🤝 How one agent closed 16 homes A DAY in 2022

Happy Friday. This is the Shake 🤝 : the 5-minute weekly newsletter that delivers the most entertaining stories, trends, and insights happening in real estate.

Here’s what we've got for you this week:

• The GOAT 🐐 residential agent

• Crypto mortgages are really a thing

• Where Americans moved in 2022

• Commercial Corner: Netflix making movies in the armpit of America?!

MARKET RADAR

THE GOAT 🐐 RESIDENTIAL AGENT

Meet Ben Caballero, the Texas agent on pace to sell 6K homes in 2022 - that’s nearly a rate of 16 a DAY! According to the NAR, the average residential agent only closes on 10 homes annually.

This isn’t a story of endlessly networking with high-profile clientele or relentless persistence - NYC agents can keep that kool-aid to themselves! Ben simply found a way to make homebuilders' lives easier, while taking a cut from each transaction along the way.

He’d already built a few successful businesses in real estate like The Apartment Finders, a service that helped prospective tenants find rentals in Dallas. He then began to dabble in custom home development, eventually focusing on that while holding his real estate license on the side.

Then, at an age when Ben should’ve been retired, he had his best idea yet.

Exploiting the gap between builders and agents

After a career of playing both sides of the field like Deion Sanders, Ben’s intuition led him to create a nifty process to optimize the way new houses get marketed and sold.

He knew that homebuilders and agents have a complicated relationship - builders aren’t tech savvy, agents typically don’t understand the nuances of selling a new home, and sentiment changes between cycles in the market. This led to builders often avoiding using agents (& more importantly, the MLS) to market their builds.

Ben initially took advantage of this by convincing a Lennar executive to let him list part of their inventory on the MLS. After finding a product-market fit with builders, he launched HomesUSA.com in 2007, a platform that streamlined the builder-agent relationship.

There were 3 main triggers that made this valuable:

1. Builders can seamlessly enter data about homes they want to sell, which then gets uploaded to the MLS in 30 minutes or less.

2. Ben uses his platform to then monitor data and trends in order to give feedback and optimize the listing information.

3. Automated lead capturing connects the builders directly with potential buyers, eliminating the need for buyers’ agent commission.

Now replicate this by the thousands and you have a well-oiled machine churning out listings for the masses. Simple yet extremely valuable in the builders' eyes since he charges a flat fee rather than a 3% cut for a seller's agent.

With about 60 builders among his clients, Caballero’s numbers are something out of a space jam movie: 

• From 2004 to 2021, Caballero sold ~48k homes worth ~$17B.

• The Guinness Book of World Records honored him for the first time in 2016 (3.6k sales), again in 2018 (5.8k sales), and once more in 2020, for his sale of 6.4k homes.

• In 2020, Zillow’s iBuyer experiment sold ~$1.7B in homes while Caballero sold $2.46B.

This is only in Texas btw (I guess everything IS bigger in Texas)… and even with demand beginning to dwindle down, Ben Caballero’s business doesn’t look to budge as he aims to take this platform nationally. Now we know this term gets thrown around loosely nowadays but safe to say Ben is the GOAT residential agent - sorry Ryan Serhant and Altman Bros.

CRYPTO MORTGAGES ARE REALLY A THING

For decades, a home was seen as a safe, valuable asset. Like most things in 2022, there’s a new *chic* way to overcomplicate a staple of the American dream.

Why take the boring US Dollar and use it as a downpayment for your home, when you can use a super volatile asset like a cryptocurrency?

A Crypto Mortgage is simply a residential mortgage loan where instead of cash, you’re using your cryptocurrency as your collateral to secure the loan.

In theory, this sounds like a great way for tech bros to be able to get out of that $6,000/ month lease in the bay and into their own home. Also, in theory, crypto only can go “to the moon” and not drop by 30% in a day right?.... RIGHT?

*Listing Agent in her new Ferrari*: TL,DR ¯\_(ツ)_/¯

In reality, we’re sure that we’ll see crypto mortgages raise in popularity over the coming months. Having a pathway to homeownership where a traditional cash downpayment isn't a must is going to be a great opportunity for many people to purchase a home.

Here’s a quick chart by our friends over at The Milk Road showing the difference between a Traditional Loan and a Crypto Loan:

Definitely some advantages here… especially with the speed of closing.

One last thing to consider if you’re a buyer (or buyer’s agent) in the market right now: there may be some weariness from the listing agent and seller when reviewing an offer with a Crypto Mortgage. Just like there is sometimes a stigma around other low-or-no money down loans, a seasoned listing agent who isn’t familiar with crypto may advise their seller to not get in bed with a crypto-backed loan… just a thought.

WHERE AMERICANS MOVED IN 2022

To quote Yellowstone S1 E1: ​“Man is migratory by nature,” says Dan Jenkins. ​“What you're feeling is instinct, a hunger for new land that's woven into your DNA”

Is this why Americans are flooding out of New York and Headed to Florida? To explore a new frontier? No, it’s because there was a windchill of -10 degrees on Christmas.

Sure, people hate freezing their tails off, but they also hate the high price of living.

Florida and Texas welcomed a combined 550,000 new people into their states, whereas New York and California lost a whopping combined 643,000. The Southern region of the country saw a record 866,000 new people move there, with other records set in Tennessee (country music is just SO trendy nowadays isn’t it?) and South Carolina.

What this means for real estate nationwide: pricing is going to begin to level out. It’s simple supply and demand. It has always been (generally speaking) cheaper to move toward the middle of the country or down to the South.

As more people decide that they don’t want a tax bill in the 5 figures per year while only being able to go outside in a t-shirt for 3 months, migration will continue. Prices in Southern areas are hitting record highs, and we’re already seeing a major price shift in the Northern states that are losing hundreds of thousands of people every year.

THIS WEEK'S EDITION IS BROUGHT TO YOU BY CLOSING PACKS

Riddle us this: what did the realtor waste 2 hours on the day before closing?

Let's be honest, when you have a deal under contract and you spend time shopping for your client's gifts for closing, it's your little way of procrastinating the most important part of the business: generating more of it!

Closing Packs exists to completely eliminate the time agents waste on putting together ridiculous gift baskets or buying the cliche bottle of booze. 3 clicks and you'll have a ready-to-go box of items your clients will actually use, all without a trip to HomeGoods and two hours of playing arts and crafts.

Good news: they feel like our readers are closers so they are offering 10% off your first order! Use code Shake10 on your next closing.

COMMERCIAL CORNER 🏢

"JERSEY IS THE NEW HOLLYWOOD," SAYS NETFLIX (PROBABLY)

Netflix is purchasing a former New Jersey Army base in Monmouth, New Jersey for $55 million, where they will also invest another $850 million to create a mega production facility. Seriously guys, stop sharing your Netflix login, these guys are bleeding out!

Also can’t help but picture the first intern from New Jersey telling the Netflix team that he picked up pork roll sandwiches for everyone and them having no idea what that means (just like 95% of you reading this don’t).

The economic impact here is going to be huge, with over 3,500 jobs during construction, and between 1,400-2,200 jobs annually thereafter, with estimates of over $7.5 billion of output over the next 20 years for construction and production alone.

This entire project does beg the question, however, “Why The Armpit of America?” (don’t shoot me Jersey Shore bros). Well, with all of that 💰 bleeding out from their users sharing passwords, Netflix was happy to accept the major tax breaks this project spits out. This of course is a result of the 2018 New Jersey Film and Digital Media Tax Credit Program, which seems oddly specific.

As Rajiv Dalal explained, "having a large amount of land this close to New York City is also an advantage." On paper, it sounds like a great play.

(Now please just make another series as entertaining as Peaky Blinders, we’re begging you)

And that’s a wrap! We hope you enjoyed this week's edition.

Happy New Year to all of our readers and let's keep shaking and baking into 2023. Still not entertained? Be sure to follow our Twitter for more (@theshakenews).