Why Real Estate Brokerages Are Selling at Record Pace | Mark Lukes

Mark Lukes (00:00)

I mean to put it in perspective, you know, we on average over the last we’ll call it the REMA is coming up on about 10 years old now, a little bit less, but we’re getting close. ⁓ on average, we would have done something like twenty to twenty-five deals a year, something in that general range. But we’re on track to do a hundred, maybe even a bit more, 125 even, ⁓ in 26 leading into 27. So the amount of brokerages and title and and and mortgage companies is just accelerated through the roof.

Issa Hanna (02:00)

Welcome back to another episode of the Real Estate Pros Show. Today I have Mark Lukes here with me, a seasoned investor here to share his unique knowledge of Real Estate with us. Mark, welcome.

Mark Lukes (02:10)

What a pleasure. Thank you for having me.

Issa Hanna (02:11)

And I am super excited to have you. ⁓ you’re in a in a very unique ⁓ facet of the Real Estate world. So can you kind of give the people ⁓ what you do?

Mark Lukes (02:20)

Yeah, so Real Estate mergers and acquisitions, just REMA for short, because that’s kind of a mouthful. ⁓ yeah, we’re we’re a boutique MA company. So we are essentially a a an a mergers and acquisition for the Real Estate industry and only the Real Estate industry. So if you if you are in a brokerage or a title or a mortgage or a little bit of prop tech ⁓ and you’re looking to sell your company, because we’re primarily a seller’s representative company, but if you’re looking to maybe sell your company or at least get an idea of what your company’s worth,

⁓ we’re we’re definitely the the company for you.

Issa Hanna (02:52)

Definitely. And we were talking earlier and we said that ⁓ you know, in the past, mer your you said mergers were twenty five, twenty six year year. Now they’re they’re through the roof. yeah. Can you kind of shed some light on why why you think that’s happening?

Mark Lukes (03:04)

Yeah,

so I mean to put it in perspective, you know, we on average over the last we’ll call it I the REMA is coming up on about 10 years old now, a little bit less, but we’re getting close. ⁓ on average, we would have done something like twenty to twenty-five deals a year, something in that general range. But we’re on track to do a hundred, maybe even a bit more, 125 even, ⁓ in 26 leading into 27. So the amount of brokerages and title and and and mortgage companies is just accelerated through the roof. Now,

Everybody has their theories as to why that happens to be. I I tend to roll it into maybe three basic points, which is just the volatility in the market. ⁓ you know, nobody in business likes volatile markets, period. End of story. It’s it’s not good for anybody, and that causes fear, and fear causes people to make choices. Okay, we understand it. ⁓ really, number two is is the aging of this industry at large. So

I’ve I’ve used this stat a number of times, which is, you know, the average broker owner in the industry is well into the retirement year. So we’ll say 65 plus, 70. We’ve got some brokers we’re working with right now who are in their in their 80s. ⁓ that’s a very much an aging population. I mean, most people who retire out of, you know, some other industry, they retire at 65 or 70 and collect their social security and off they go. Well, this industry is just not doing that. So

That will continue to accelerate for quite a few years, I suspect. And then last but not least is just the industry consolidation at large. I mean, anybody who’s keeping their eyes open understands the Compass Anywhere merger or the Real REMAX merger or the EXP Next. Like these are big, big deals. And that has sort of set the industry in motion to then the consolidation kind of filters its way down to ever smaller.

⁓ groups who want to consolidate to try and capture what, you know, territory or agent count or production. Like there’s a lot of variations to that. But that seems to be the the most obvious reasons to me.

Issa Hanna (05:53)

Definitely. And and you’re an expert in the field. You’ve built five companies. This is your sixth one. ⁓ so we would definitely ⁓ want to listen to that advice. ⁓ and and you know, the volatility in the market ⁓ is one thing, and and that’s one thing I suspected, but you did open my eyes to the aging population. One thing about us Real Estate guys, we’re not ready to throw the towel in that 65. Somebody calls us to list or you know.

Or or or we’re a broker and it you know, and we’re running our brokerage. We’re all the way there, you know. It’s not till we get, you know, up there and like you said, the seventies, eighties where where they just wanna you know, they built it, they wanna sell it out and and relax and and concentrate on the family and you help them facilitate that. One thing I also wanna pull out from what you said, you you said you’re a boutique company, which means

smaller, not a big box company. No. why I think this is important, especially with a a head owner like you who has tons of knowledge is you actually will care about your client. You actually they’re just not another number. They’re literally your your client. You’re doing everything in your power to get them the best possible deal. ⁓ and then you specialize mostly in sellers, you know, you’re not afraid to tell a seller if he gets a low ball offer or something.

You’re not afraid to give them the message, you know, and you’re not afraid to be straightforward with them. That’s the kind of guy you want in your corner when you’re doing big business like that. So I I just wanted to highlight that about you. Yeah. I appreciate that. And I wanted to shift gears a little bit, you know, Real Estate and and and just any profession, period. mergers, acquisitions, everything. ⁓ you know, we get into our field of knowledge or our field of business with zero knowledge. I want to know how you got started in this.

Mark Lukes (07:38)

⁓ Lord, you’re gonna make me go back. I’m gonna date myself hard, but that’s fine. I started my my first company in the 90s, and all of my companies, in some sense, have been in the in the Real Estate industry. So I go back far enough that I was building websites. ⁓ like this was when the web was coming out of, you know, dial up and into, you know.

whatever the next generation I don’t remember what the generation was after that. But you know, websites were going to think. So I had a lot of Real Estate agents who I was building websites for. Okay. So then you flash forward a number of years. And and the but the pivotal point, the sort of the aha moment or the light bulb moment, there’s a lot of variations on this, was I was working with a with a broker in in Tampa, Florida. I live in Florida. And ⁓ I I had heard this same conversation. Again, he was in his seventies and this was almost ten years ago now.

So he we had a conversation kind of privately in his office, and he said, God, I’m just sick of this. You know, I just want to spend time with my grandkid. The agents are like herding cats, and I’m just, I’m just kind of done with it. He was a REMAX guy, and you know, seven franchises and a title company and a couple hundred agents, like the worst version on the planet to try and do something like this. And I’d had some MA experience in some of my previous, you know, lives. But I said, Well, look, I know some people, let me see what I can do. And

And to be fair, it took us almost a year because it was very complex. ⁓ and I was sort of learning on the fly in some sense how to how to translate my my MA experience into this particular field. It’s not, this is a very different industry. This isn’t like buying a restaurant where you just go count the pots and the pans and you assign a value and then that’s what you offer. This is, in some sense, you’re you’re buying people, you’re buying, you know, people in the sense of you know, the customers, that sort of thing. So anyway.

Long story short, I realized there was a huge hole. ⁓ there was only again a handful of companies that do this anyway, and almost none of them were seller side representatives. So I said, we’re gonna change the rules. And so that was how the whole thing started. I I I had the good fortune of being in the right idea or being with the right idea at the right time. I had a knowledge base of people who are absolutely spectacular, who

Are smart enough to know when I have a good idea and brave enough to tell me when I’m being stupid. And you know, that’s what a good owner should do. And here we are, almost 10 years later, and we’re basically the largest MA company, let’s call it, ⁓ in this space. And yet we still only have 11 employees. You know, we’re still very much a relationship company. We’re a hands-on company. I know almost every one of our clients personally. ⁓ and that’s the way I prefer it.

Issa Hanna (10:51)

I love that. And and ⁓ with your knowledge and and and with you only having the eleven employees, if somebody were to want to sell their brokerage, that’s instant access to the top level of the company as opposed to, hey, I wanna go with the big box guy that I can’t get a hold of. I mean, guaranteed, I don’t care how big you are, you’re not gonna talk to the owner of the big box company. ⁓ Mark is right here for you.

Mark Lukes (11:14)

Yeah. And that’s assuming by the way the big box company even understands Real Estate. It is not like again, it’s not like buying a restaurant or something like that. There’s a lot of nuances to this side of it. So

Issa Hanna (11:25)

Actually that’s a great point. in the Real Estate market, like you said, you’re buying when you’re buying one of these brokerages, when you meant buying people, you’re buying like the volume of sales that they kinda do every year. Yeah. Also the the agents that they that they hold if it’s a Real Estate brokerage, you know. So ⁓ the you know, the numbers are not as as as cut and dry as if you were to buy a restaurant and like so

Being able to speculate and being able to come up with a number even ⁓ is a job unto itself. So yeah. Definitely ⁓ definitely good point you brought up there. I I just realized that. ⁓ I want to talk a little future now. You you’ve been in business ten years. Where are we gonna see ⁓ you guys ten years down the line?

Mark Lukes (12:07)

Well, that’s an excellent question. you know, the the best case scenario is that I we continue being who we are and and ⁓ and and helping sellers and and helping all the clients that we can. This is a funny space. Would it surprise me if some P group came in and said, hey, we’d like to buy you up? Sure it’s possible. But I can’t ever imagine selling I I’ve had this conversation, you know, for example, taking REMA and you know

And I’ll just pick a name. It doesn’t matter. I mean, you know, again, Compass or something, you know, pick one KW. It doesn’t really make a difference. And them wanting to step in. But the problem is, is that we have a great relationship with with our buyers network, which is effectively all of the brands and all of the big regional players. And they’re they’re how we get projects done rapidly and get them done correctly with the right buyers, with the right sellers, type of thing. If you lose that independence, ⁓ the entire game kind of falls apart because one of the reasons that people come to us.

is we’re a third party company. I don’t have any loyalty to the brands or the buyers. I have loyalty to my customer. And if you take that side of it away, ⁓ it all it all goes to goes to hell in a handbasket pretty quick. So I suspect that we will continue to stay who we are, I hope. And, you know, everything else is up for grabs after that.

Issa Hanna (14:04)

I love that answer. You’re gonna keep your identity. ⁓ you know, you built this ⁓ in in your own form, in your own image. So that that’s you know, very important to you. I love that. ⁓ and now I wanna kind of shift to I have a lot of people that watch our show that are just getting into Real Estate, they’re just getting into their profession, whatever it is. ⁓ and they and they struggle to establish that first business relationship and they struggle to grow their network. Can you give them advice on on how to

How to do that.

Mark Lukes (14:34)

Yeah, sure. I mean, look, in some sense, Real Estate, an agent, let’s just say, you know, an individual agent, has the very same problems that we have on the MA side, which is it’s a relationship business. You’ve got to get that first one under your belt. And and it’s the first two or three or four or five, whatever it is, that are always the hardest. I mean, that’s just the nature of what we do for a living. Treat your people right, your sellers in this case.

Be as honest and as transparent as you can with them. Just say it like it is. Even if it sucks, just say it like it is, and it’ll all be fine. And if you can do that, if you can remember who you’re you’re servicing, guess what? You will get more repeat business. You will get more people coming your direction. There are way too many stories out there, and I mean there, you know, again, you’re in the industry as well. There are endless supply of stories who agents who tried to cut the corners.

And to try and do something because they wanted the fast buck. And those agents, you know, either aren’t with us anymore in this industry or are in jail in some cases. And that’s not the direction you want. Just be as honest and truthful and as helpful and you know understand that you’re selling what is effectively the largest you know purchase that anybody typically goes through. I don’t care about this, I don’t care if it’s a hundred thousand dollar mobile home or a ten million dollar mansion.

All of them should be the same to you as an agent. It doesn’t make a difference. If you can remember that, you will succeed. It’s that simple.

Issa Hanna (15:58)

Definitely. and and you know, you guys see this when you watch my show and I ask this question. ⁓ all the successful guys, all the really successful guys like Mark who who come on the show, they give you almost the same advice to a T. Okay. So yeah, be honest, be hold yourself to integrity. ⁓ do your job correctly. You’re gonna win the respect of your client. Word of mouth, and this sounds cliche too, but word of mouth is the best.

form of advertisement. I don’t care how big your marketing budget is. If you if your name is golden in your space, you’ll get more referrals from the golden name than you will a $10 million budget. So ⁓ great, great advice for our viewers, Mark. And now if I have some brokerage ⁓ you know, sitting at home or, you know, they they’re say, you know what, I want that guy to sell my brokerage for me. where could they reach you at?

Mark Lukes (16:51)

best place to go is our website, ⁓ REMA R-E-M-A.global. or you can always reach me directly. I’m happy to I’m sure my phone number will be in the in the notes and all that stuff. Or you can if you want me to say it, I will. I don’t have a problem with that. But Go ahead. Go ahead. (941) 350-6745 And ⁓ if I don’t answer, I guarantee you I will call you back. So you know, that’s that’s how we play this this this game. So

Issa Hanna (17:16)

I love that. So if you guys are sitting at home, ⁓ some of our investor fuel guys, if you guys are sitting at home, you say, Hey, I’ve been thinking about selling my brokerage, Mark is the guy. ⁓ just talking to him for briefly for the last hour, I can tell. ⁓ he is a knowledgeable and most importantly, holds himself to the utmost integrity in business. And and as I said before, that’s the type of people you want to do business with. ⁓ Mark.

I appreciate you coming on the show. I wanna invite you back on the show at a later date, ⁓ just to check your progress and see see how we’re going and maybe pick your brain about some more stuff.

Mark Lukes (17:52)

Yeah, I’d love to do it. Happy to do it.

Issa Hanna (17:54)

Thank you so much for coming on. Thank you so much for enlightening us. ⁓ you’re actually the first and A guy I’ve had in on the show in the last year. So ⁓ Really? I yeah, I think our viewers are gonna are get a good are they’re gonna get a lot from this. So ⁓ man, thank you so much for coming on. and then to our viewers at home, if you guys enjoyed my conversation with Mark and want to see more just like it, hit like and subscribe. I talk to people every day that can bring us different knowledge on every facet of the Real Estate industry. Until next time.

The Real Estate Pros are out.