Dwight Milko’s grandfather once told him, “There are two areas to make money in America: insurance and real estate.” After spending years working for insurance companies in corporate America, Milko decided to give real estate a try.
He’s now the owner of six ReMax franchise locations in the eastern suburbs of the Cleveland, Ohio area and is celebrating his 10th anniversary in business this year. “My last corporate paycheck was in September 1999. The rest of it after that is just my own work,” said Milko.
Choosing a Franchise
Milko invested in ReMax initially as a part-time venture. Once he realized how much time it would actually take to run a successful agency, he decided to concentrate on real estate full time in 2004.
Choosing a known brand like ReMax was an important part of the decision. “You can take a card into any household and they’ll know the balloon. They’ll know the professionalism behind the brand. I’m all about branding, not only branding ReMax but branding my company ReMax Traditions,” said Milko.
Milko has been successful with a combination of buying two existing franchises and building four from the ground up. If starting a new franchise, Milko suggests looking closely at the territory you want to be in and the number of units that are there, as well as the number of agents in the marketplace that you can recruit from. “In the case of the buyouts, the owners were ready to sell. They were ready for someone else to take their business to the next level and bring the resources that size will get you as you expand and get bigger,” said Milko.
The 8 Mile Method
Milko chose the locations for each of his six locations based on military tactics. He drew an 8-mile circle around each location to determine where he should next expand. “You don’t want to get too far away from your base. That’s where you know the market, have access to resources like the chamber of commerce and other realtors,” said Milko. He says this 8-mile strategy is more advantageous than seeking out an opportunity 50 miles away and getting too far away from your base and knowledge of the community. “It’s a balance in franchise ownership between the potential for success and distance,” said Milko.
The Market Crash
Milko was on his honeymoon in September 2007 when he first realized that things weren’t normal in the marketplace. His goal for his two franchises at the time was to sell 40 homes. They sold 28. Milko thought it was just a blip until it happened again the next month. “2008 got worse and 2009 got even worse. It did affect my new marriage. There were times where we lived off my wife’s salary as a schoolteacher. But we do what we always do as entrepreneurs and company owners: we get people through it. We get ourselves through it and in real estate, we get our agents through it. Some people in our office couldn’t afford to pay their own mortgages. Did we help people? Yes. Was it tough? Absolutely,” Milko exclaims.
But Milko looked at the market crash as an unusual opportunity for expansion, which he credits to helping his business survive. A lot of good realtors had to leave the business during this time, which Milko says was a hit to his business. But at the beginning of 2013, the “light switch went on” and things began to turn around.
The housing crash made getting financing impossible for Milko, so he had to do “a no-no by every financial advisor out there” and cash out his 401K to get capital for his business. That motivated him to set goals to break even as soon as possible. “My goal was to break even within a year so that I could replenish that cash outflow that I had to lay out personally. I set expectations for myself and tried to reach them so I can have some breathing room,” said Milko.
The Buying Process
Milko advises anyone considering buying a real estate agency to look at the books closely. You have to really drill down to see if that company is actually making money. Realize that your assets are your realtors and that a franchise is only as good as its owner. “We are the leaders of the company; we are the driving force. What grows my franchise is recruiting good agents. You need drive, ethical standing in the marketplace and creativity,” said Milko. “Right now, the average realtor is around 60 years old. They’ll be retiring in the next 10 years or so, but where will the next crop come from? A business owner needs to understand how to attract millennials to their business.”
On Being an Entrepreneur
One of the reasons Milko decided to leave the corporate world was the dream of answering to no one but himself. “Being self-employed is quite spectacular if it’s right for you. It’s definitely right for me. I thrive on the opportunity to make it my own work and expand my knowledge in the industry constantly, which helps improve my business. Giving back to the community and my clients has also helped bring me success,” said Milko.
Milko notes embracing change is necessary for any entrepreneur. One of his favorite quotes is: “If you don’t like change, you’ll like being irrelevant even less.” A successful real estate agency owner needs to push change to make it vibrant, different while staying on top of technology and the latest industry trends.
Milko says real estate is a good living, and he revels in leading a buyer to the right property. “The greatest accomplishment on Earth is actually owning a piece of it,” says Milko. He still lists and sells property, but Milko gauges his success on how his realtors are doing. He spends a lot of time and money on training and coaching so they have opportunities to grow, whilst keeping his retention rate high. He personally checks in with each agent regularly. “Having my realtors do more business and make more money for themselves is my personal fulfillment and satisfaction,” said Milko.
In an area where the average price of a home is just $200,000, Milko says it’s essential to set high goals for himself and his staff. His 2014 goal is to do $400 million in business. He plans to use the next five years to reach $1 billion in sales through 8 franchises and 300 realtors doing about 7000 transactions. His goal is to become the leading broker in Northeast Ohio while focusing on the east side of Cleveland.