Magnetic Residential

The gap

A newer agent in Sacramento had two ways to build a career. A traditional brokerage offered a reasonable split and very little support. A team offered support, but the team lived inside someone else’s brokerage, so the agent paid twice. The brokerage took half until the agent hit a production threshold, and the team took another 10 to 20 percent on top for leads and accountability. An agent could end up keeping as little as 30 percent of their own commission.

Then, the moment they got good, they left. A team trained agents for someone else’s brokerage.

I’d seen it from both sides, first as an agent and then while building my own team under other brokerages. The economics didn’t work for the agent, and they didn’t work for the person training them.

The model

It started in December 2016 as a team called Taylor Real Estate Group, running under other brokerages. I co-founded it with a partner who worked with us as a buyer’s agent, and I ran it as CEO and made the operating decisions.

In 2021 it became Magnetic Residential, a brokerage in its own right. I don’t hold a broker’s license, so I brought on a broker partner and paid to operate under theirs. I owned the company and made the decisions, while the license and the legal responsibility that comes with it sat with my broker partner.

That change is what made the model possible. Only when the team and the brokerage were the same company could I remove the second split. The design was one company with two sides and a path between them, the model people were starting to call a teamerage. A few brokerages were experimenting with the idea. The version Magnetic ran on was mine.

	Who	What they got
Team agent	Agents closing 3 to 10 deals a year	Accountability, training, and opportunities from my own book of business and listings
Brokerage agent	Agents closing 10+ deals a year on their own, or $10M in volume	Independence inside the same company, with the team still around them

Team agents kept 10 to 20 percent more of their commission than they would on a typical team. Nobody got the brokerage side by asking for it. You earned it, and once you had, you could choose which side you wanted.

We stayed small: five agents on the team side and one brokerage agent, who joined directly and still came to team huddles to help the newer agents. Nobody moved from the team side to the brokerage side while we were open, so the path upward was built but never tested. What the model did deliver, reliably, was predictable revenue.

What actually held it together

The early advice I got on recruiting was simple: hire anyone who’s interested and get agents in the door. I did.

One hire didn’t fit. They missed morning huddles, pushed back on every decision, and brought a heaviness into the room that the rest of the team started to feel. We were small, I didn’t want to lose anyone, and I kept them far longer than I should have. By the end, people were dreading the huddles and the team outings that were supposed to be the best part of the job. When they left, the team felt the difference immediately.

That’s when I understood what was really keeping people at Magnetic. The split math brought agents in. The culture kept them. Our purpose was written down from the start:

Help real estate agents attract an abundant life by giving them the education and tools to be the best, and to bring value to their clients and communities.

So I rebuilt hiring around it. I looked for specific signals in interviews, and every candidate joined a morning huddle before getting an offer, so the team met them before I committed. My rule became: I can train skill, but I can’t train personality. Hire slow, fire fast.

The next hires fit. Huddles became the place where agents traded what was working and helped each other close.

The numbers

Revenue is the number I tracked closely, so it’s the one I’ll stand behind.

• From zero to about $500K in gross commission income across all agents at our 2022 peak, with some years doubling the one before.
• About half of it came from my own deals. I was the rainmaker, closing volume on par with the rest of the team combined.
• Every new lead source had to earn its place. Break even by month three and return 2x by month six, or I cut it. That rule, plus the strategic partnerships I formed, kept the pipeline full without paying for leads that didn’t convert.

The bet

When interest rates rose in 2022, transactions dropped almost overnight. The consensus across the industry was that it was temporary: six months, and the market would return to normal.

A mentor who had built a successful team in another state gave me advice that made sense: this is when you take market share. While everyone else cuts marketing, you double down, and when the market comes back you’re positioned ahead of all of them.

I took it. And to do it, I suspended my own rule. Spending no longer had to break even by month three, because the goal was market share, not return.

The market didn’t come back in six months. Four years later, it still hasn’t. We didn’t have the reserves for a long downturn, and by the time I pulled spending back, we couldn’t catch up. In 2023 we finished just short of profitable. In 2024 we drained our reserves.

The strategy itself wasn’t the mistake. Taking share in a downturn is real, and plenty of companies have come out of hard markets stronger because they did it. The mistake was that I turned off my guardrail without putting anything in its place. There was no date, no revenue floor, and no reserve level at which I’d admit the recovery wasn’t coming. The rule I had built to protect the company was exactly the tool that moment called for, and I set it aside when it mattered most.

Closing it

In December 2024, my co-founder and I closed Magnetic Residential.

Our agents moved to other brokerages, and every open deal went with its agent, so no client lost a transaction. The hardest part was letting go of our staff member. It was the first time I had to let go of a W-2 employee, and it was as disappointing and stressful as it sounds.

Closing Magnetic is also what opened the door to luxury real estate, where I work today with Nick Sadek Sotheby’s International Realty.

What I’m carrying forward

Decide in advance what would prove the advice wrong. Twice I acted on outside advice that was reasonable in general and wrong for my situation: hire everyone, then double down. Neither came with a condition for stopping. Today I set the exit condition before the bet starts. When I scoped the EmpowerME build, every flow had a written pass condition before testing, and anything that failed was fixed or cut.

If you suspend a guardrail, replace it with a smaller one. A spending cap, a check-in date, a reserve floor. The exception still needs a boundary.

Reserves are part of the strategy. A market-share bet is only as strong as the runway behind it.

For a small team, culture is the product. Structure and economics bring people in. How it feels to show up every morning is what keeps them.