Acquiring More Profit: THE DEFINITIVE GUIDE TO SUCCESSFUL REAL ESTATE BROKERAGE MERGERS & ACQUISITIONS

By George Slusser and Victor Lund

Acquiring More Profit is the long-awaited update to the real estate industry's groundbreaking and bestselling M&A book, Acquiring Profit. Many of the foundational principles outl

• Language: English
• Publisher: WAV Group
• Release date: Jul 11, 2023
• ISBN: 9798988038832

George Slusser

After receiving his MBA from the University of Georgia, Slusser began his successful and distinguished career in the real estate industry. He is a best-selling author, sought-after speaker and consultant, and the industry's preeminent M&A Advisor, having participated in over 1,000 M&A transactions and performed even more valuations. He has led M&A and growth efforts at Merrill Lynch Realty, GMAC Real Estate, NRT, Cendant (now Anywhere), and SVN International. In addition to his pioneering M&A work, George helped build multiple brands through his executive leadership. He has served as EVP of ERA Real Estate, SVP of Business Development for Cendant, COO of SVN International, and President of Coldwell Banker Commercial, leading all to record expansion and revenue growth. George joined WAV Group as a Partner in 2021 to launch and lead the M&A Advisory Services Division. There he utilizes a proven team of industry veterans who provide a wide array of Advisory Services, including: strategic planning, succession planning, valuations, research, and both buy and sell side representation. The division helps clients both large and small with tasks ranging from partnership changes or small mergers to the largest and most complex transactions in the industry.

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ACQUIRING MORE PROFIT

The Definitive Guide To Successful Real Estate Brokerage Mergers & Acquisitions

By

George Slusser

Victor Lund

Copyright © 2023 by George Slusser & Victor Lund

EPub 979-8-9880388-3-2

Library of Congress Control Number 2023905674

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system without written permission of the authors, except where permitted by law.

Published by WAV Group – Arroyo Grande, CA

Printed in the United States of America

Dedications

I would like to dedicate this book to our WAV Group clients. My wife, Marilyn, and I relocated to California after Fisher-Price was sold to Mattel. Marilyn was an executive with Fisher-Price, leading the marketing department, and was elevated to lead the global strategic planning for Mattel globally. After the earn-out was complete, we focused on consulting for venture capital endeavors, and Marilyn became CEO of Surveyor Corporation.

When venture capital collapsed in the late ’90s, we focused all of our energy on consulting. Mike Audet joined WAV Group to lead our real estate division in 2001. Little did we know at the time that real estate could become our exclusive focus.

WAV Group started by creating centers of excellence in strategic planning and vendor selection for MLSs. A major innovation we brought to real estate strategic planning was to focus our preparation through broker and agent satisfaction surveys and interviews. We realized that real estate brokers’ communications with the MLS were largely broken. On call after call after call, brokers told us about their problems with the MLS, most of which were not really problems at all. The brokers were simply in the dark on how to work with their MLS and leverage their services in the best possible way.

It was not long before large enterprise brokerages and franchises engaged us to help them with their technology strategy — expanding our services beyond MLS and into brokerage.

For the longest time, we avoided the M&A segment of services to brokerages. The team at Real Trends was doing a great job, and we did not believe that we had the experience to deliver a comparable quality of service.

In 2021, George Slusser joined WAV Group after his retirement from decades at Realogy. He brought with him the experience of thousands of valuations and more than 700 closed acquisitions. We then added Finley Hair, with his decades of successful M&A and leadership experience in the industry.

Shortly thereafter, our friend and client Mark McLaughlin traded Pacific Union to Compass in one of the largest transactions in brokerage history. Today, WAV Group has the best M&A team in the real estate industry.

Our MLS, brokerage, and real estate technology clients have enriched our lives with friendships that will last a lifetime. I am forever grateful for each and every one of you.

Victor

I echo Victor’s thanks to the real estate industry that has blessed me and our family with so much. I am grateful to the many people at all my stops through the years whom I now call friends.

I am thankful for our wonderful children and grandchildren, who are the joy and inspiration for my life. I am proud of their accomplishments and look forward to them all continuing to blossom and excel as exceptional individuals.

Although I am so very fortunate and thankful for my family and friends, there is only one person with more impact on my life than any other. I dedicate this book, along with my eternal gratitude, to my wife June, who has supported me, guided me, and even pushed me when needed. She is the love of my life, trusted partner, and my best friend.

George

Advance Reviews

A must read: Acquiring More Profit, The Definitive Guide to Successful Real Estate Brokerage Mergers & Acquisitions; by George Slusser and Victor Lund

2023 and 2024 present new and unique opportunities for real estate brokerage owners. Many brokerage leaders will seek to expand their market share through mergers or acquisitions in these changing times. In virtually every real estate marketplace over the past 40-plus years, our industry has seen top brokerage firms significantly expand their organizations utilizing acquisitions as one of their primary growth strategies. This year, and going forward, not only will this trend continue, depending upon the successful deployment of these strategies by regional leaders, it may significantly impact our industry’s landscape.

Acquiring More Profit, The Definitive Guide to Successful Real Estate Brokerage Mergers & Acquisitions by George Slusser and Victor Lund is a must-read for every brokerage executive. I believe there will be many new opportunities for broker/owners to explore and evaluate in terms of expanding their firms, and this book helps breakdown and explain the potential, the challenges and how to make it happen for your business.

For many, many years, I have witnessed George Slusser’s work as one of residential real estate’s most widely respected experts in all areas impacting mergers and acquisitions, as well as Victor Lund’s dedication and achievements in helping to advance our industry. I congratulate George and Victor, and highly recommend reading Acquiring More Profit.

John Featherston, Founder & CEO

RIS Media

"We are proof that the principles, tools, and systems described in this book work. This book is even more comprehensive than the first one which has been our M&A foundation for years. We have grown exponentially through M&A by engaging George and the WAV Group on our last seven acquisitions. They assist us with all phases of the M&A process from valuation to closing. We would not consider doing one without their assistance and now he and Victor are sharing their expertise with everyone.

As I read the newest version of Acquiring More Profit I again realized the importance of understanding the nuances of an acquisition. This book should be a must read for all Broker Owners as at one time or another you will be an acquirer or a seller. Knowing what is happening and why will make the transaction more successful and the entire process less stressful. I learned early on that the right third party doing the financial analysis and presentation of that analysis makes for a successful conclusion. I highly recommend George, the WAV Group, this book, and the Acquiring More Profit Implementation System. Get this book and use its concepts and tools to reach a successful transaction while saving you time, money, and a whole lot of stress."

Larry Rideout, Chairman & Owner

Gibson Sotheby’s International Realty

Finally, a comprehensive, evergreen and incredibly easy to digest blueprint for M&A success in the residential real estate space. I’ve experienced both sides of the process as an executive leader. The best advice I can offer is to conduct extraordinary research, be incredibly prepared and have a watertight implementation plan. This book is a stellar resource that will help you best accomplish those tasks.

Pat Shea, President & CEO

Lyon Real Estate

This book is a must read for any and every broker owner in the business. Each chapter is relevant and insightful. Well done Victor and George! 

Lacey Merrick Conway, President & CEO

Latter & Blum

George is a legend in the real estate valuation, mergers, and acquisitions space.  Anytime we are doing anything big, I always make sure to discuss it with him. Now he, combined with Victor Lund are offering the benefit of their vast experience to everyone. This book and corresponding Implementation System are a complete master class on how to complete a successful M&A transaction.

Anthony Lamacchia, CEO

Lamacchia Companies, Inc.

Acquiring (More) Profit is a comprehensive guide to mergers and acquisitions in the real estate industry, providing valuable insights and tools for successful transactions. The authors’ extensive experience and emphasis on cultural compatibility and a win-win approach make this book a must-read for anyone considering an M&A strategy in the industry.

RJ Long, Managing Partner

Coldwell Banker Prime Properties

This book is a must read for anyone contemplating buying, or even selling a real estate company. Creating a successful M&A strategy from prospecting to closing is introduced complete with explanations, examples, checklists, and forms. George and Victor offer a comprehensive guide that should be in every broker’s resource library. I especially appreciated their take on the importance of cultural compatibility, understanding motivations, and maximizing the value for both sides which are critical concepts often ignored in our industry.

Gino Blefari

CEO | HomeServices of America, Inc.

Chairman Berkshire Hathaway Home Services

A broker’s responsibility is to implement, not create; this system allows the best of both. I have been using the concepts and tools in the original book successfully for over 20 years and have completed multiple acquisitions because of it. My go to resource for all things M&A has always been Acquiring Profit, it has been a major factor fueling our growth. Now with the updated book and this system, the process is easier than ever. In addition to always engaging George and the WAV Group, our company uses multiple tools offered in the book and The Acquiring Profit Implementation System on every M&A transaction.

Paul McGann, President & Owner

Gibson Sotheby’s International Realty

Just the name Acquiring Profit speaks volumes. The writing by George and Victor is the most comprehensive guide to Mergers and Acquisitions I have seen. A buyer or a seller could use this as a daily playbook going through the entire process. Although there is a process to M&A, being in the people business makes it all about the people - as a result every deal is slightly different. This book focuses heavily on the importance of creating a fair and beneficial transaction for both sides, a must I believe for a successful transaction.

Mark A. McLaughlin, President

McLaughlin Ventures

Former CEO, Pacific Union International

Contents

Introduction

Overview

Chapter 1: The Basics

Chapter 2: Getting Started

Chapter 3: Approaching a Candidate

Chapter 4: Relationship-Building

Chapter 5: Information Gathering And Due Diligence

Chapter 6. Valuation And The Offer

Chapter 7: Pre-Closing

Chapter 8: The Closing & Transition

Chapter 9: Making It All Work

Buying Home Services Businesses

Addendum A: Case Study — Move-in Acquisition

Addendum B: Case Study — Fold-In Acquisition

Glossary of Terms

Concluding Thoughts

Acknowledgments

About the Authors

Introduction

Since the first Acquiring Profit book was published, 25+ years have passed. In the age of pod-casts, real estate channels, e-books, and large amounts of information available instantly, I still get requests for the book. I often converse with company owners who still have a copy on their bookshelves and refer to it. For that I am both amazed and thankful.

Acquiring Profit was the first (and, I feel, still best) book dedicated to mergers and acquisitions, or M&A, in the real estate brokerage industry. The foundational concepts of the importance of cultural compatibility and a win-win approach to the transaction have withstood the test of time. Many of the industry players have changed over the years, and the decimal points on purchase prices have definitely moved significantly. However, much of the described M&A process and techniques written about in the original book are valid, and I still use them every day.

M&A activity has also survived the test of time by not slowing during the last few decades but actually accelerating. Growth through M&A has been the springboard for every large company’s success in the industry.

So why write another book?

There has been so much I have learned since the original book’s printing that, when I read it now, I think of all the things it is missing. Since it was published, I have literally worked on hundreds of transactions of all sizes, for almost every major brand, learning more on every one. I have wanted to write an update for many years because I knew about all of the expanded experiences, insights, checklists, and helpful hints that could and should be added.

I have for many years been aware of the tremendous appetite for real estate brokerage firm M&A information in our industry. There is still very little quality information available. If brokers were still referring to a 25-year-old book for assistance, I felt it extremely important to update and expand on the process, with improvements, as it is today. I was asked so often when I was going to update it, and I always put it off to do sometime in the future. Then I met Victor Lund.

I was very fortunate to join Victor and his wonderful wife, Marilyn Wilson, to start the M&A Advisory Division at WAV Group. For those of you who are not familiar, WAV Group is the preeminent real estate strategy and consulting group to the real estate industry. WAV Group has been either behind the scenes or out in front of many of the major industry initiatives, and major company events, of the past two decades.

Both of them encouraged me to update the book, as they had used it themselves in the past and heard regular requests for updates from many of their consulting clients. After much prodding, Victor even agreed to be a co-author. With no other excuses I could assemble, the information-gathering and writing journey began.

We both agreed that there was a good foundation in the original book, but there was so much more that could be included. We decided an update was not exactly what was needed, but instead decided to write a whole new book.

We wanted to share, in a new format, the collective knowledge and experiences of Victor, myself, and the many friends who have contributed. The one thing we did retain was the name … sort of. We were adamant that Acquiring Profit, not just doing an acquisition, was the key concept we wanted readers to glean from the book. We also liked the name, so we landed on Acquiring (More) Profit.

We also had many checklists, forms, and agreements that really do not fit well because of size constraints in a normal book, but they are perfect for digital downloads and manipulation. We decided to create a supplement book with digital files, with forms and checklists that can be customized for individual firm needs. We are calling this the Acquiring Profit Implementation System and, it is a perfect complement to assist with the actual execution of your M&A strategy. It contains many valuable time- and money-saving tools, such as:

Sample prospecting approaches

An NDA

LOI

Contracts

Transition Plans

Plus all the checklists mentioned in this book and more

To order and receive more information on the Acquiring Profit Implementation System at www.wavgroup.com/amp.

Victor’s industry insight, his M&A experiences, and his encouragement have been invaluable to the completion of this book. The acquisition or sale of a brokerage is as much about people and systems as it is about financials. Without Victor, this book would not be as weighted with valuable information — and it may have never been finished.

It is our hope that Acquiring (More) Profit will remain on your bookshelves or live in your computer for another 25 years and still retain its relevance.

George Slusser

Overview

With the purchase of this book, you have expressed an interest to learn more about the exciting world of real estate brokerage firm mergers and acquisitions (M&A). This pathway has been a significant growth strategy for most of the top real estate firms in the U.S. today.

Our vision was to explain the complete M&A process from A to Z so you can understand what others have done and then fairly determine whether it is the right approach for you, too. Ultimately, we hope you learn enough from this book to make the right decision for your company, and our success in meeting our vision will be judged by your actions.

Why consider a merger or an acquisition? M&A can allow your company to quickly add agents, increase market share, revenue, add management talent, and creative cost efficiencies for both your fixed and variable expenses.

Overall, M&A can be a complex and challenging process that requires careful planning and execution to be successful. The title of this book, Acquiring (More) Profit, conveniently sums up our philosophy. We have witnessed many M&A transactions that added revenue, added agents, increased market share, and expanded overall brand awareness — but, unfortunately, did not increase the company’s profits.

We believe that, by far, the best way to grow a real estate company is through acquisitions …. but we want you to do it profitably. This philosophy is grounded in the concepts, stories, checklists, and recommended processes in the pages that follow.

We also believe that both the seller and buyer can greatly benefit from an acquisition; there does not need to be a winner and a loser. We will share the process of building trust between the parties, how best to find out the true motivations and needs of the seller, and the steps to creating a structure that shares the risk while maximizing the potential for both sides.

We also explore the concept that the purchase price and terms are not the most important contributor to a transaction’s success. The most important component to success on both sides is cultural compatibility, which will be a thread through the entire process.

As you read this book, it will be important for you to carefully consider the potential benefits as well as the risks of an M&A strategy. There are several challenges that we will explore in depth to better explain the process of mergers and acquisitions (M&A).

Some of these challenges include:

Prospecting: Who are the potential targets, and how do we determine the best ones? Then, how do we approach them?

Valuation: Determining the fair value of the target company can be difficult, especially if the company has complex assets or liabilities, or if the market is rapidly changing.

Integration: Integrating the operations and cultures of two companies can be complex and time-consuming, and it may require significant resources and management attention.

Communication: M&A can involve a significant amount of change for employees and agents. Effective communication is critical to ensure that they understand the changes and how they will be affected.

Purchase price: Determining the correct purchase price, offer structure, and terms and conditions.

Risk management: M&A involves a certain level of risk, including financial, operational, and even risks to a company’s credibility or reputation. These risks must be carefully managed to ensure that the transaction is successful.

Cultural differences: M&A can involve the integration of two companies with different cultures and ways of doing things, which can be a source of tension and conflict.

These are just a handful of the major areas we will discuss in-depth in the following chapters. We are offering in these pages the benefit of the collective knowledge and experiences that WAV Group executives have earned over decades of being involved in hundreds of M&A deals.

Even though every transaction is different, there are many similarities in the process. These patterns repeat themselves. The process is almost always the same, no matter the size of the firms, the market, or the participants. We hope to share with you the strategies that have been successful in our careers and to help you avoid the many mistakes we have made or witnessed others making.

Acquiring (More) Profit is a mindset that should feed your operational decision-making. When you are running a company, you always need to bear valuation in mind.

Chapter 1: The Basics

Vince Lombardi, the famous football coach of the Green Bay Packers, started every new training camp the same way: On the first day, at the first session, he began by holding up a ball and telling the team, Gentlemen, this is a football. Lombardi wanted all to know that he was committed to preparing his players as thoroughly