Thinking about starting a real estate team? Maybe get out of production? You’re likely overwhelmed with running your entire business—handling admin work, marketing, and every transaction yourself. The good news? With the right systems, you can achieve real estate team profitability while stepping out of day-to-day production.
This guide covers key financial and lifestyle considerations, essential systems, and success metrics to show you how to build a profitable real estate team and get out of production.
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Why Should You Build a Real Estate Team? (Financial ROI)
Increased Transaction Volume Without More Hours
A well-run team lets you close more deals without increasing your workload. The key is designing systems that allow business growth without your direct involvement in every transaction.
Profitability Beyond Personal Production
Mahala Landin, a real estate team leader and business consultant, has not personally sold a home in five years—yet her team closes over 300 transactions and $130M+ in annual sales. Her team’s profitability comes from clear systems, strong lead generation, and structured agent development. This proves that stepping out of production doesn’t mean sacrificing income.
Building a Business Asset
Real estate is one of the few industries where you can build a sellable, scalable business. With the right compensation and lead generation model, your team can continue producing revenue without your daily involvement.
The Lifestyle ROI: Why Getting Out of Production Matters
Freedom from Client Demands
Running a team shifts you from being an agent to a business owner. Instead of responding to clients 24/7, you oversee a system that generates business with or without you.
Predictable Work Schedule
Solo agents face income and workload fluctuations. A team allows for steady lead flow, structured schedules, and predictable income.
Professional Fulfillment Through Developing Others
Mahala Landin discovered her passion for mentoring agents and helping them succeed. Many team leaders find developing their agents just as rewarding as closing deals.
What Systems Do You Need to Start a Profitable Real Estate Team?
Every real estate team needs systems to keep everything running smoothly. Different team sizes have different system requirements, but to get started, every team should have a Lead Gen system, a Compensation Structure, and a Recruitment & Development System.
Lead Generation & Management
A strong real estate team thrives on consistent and strategic lead management. Without it, agents struggle to convert prospects into transactions. The A/B/C Follow-Up System is a proven framework that helps team leaders and agents categorize and nurture leads based on readiness to transact.
The A/B/C Follow-Up System: How It Works
This system ensures that every lead is followed up with the right frequency and urgency based on where they are in their decision-making process.
A-Leads (Hot Leads)
These leads are Buyers or sellers who are ready to make a move immediately or within the next 30 days. For example, Expireds and FSBOs are perfect examples of A leads because they are actively looking for solutions now. A leads should get Daily follow-ups until an appointment is set.
- Communication Methods:
- Phone calls (priority)
- Text messages (for reminders)
- Emails (to confirm appointments)
- Objective: Secure a listing or buyer consultation appointment ASAP.
B-Leads (Warm Leads)
These leads are interested in buying or selling but plan to move forward within the next 3-6 months. For example, leads you might have gathered through past daily follow-ups, your sphere of influence, or nurtured online leads. B-Leads need regular touchpoints but they are not urgent. B-Leads should get a follow-up twice a month until they are ready to move within 30 days.
- Communication Methods:
- Market updates via email
- Check-in calls every other week
- Texts to gauge readiness
- Objective: Maintain rapport and keep them engaged until they’re ready to take action.
C-Leads (Long-Term Leads)
C-Leads intend to buy or sell, but their timeline is 6+ months out or uncertain. For example, Pre-Foreclosures and FRBOs (For Rent by Owners) will likely need a longer runway before making a decision. C-Leads should get a follow-up once a month.
- Communication Methods:
- Monthly email newsletter (market insights, home tips)
- Periodic check-in calls to maintain the relationship
- Objective: Stay top-of-mind so that when they’re ready, they choose your team.
With REDX Teams, you get access to all the leads your team needs. With daily hot leads delivered to your team to prospect, a social media ad system to prospect warm leads passively, and direct access to long-term nurture leads like Pre-Foreclosures and FRBOs, it’s the best way to guarantee your team has consistent and long-term growth.
Compensation Structure – Ensuring Profitability While Scaling
A well-designed compensation structure is essential to building a profitable real estate team. Without it, team leaders can quickly become overwhelmed with overhead costs while struggling to maintain profitability.
Key Elements of a Sustainable Compensation Model
- Industry Standard Splits:
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- 50/50 for buyer agents (team provides leads, training, and admin support).
- 30/70 for listing agents (listings generate more revenue and require less lead support).
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- Profitability Target: Maintain at least 50% gross profit after agent commissions.
- Incentives That Drive Performance:
- Bonus structures based on production benchmarks.
- Higher commission tiers for agents generating their own leads.
- Retention bonuses to reduce turnover.
Why This Matters for New Team Leaders
- Avoiding Financial Pitfalls: Many agents start teams but fail to build a profit-first model, leading to burnout or loss of income.
- Creating Scalability: A structured split allows for steady growth without reducing the team leader’s earnings.
- Motivating Agents: A compensation model that rewards both effort and loyalty keeps high performers engaged while minimizing turnover.
Recruitment & Development
Hiring and developing the right agents is the key to long-term success. A strong team isn’t just about bringing people in—it’s about setting them up to thrive.
Steps to Build a Winning Team
- Set Expectations Before Hiring: Clearly outline responsibilities, lead flow expectations, and performance standards.
- Structured Training Plan: Implement a 30-day onboarding system that includes lead conversion training, role-playing, and mentorship.
- Ongoing Development:
- Weekly coaching sessions to improve sales skills.
- Performance tracking to ensure consistent growth.
- Team accountability meetings to reinforce discipline.
- Performance Benchmarks:
- Agents should close at least 24 transactions per year.
- Regular skill assessments to keep agents on track.
Common Mistakes to Avoid When Building a Real Estate Team
1. Failing to Provide Agents with a Consistent Lead Flow
One of the biggest mistakes team leaders make is assuming agents will generate all of their own business. While independence is important, team members should have consistent access to high-quality leads to ensure productivity.
With REDX Teams, agents get full access to Expireds, FSBOs, FRBOs, Pre-Foreclosures, and GeoLeads daily, eliminating lead scarcity and ensuring every team member can generate their own business right front the beginning.
Many new team leaders promise to provide all leads, thinking it will attract top agents. In reality, this creates a team of agents who are dependent rather than proactive. A healthy team should balance team-provided leads with agent-generated business to ensure sustainability.
2. Losing Touch with the Sales Process
Once leaders step out of production, it’s tempting to detach from sales altogether. However, top-performing teams maintain leadership involvement by participating in sales training, tracking conversion metrics, and providing regular coaching to agents.
3. Skipping Systems and Standard Operating Procedures (SOPs)
Scaling a team without documented processes leads to inconsistency and inefficiency. Every aspect of the business—lead generation, client handling, transaction coordination—should have repeatable systems to ensure smooth operations.
4. Hiring Agents Without Clear Expectations
Many team leaders rush to hire agents without outlining performance expectations, training timelines, and accountability measures. Every hire should meet clear benchmarks (e.g., closing 24+ transactions per year) to ensure they contribute to team success.
5. Focusing Only on Revenue Instead of Profitability
Growing transaction volume means little if the business isn’t profitable. Some team leaders overpay agents or spend too much on lead generation, cutting into margins. The focus should be on scalable profitability, not just revenue.
How to Measure Your Team’s Success & Scale Your Business
Success isn’t just about transaction volume—it’s about building a sustainable and profitable real estate team. To track success effectively, you need to measure both individual agent performance and overall team success.
Measuring Individual Agent Success with REDX Teams
To run a high-performing team, you need to track how well your agents are prospecting, converting leads, and closing deals. REDX Teams provides built-in tracking tools that help team leaders measure and manage individual agent performance.
Key Metrics to Track:
- Dials Per Day: How many outbound calls an agent is making.
- Contact Rate: The percentage of dials that result in live conversations.
- Appointment Setting Rate: How often an agent converts a conversation into a scheduled appointment.
- Conversion Rate: How many appointments turn into closed transactions.
- Consistency in Prospecting: Tracking daily and weekly outreach consistency using REDX’s call analytics.
By using REDX Teams, team leaders can monitor activity levels, identify top performers, and coach agents who need improvement.
Measuring Overall Team Success
Beyond individual agent success, team leaders must track the overall business’s profitability and efficiency. While REDX is excellent for lead tracking, a business analytics tool like CTE (Commitment to Excellence) or Sisu can provide deeper financial and operational insights.
Key Business-Level KPIs:
- Gross Profit Margin: Ensure at least 50% of revenue remains after agent commissions.
- Lead ROI: Track how much revenue each lead source generates compared to costs.
- Cost Per Acquisition: Monitor expenses for acquiring clients and maintaining profitability.
- Transaction Pipeline: Evaluate how many deals are in progress versus how many have closed.
- Retention Rate: Track how long agents stay on the team—high turnover is a red flag.
- Revenue Per Agent: Ensure each team member contributes meaningfully to overall business success.
By integrating REDX Teams for lead management and CTE or Sisu for financial tracking, team leaders can create a data-driven strategy for growth and sustainability.
How REDX Supports Your Team Growth
REDX provides tools to help real estate teams grow efficiently:
- Lead Generation: High-quality data for Expireds, FSBOs, and GeoLeads.
- Agent Prospecting Training: REDX University and Bootcamp are included for free with REDX Teams subscription.
- Efficient Lead Distribution: Smart systems to assign and track leads across your team.
Take the Next Step
If you’re serious about growing your real estate team, book a REDX demo today to see how our tools streamline lead generation and team management. Click here to schedule a demo.
Final Thoughts
Building a real estate team allows you to scale your business, increase profitability, and create freedom. By implementing structured systems, focusing on agent development, and leveraging tools like REDX, you can build a business that thrives—with or without you in production.
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