Jonathan Rundlett, regional owner of EXIT Mid-Atlantic Realty, relates to the tens of thousands of US employees recently getting the proverbial pink slip. After graduating with a degree in hotel management, he worked his way through such establishments as the Waldorf-Astoria, the Four Seasons Hotel in New York, and the Watergate Hotel before becoming the manager for two swanky Georgetown hotels.
Several years later, Rundlett cut his teeth in the mortgage side of real estate, but after becoming branch manager for a community bank in Owings Mills, Maryland, the financial meltdown of 2007-9 led his branch to close its doors.
“This was the second time events beyond my control took a job from me,” Rundlett recalls. “After that, I shifted my way of thinking — I would no longer put all my eggs in one basket. I needed multiple streams of income to ensure that nothing like this would happen again.”
Diversified income streams lead to financial independence
Rundlett was forced to shut down his bank’s branch, but he maintained his mortgage origination license and began work as a loan officer, freeing himself from the responsibilities of managing employees, marketing, and payroll. Meanwhile, he obtained his real estate license and embarked on an additional stream of income by fixing and flipping rehab properties. With income flowing in from two different directions, he finally had the peace of mind that his entire earnings couldn’t be cut off again.
“I partnered with an independent brokerage affiliated with a Real Estate Investor Association (REIA),” Rundlett remembers. “The focus of this brokerage was to instruct agents to invest in real estate and enjoy an additional stream of income. To help others avoid the fate I’d experienced twice over, I became a team leader. For these efforts, the REIA awarded me the 2014 Investor of the Year award.”
Rundlett brings his philosophy to EXIT Realty
In 2016, Rundlett decided to launch a real estate brokerage. After researching how EXIT Realty incorporated a residual component directly into its compensation structure, he knew that was the company he wanted to join.
Rundlett purchased a franchise from EXIT and opened his first office in Maryland, scaling the brokerage to two offices and over 100 agents in just two short years. In 2019, the regional owner at the time asked Rundlett if he might be interested in purchasing the entire Mid-Atlantic region.
How EXIT Realty sets itself apart
“One of the first things I noticed about EXIT was that this company focused on individuals,” Rundlett says. “Other companies are driven by numbers, but EXIT Realty is empathy-based and built on human potential.”
While Rundlett appreciates many aspects of working with EXIT, he is most proud of the company’s commitment to its employees. Even during the worst economic downturns, EXIT Realty Corp. International has never laid off even a single employee.
“When interviewing for positions, EXIT’s corporate office makes it clear that they are looking for lifelong employees,” Rundlett explains. “The average time our corporate executives have been with the company is over 16 years. Together, EXIT’s corporate leaders share a combined real estate experience of over 500 years. Where other real-estate companies are led by ‘tech guys’ or ‘hedge fund managers,’ EXIT’s leaders are lifelong real-estate professionals.”
What an empathy-based real-estate company looks like in practice
As Rundlett explains, EXIT Realty’s supportive, family-like culture promotes a habit of sharing that is uncommon in the industry. “In this sector, successful people tend to keep their secrets close to the vest,” he says. “They are afraid that sharing will cause them to lose business. Within EXIT, however, everyone is willing to teach people how to be successful. It’s incredibly refreshing.”
Being a privately-owned company, EXIT is free to adapt swiftly to changing environments and do what is best for employees. Publicly-owned companies, on the other hand, are bound by the numbers as they answer to investors and shareholders.
“EXIT Realty is one of the leanest real estate franchise models available,” Rundlett remarks. “Franchisees have unprecedented opportunities to prosper. For starters, EXIT does not require royalties or percentages taken off the top. Whereas most companies require at least a 25% referral, EXIT’s corporate office forwards lead to franchises and agents with no required referral fee.”
In addition, EXIT Realty’s residual component allows associates to gain an additional stream of income. This revenue stream flows in while employees work for the company, after they retire, and is paid to beneficiaries if the associate passes away.
“Other companies have tried to copy our residual component, but they make it far more difficult,” Rundlett notes. “Some tie earnings to whether or not the brokerage is profitable that month, while others offer the residual option as a stock option, and this takes time to fully vest. Employees never know what they will receive when they exercise their options. In addition, many companies turn their residual component into a multi-level marketing scheme designed to pay people at the top more.”
By contrast, EXIT’s single-level residual is simple to calculate so its employees always know how much they will receive — and when they will receive it. When employees bring someone into the company, corporate pays those original employees a bonus equivalent to 10% of their gross commission, up to $10,000 per year, deposited into the bank days after deals close. When employees retire, they continue to receive bonuses equivalent to 7% of their gross commissions, up to $7,000 per year. And as a legacy, beneficiaries receive a bonus equivalent to 5% of their gross commissions, up to $5,000 per year.
“You can continue to introduce people into the company even after you retire,” Rundlett concludes. “To date, EXIT Realty has paid out over $500 million in single-level residuals. I am proud to be part of a company that cares about changing people’s lives.”
