revenue and profit has doubled overnight, basically.

[00:22:59.010] – Sean

Yeah, let’s get into that because people want to know about the opportunities out there to make money, whether it’s active or passive income. So walk us through the process of somebody who I’m interested in joining Property Guys as a franchisee. I want to make some money. Let’s get into it. What does the process look like? How long does it take to ramp up? And then we’ll talk about how much. I know you can’t give guarantees, but I like to talk about a range. There are people that have been on the show before that provide a range of what income you can expect.

[00:23:28.930] – Karim

Yeah, absolutely. Obviously, you cannot give guarantees, but I’m always happy to share numbers because we’re very transparent. Even the price of the franchise right now in and so on, that’s no problem. So first, what is the process? So the process starts with me. So my job is actually not to sell franchise. I always like to highlight that because I have no interest in just pushing a franchise on someone who would not be a good fit. I have no interest, but it would be detrimental to the neighboring franchisee, to the company, to the reputation, and so on. So my job is really to guide people to give all the information they need, help them along the way, connect them with people within our system, within Proper guys, other franchisee, people at Home Office, Marketing Department, whatever they need to make the best educated decision to help them also maybe crushing the numbers and their market research and so on. I’m a Sherpa. I’m a guide along the way. If we’re a good fit for one another, the whole process takes about, it can take as little as three weeks. And on average, I would say maybe three months.

[00:24:39.050] – Karim

It can take longer because again, we don’t put any pressure. We’ve talked to people who then reached out six months or a year later and we’re like, You know what? Now is the good time is the right time for me. So it doesn’t matter when is the right time for them and for us. The process is those, sorry, just to go back, I lost my train of thought here, we have those conversations to make sure they have a good understanding, they talk to everyone and so on. We share the FTD. So you’re familiar with the FTD? Most likely it’s the Franchise Disclosure Document, which discloses everything from a financial and a legal standpoint about the company.

[00:25:13.830] – Sean

Yeah, you don’t have to go too deep in the weeds. We’re just looking at high level here. Perfect.

[00:25:17.540] – Karim

Yeah. And then from there, once they sign and they paid for their franchise, they actually scheduled to start the PGU, Property Guides University, which is very thorough award-winning training program in three parts: online, in-person at the headquarters, and then ongoing for the first three months with the coach. And so basically all of that to say that not only franchisee can get started to make money right away, they don’t need a store and office. It’s a home-based business, so they don’t need huge expenses. They don’t need to hire anyone because the company provides a lot of services where they would need to buy your marketing, graphic design, web design, a call center, and so on. And basically, they hit the ground running, they start making money, usually the first month, and they usually get a full return on their investment within 6-12 months, which might seem like -.

[00:26:17.090] – Sean

I was leading right up to that. I heard a cost. What is the upfront cost to join?

[00:26:22.990] – Karim

Yeah. So the franchise fee right now in Massachusetts, and I think it is similar in the neighboring states, it is between 30 and 40,000, depending on the territory, to own the franchise. Then the operating capital, what we recommend is to have between 30 and 60,000 can be more, and that’s great. But between 30 and to $6,000 to operate the business, it can be for the first six months or the first year. Again, it depends how aggressive you’re going to be in your marketing and the type of marketing you’re going to do and so on. But basically, someone with 100K can get started.

[00:26:58.310] – Sean

Let’s break that down. So it sounds like 30 to 40K paid to the franchise to set up your own franchise location. Then you said, did you say 40 to 50,000?

[00:27:11.820] – Karim

30 to 60.

[00:27:13.440] – Sean

30 to 60,000. Now, is that capital you should have on hand that you spend yourself on marketing and advertising?

[00:27:20.770] – Karim

Correct.

[00:27:21.510] – Sean

Got it. Okay. Yeah. Yeah. I was going to ask, okay, what is a day like a successful day? Because I know there’s a lot of people out there that I know a lot of realtors like this. They become a realtor and they sit and they sit and they sit and then think people are going to come to you. You got to be knocking on doors. You got to get in between people the moment when they’re listed. I want to sell my home to listing it. How do you get to that moment? So walk me through what are the successful strategies these people are using with Property Guys to really ramp up the revenue. Then we’ll get into revenue expectations.

[00:27:56.550] – Karim

100%. What I’ll do, if you don’t mind, I’m not used to to do this, but I’m actually going to switch to this because, as you can see, we have a very unique sign, very different than any other for sale signs out there. And so this has been in the core of the success of Property Guys, especially initially and even ongoing, the brand recognition. Because we’re doing something unique, we also need to be visibly unique. So leading to what you just asked, often what franchisee do at first is to offer some free listings, people who want or who are selling, to offer them a sign and the exposure for free and within a narrow area, a neighborhood or two, and just get the brand recognition and the word of mouth, do its work. On top of that, usually they have their car wrapped and all the marketing that you can do as well. Yes, you mentioned door to door and flyers and networking and all kinds of advertising, but the actual offering some listings either at cost or free, whatever you want to do, that’s what very much gets the ball rolling. Because at the end of the day, if you think about it, what the franchise does, it is business development, the core of his business.

[00:29:10.490] – Karim

It is not to follow every listing from start to finish. Again, at any given time, they have about 10-15 listings. So they do, on average, about 100 listings a year on average. So they cannot be with every listing from start to finish. Their job is to grow their business, grow their brand locally. And that goes by a lot of marketing online and on the ground. And once people have actually sold their property for zero, for five grand, even for ten grand, say, even if the price was ten grand and they save dozens of thousands of dollars with this experience, you can imagine how they’re going to go out of their way to promote Property Guys, to promote the franchisee. And we’ve seen, funny enough, we’ve seen a lot of franchisee over the years coming from being clients, loving the experience, loving the model and be like, Hey, I want to do it myself, and acquiring a franchise afterwards. I couldn’t tell you how many, but I know many franchisee who had that exact experience.

[00:30:13.190] – Sean

What I heard was some freemium play, which is really popular for businesses that really want to scale up is how do you lower the barrier to entry as low as possible, get rid of the risk. And it sounds like there’s some strategy you can use there, whether it’s signage, like physical signage. Can they have maybe a listing on propertykys. Com? Maybe it’s their home with limited photos, limited information? Yeah, exactly. Okay. And if you want more, then it’s almost like the best, in my opinion, some people would argue this, but the best way to sell people is don’t sell them at all. You give something to somebody and they sell themselves. And it sounds like your consumers are doing exactly that. They can test drive it like, Oh, okay, I see how this works. I can level up. I can pay a little more and get more features, more exposure. And that’s where the money is made.

[00:31:10.170] – Karim

Exactly. Yeah, you’re absolutely right. And by the way, bear in mind, remember that in those packages, we’re not just replacing the commission to the agent. We’re including everything, including the lawyer and drone shots and 3D modeling of the property and video showings and so on. So when you see all of that for, again, only five grand, it is just a no-brainer. And so what I just told you here, even if the franchisee goes at the door to door, that’s basically the pitch. So it is not, Hey, do you want to probably sell your property? I can give you an appraisal, like agents do. I can tell you how much I can make out of it. Here is like, You’re looking to sell your property. I’m going to save you 50 grand. Sure.

[00:31:56.900] – Sean

Yeah, right. There’s that, the money savings. But it’s like, Hey, I’ve got something here. You can do it yourself. It’s free. Get in, start using it, and let the platform sell. Pretty much like I said earlier, sell itself. How is the title handled in this process?

[00:32:15.000] – Karim

What do you mean?

[00:32:16.280] – Sean

When you’re buying a home, the transfer title or selling it, how is that process handled? Do you deal with local title companies.

[00:32:27.240] – Karim

Around each franchise? Title company or real estate attorney, local real estate attorney or title company that we partner with. So it is part of the pros. We call them the pros. Those are the exclusive partners that we’ve selected. And that’s one side part of my job is to actually select for each area where we are to select those professionals or do the pre-selecting, then the franchisee has his say. He can bring his own attorney that he’s been working with for 20 years, or you can use the one that we have pre-selected. But when you think about it, that’s another aspect. Thank you for reminding me, when you have, again, let’s just use the lawyer, the photographer, the stage as an example, they’re going to get the whole flow of about 100 listings a year coming on their desk as their client, not as leads, not as warm leads, as clients. So this lawyer that might charge, I don’t know, 1,500 for the closing of the deal is getting 100 clients channeled to him per year. So you can also imagine how they are going to promote the property guys and the franchisee and that franchise model because it is in their best interest.

[00:33:39.680] – Karim

And also, once again, often those are the one acquiring a franchise. They are amongst the people that I like to talk to, mortgage brokers. One soon-to-be franchisee is actually a double franchisee. He is a very successful mortgage broker. And adding a franchise on top of that will basically allow him to cross-pollinate the client- It’s huge. -from the franchise to his mortgage and vice versa. It is huge. Yeah, the potential.

[00:34:05.920] – Speaker 3

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[00:34:34.130] – Sean

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[00:34:52.830] – Sean

Of the page. Okay, back to the show. What’s a proven marketing strategy? I just want to go a little deeper here, see if we can uncover the secret sauce on how somebody, like a case study, you don’t have to give names, but somebody that has really been able to bring in a lot of leads into this business, and then we’ll lead right into what revenues this can generate. So do you have a case study? Yeah.

[00:35:16.140] – Karim

I have two that come to mind, two extremes, because once again, even from the franchisee standpoint, it is somewhat customizable. So in a franchise model, you have to follow the process and so on, but you actually can customize it whether you want to be more hands-on. And I have a case study. His name is Christophe. He’s in Alberta in Canada. He’s been one of the top five for many, many years. I think he had his franchise for maybe 15 years, I’m not exactly sure. And he’s been one of the… He’s super hands-on. He is known as the property guy in his community. Everyone knows him. He gives property guys, lollipops, actual lollipops to kids, and he has all those branding. And he’s super hands-down, who’s super out there. And he even still does door to door because he loves it. And he puts himself as the face of the company in his local area, and he’s doing killing. I think he’s over 150, these things a year, maybe even close to 200 sometimes. So yeah, that’s amazing. And we can talk numbers afterwards. Then I know another one who jumped on, I want to say 2019 or 2020, so fairly recently and very quickly.

[00:36:29.590] – Karim

So he came from a background in he owned a car dealership. So he was very business-minded. He came with this model with the mindset of I’m going to grow a business. He doesn’t necessarily want to be hands-on. So he put a lot of money in marketing, I think maybe 100,000 a year, so way more than a lot of franchise he can afford. But he grew to three territories in three or four years, and he dominates a huge market in British Columbia, so near Vancouver, and also very high value market. And he’s also doing great, but in a very different way, you know what I mean? Where he has maybe smaller margin per package, but he does a lot of package on multiple territory.

[00:37:14.520] – Sean

Got it. Okay, well, let’s jump right into the math because I’m running my own math, but I want to hear it from you. So what are the expectations here? Low end, high end.

[00:37:24.330] – Karim

That’s something that I never answer specifically because I prefer to let someone do the math, and it is not that complicated. Again, if you take an average of 100 listings a year, the average package price is about five grand per package. Five hundred thousand. When I say five grand, it basically ranges all the way down from maybe $1,000 when it’s the for sale by owner, DIY package, it actually can go all the way to nine, I think 10,000 is the upper limit. Not only in a market where that works, not in every market you can offer packages at 10,000, we want to be nicely different than a commission model. So in a market where the commission would be closer to 100,000, 10,000 makes sense. But that’s also where it would include the licensed services, like we do your own showings and we write the offer and we do the negotiation and a whole bunch of other services where 10 grand looks like a super cheap package. So that’s why I say five grand is usually the average. So that’s your revenue on the selling side of things. Per package, typically the profit margin is about 50 %.

[00:38:36.520] – Karim

Why? Because you actually set your package price based on what’s included in it. I realized it’s actually an exclude. I never went that deep on the podcast. Those are conversations that I have with.

[00:38:47.650] – Sean

Potential clients. Welcome to payback time. We go a level deeper here at payback time.

[00:38:54.360] – Karim

Yeah. So you take your package, you have those services again, 1, 2, 3, 4, 5, six. This will cost you, and obviously when we have a lawyer again or photographer, they’re going to reduce their normal price because they’re going to get so much volume from you. So you get this package that might cost you again $2,500. You’re going to price your package at five grand. Some add 40 %, 50 %, maybe up to 60 % profit margin. And it can also vary depending on how the market is doing or where you at compared to your goals, whatever. So per package is typically about 50 % profit margin. Actually, I’m going to keep that for the end. Then you have your expenses. The expenses, the main one really is marketing and advertising, and that’s really up to you. Basically, you get whatever you put in it. You can be again, very hands-on door-to-door and flyers and do a lot of networking and things like that. You do a lot of things yourself, maybe spend less money, but you have to spend more time, or you spend more money on TV and radio and Google ads and Facebook ads and so on and so forth, and you’re less hands-on.

[00:40:04.030] – Karim

So that’s very variable. I couldn’t give you any numbers because, honestly, that’s something I don’t want to say something that is not accurate. Yeah.

[00:40:12.450] – Sean

Could we say this just like a blanket statement here? Let’s say average cost for a consumer, let’s say their property is about $5,000, you times it by a hundred. You’re dealing with about 500 grand in gross revenue. You cut that in half has got to go to all the costs within. So your take home would be you could say $250,000. Is that realistic? Is that what somebody can aim for?

[00:40:38.650] – Karim

Sorry. No, sorry. To be honest, I zoned out for a second. I didn’t follow- Too many numbers. Sorry, my mind sometimes goes blank. I was looking at you.

[00:40:51.160] – Sean

I’ll rephrase that again. Let me go back. So average price, $5,000. You’ve got a hundred. You want to do a hundred listings a year. There you go. You got 500 grand in gross revenue. You’re going to cut that in half because half of it is going to the cost. It’s like your advertising, your legal, your photographer, all that good stuff. So take home could be $250,000.

[00:41:14.000] – Karim

Yeah. So out of that, then you can remove whatever you want to put in marketing, basically. So the marketing, what I was thinking about, it can be, I guess, as low as two grand and it can be as high as ten grand a month. All marketing and advertising included. That’s why it’s tough to give a specific number. There is one thing that I didn’t mention, which is there is one fee to the franchisor, a monthly fee, that is about 1,800 a month. And the reason I’m mentioning that is because there is just so much value within this 1,800, it’s all the services provided ongoing by the franchisor to the franchisee. So that includes obviously all the tech, so the CRM and the website and the SEO. That includes the marketing, graphic design and the marketing department, the marketing strategy and so on. That also includes an in-house call center that does lead generation, that does inbound and outbound calls, get some leads for you, take on the calls from potential buyers for each of your listings, schedule the showings, and so on and so forth. So a lot of the position where you potentially would need to hire, you actually don’t need to because we’re getting all of that included within this 1,800 bucks fee a month.

[00:42:30.470] – Karim

So that’s something to include. It’s very minor, but I wanted to mention it out of full transparency.

[00:42:36.560] – Sean

I get it. It’s like you’re running a business here and my background is enterprise software, and it’s like, yeah, you’re going to have monthly fees and 1,800 bucks is a drop in the bucket. I mean, we’re going to put a few more zeros on the end of that. And you’re dealing with enterprise software. It can be millions of dollars. But yeah, I think that would almost be if a franchisee would scoff at that. It’s like, What are you doing here? Don’t even move forward like you were scoffing at that.

[00:43:07.300] – Karim

I actually like to mention it specifically because it actually it is saving the franchisee having to hire three to five different people within their franchise and paying maybe probably ten times more in payroll. So it is something I actually do enjoy mentioning because there is just so much value right there. Back to question numbers, because all of that I’ve been talking, I kept something on the side here. Everything here, it is on the selling side of things. But on top of that, as I mentioned earlier, if you are also licensed and you might even hire some licensed agent under you, well, all of a sudden, you can work with buyers, any buyers, years. You can work with all your sellers who want to buy, which is often 30 %, 40 %, maybe 50 %. So we’re talking 30 or 40 or 50 people per year, and you get the commission out of all those deals that are back up in addition to what you’ve done on the selling side of things. And there, there is also a lot less expenses, a lot less overheads on that side as well. So you see how it has been a game-changer about six, seven years ago when we opened the door for franchisee to be licensed or to get their license while they’re franchisee.

[00:44:23.630] – Sean

Got it. We won’t dive into that too much here. No. It’s like, okay, so there is expansion revenue opportunities within this model, which is great. But what would be, like I always like to title our thumbnails and our marketing with some number that jumps out. What is a realistic expectation? Let’s say within the first few years, what revenue? Let’s say this. What take-home income can people be expecting? We’re talking six figures?

[00:44:52.360] – Karim

Yeah, of course. So I want to say anywhere between 150 and 450, 500,000, pretty large window just to keep it large. Because we have franchisees that built way over a million dollars a year in revenue and others that started. We have a couple of franchisee this year, new franchisee who reached 100 of these things in less than one year without finishing their first year. So it is growing. And with the state of the market and the industry as it is, you probably heard of the lawsuit with NAR and the killer, Killer Williams, and basically the state of the industry as it is, it is tending towards this model, model that doesn’t include commission and a model that put the client first. So we’re in prime position.

[00:45:41.790] – Sean

You are, like I said earlier, very disruptive. I always like to talk to the audience a quick, add my two cents here. This is a model that if you are interested in real estate, you’re getting on board with the disruption, that’s positive. But just as mine, and you can speak up here, Kareem, is going to be a hustle because I’m looking at the math here. If you want to do 100 listings a year, break that down per month. You have to do about eight per month, two per week. So you got to be talking to a lot of people. And I would get super laser-focused on one marketing strategy. I want to try 50 things. Money is going to go up the door faster than you can bring it in. So I would be in as many networking groups, talk to as many people as possible, and then focus on one paid marketing strategy, get those people in. But you have two… You got to be hitting two per week, two listings per week. And if you’re falling behind, you got to put the gas to the floor, figure out a way. How do we get hustling in getting people into this platform as fast as possible?

[00:46:43.380] – Karim

Yeah, you’re very right. But I would say partially in the sense of that’s the duty. I’ll say why I mentioned why I say that. Because earlier when I mentioned being exclusive in your territory, being one out of one, and often it’s very large territories, including multiple communities and cities, that means that a non-negligible portion of your leads and clients just come organically from the brand recognition, the work that Propagize does that I do statewide, that the neighboring franchisee do all their marketing and advertising and their success ripples into your territory. It doesn’t stop at the border. So you do have a portion of your leads and clients that come just naturally, organically. You have also a very substantial portion of word-of-mouth and repeat business, more than any given agent, I can guarantee you that. I know franchisee that have 40 % of their leads and clients have just come from repeat business and word-of-mouth. Because again, someone who has had such an experience saved dozens of thousands of dollars in the process, they go out of their way to refer you. And then obviously on the marketing and so on, and yet there is a large portion, maybe the majority portion is the work that you put.

[00:47:58.310] – Karim

And in a franchise or any franchise orthe business, you get whatever you put in. That’s why you become a business owner.

[00:48:05.360] – Sean

Are you in Milwaukee, where I’m based?

[00:48:08.440] – Karim

No. As far as I know, not. But I don’t have the freshest info on where are going to be the next state.

[00:48:15.520] – Sean

Just curious. We got listeners from all over the world, but where I live, I’m like, I haven’t seen your logo, but I could see this going places.

[00:48:22.180] – Karim

So we don’t exist yet. I don’t know if there is someone like me that is going to open the state of Milwaukee, but if anyone in the US is not just interested in a franchise, but to actually becoming a franchise developer like myself in their own state, you are also more than welcome to reach out. I’d be happy to help with that aspect too. Okay. Well, cool.

[00:48:42.540] – Sean

This was really educational. Thanks for sharing details on propertyguides. Com. If anybody wants to check it out, I can certainly reach out to you. But first, before we have you point people in where you really want them to contact you, whether it’s LinkedIn or Twitter or whatever, let’s get into the rapid-fire round. This is the part of the episode where we get to find out who Kareem really is.

[00:49:03.740] – Karim

If you can- I’m ready.

[00:49:05.170] – Sean

-try to answer each question in 15 seconds or less. All right, here we go. What is your favorite podcast?

[00:49:13.640] – Karim

So The Risk of Disappoint, I actually don’t have one. I do listen to a whole range. And since I’ve been doing more podcasts as a guest, I actually discovered some great one, including yours, that I want to listen more consistently. But I don’t have one that stands out, except maybe Joe Rogan, but I also do have some criticism on him.

[00:49:37.880] – Sean

He’s been recommended a few times. I could say that. All right, next question here. What is the recent book you read and would recommend?

[00:49:45.990] – Karim

An hour ago, someone gave me the biggest recommendation on the book, Influence. We were having an old friend of a long time who has multiple businesses, very successful guy. I do look up to him and we help one another. We were just on the phone and he was saying to me, You have to today start to listen or read Influence. So it seems to be good. I haven’t started it yet. Besides that one of my top books in business, the E-Myth and The Four-Hour Work Week.

[00:50:17.970] – Sean

By Tim Ferris. Yeah, the classics. Four-hour Work Week was that turned a light bulb on going back 10 years, that’s for sure. All right, next question. What is your favorite movie?

[00:50:29.750] – Karim

Oh, I’m in between Fight Club that I watched thousands of times and The Green Line, sorry, with Tom Hanks.

[00:50:41.630] – Sean

Very different. The Green Mile?

[00:50:44.610] – Karim

What is that? The Green Mile, sorry. Yes. Because I watched it in French the first time. It’s La Ligne Verte. I grew up in France.

[00:50:52.500] – Sean

Got.

[00:50:52.870] – Karim

It.

[00:50:54.560] – Sean

Well, they’re good movies right on. What is the worst advice you ever received?

[00:51:02.040] – Karim

I would say now, looking back, it would be to have gotten an MBA because I never used it. In France and all around the world, it is just the normal trajectory. You have good grades, go get a good degree, and then go get a good job, and whatnot. I got an MBA with multiple… I went all over the place within it. I didn’t know what I wanted to do. I got it. I’ve never the actual paper, the actual diploma, and I’ve never used it, never applied for a job. I’m like, Why did I spend so many years and money into it?

[00:51:40.460] – Sean

Yes. All right, flip that equation. What is the best advice you ever received?

[00:51:45.990] – Karim

Best advice? Sorry, I’m blanking here. Actually, it’s besides business, but a few years ago, I was living a very Edenistic life, and basically someone told me to look or look back into Islam, and that’s something that basically made me reconvert to Islam. I was never a big believer, and that really flipped my whole life upside down, both in the personal life, how I lead my life, how I deal with people, and my business as well, how to run business ethically, respectfully, with generosity, and so on and so forth. And yeah, that literally turned my life upside down.

[00:52:33.050] – Sean

Okay. I’m curious, and we could dive into this offline even further, but were you raised within Islam and then stepped away? Yeah.

[00:52:43.740] – Karim

I wouldn’t say that I stepped away. I was raised in a Muslim family, in a Muslim background, but I grew up in France, so I wasn’t actually very interested in religion initially for whatever reason. And growing up in France, I wanted to fit in. And so party and drinking and so on. Actually, I’ve never been, even as a teenager, especially as a teenager and onward, religious or interested by religion. And very suddenly in 2017, that’s when one advice and a couple of things happened in my life that literally made me open my eyes, look back at how I was living my life, and got interested in learning more about my religion. Even though I was calling myself mostly, I actually didn’t know anything. And that process literally changed the course of my life from where I was located and the way I was dealing with every aspect of my life, for the better.

[00:53:43.910] – Sean

Sure. All right. And last question here is a time-machine question. If you could go back in time to give your younger self advice, what age would you visit and what would you say?

[00:53:52.830] – Karim

I think I would go not that far in 2020, which is when, really, I had my cleaning business that I mentioned earlier, and I was already in process of removing myself from the process, from the business to work on the business. But I feel like I was too complacent in the sense of all the business is running himself. So I took a step back instead of doubling down. And now I have the opportunity to work a lot more, reinvest in the business, try open new department, grow in more cities, turn it into a franchise model, as we talked about earlier. I had that opportunity. No regrets, obviously, but I feel like I missed it. I could have done things a lot better. And now the business is 10 times bigger than it currently is.

[00:54:44.860] – Sean

Sure. Got you. All right, Kareem, where can the audience reach you?

[00:54:48.810] – Karim

Linkedin to reach me personally is the easiest and the best way and very approachable and very active on LinkedIn. So it’s just my name, Kareem Kareshny, I’m the only one with this name. So it’s very easy to find me and to strike the conversation. But if they want to learn more about Property Guys specifically, they can simply type Property Guys, Massachsuset on Google, and there will be not only my website, but also Property Guys, various websites with different type of resources, so they can learn a lot more even before contacting me if they want to.

[00:55:25.180] – Sean

We’ll have all the links down below. Kareem, this is awesome. Thank you so much for your time. I love learning about this business model. This is pretty cool.

[00:55:33.550] – Karim

Thank you so much. I had a blast, and I really enjoyed not only your questions, but the fact that I went in some direction that I haven’t been in any other podcast conversation. So, kudos to you.

[00:55:46.300] – Sean

Thank you. Appreciate it. All right, we’ll see you.

[00:55:49.230] – Karim

Thank you, Sean.

[00:55:50.160] – Sean

Hey, I’d like to.

[00:55:51.010] – Sean

Say thank you for.

[00:55:51.910] – Sean

Checking out this podcast. I know there’s a lot of other podcasts out there you could be listening to, so thanks for spending some time with me. And if you have a moment, please head over to Apple Podcast and leave a five star review. The more reviews we get, especially five star reviews, the higher this podcast will rank in Apple. So thanks for doing that. And remember, this show is for entertainment purposes only. If you heard any stocks mentioned on this podcast, please do not buy or sell those stocks based solely on what you hear. All right, thanks for your time. We’ll see you.