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August 19, 2016

How a millennial crafted a new kind of realty firm

Broker disrupts his industry with ‘small batch’ service catering to younger crowd

Austin Business Journal

Drew Johnson created Austin Craft Realty with a distinct emphasis on catering to a younger crowd.  Located in a new development that particular appeals to millennials and the even younger Generation Z — The 704 on South Lamar Boulevard — Johnson is leveraging his knowledge of Austin’s urban apartment market to enhance residential sales.

The 28-year-old Fort Worth native got a taste of the real estate business as an intern with a boutique firm in Dallas. He started by leasing retail strip centers, “but I wasn’t the type to be in the old boys’ club,” Johnson said.  Though commercial real estate didn’t resonate with him, he wasn’t completely soured by the industry.  A lifelong affinity for Austin brought him here — and a job with Rock & Roll Realty, which specialized in finding renters the right apartment.  Though that company no longer exists, Johnson recalls the experience with a certain wistfulness.  “Clients were greeted with a psychedelic poster of Bob Marley smoking a joint,” Johnson said. “To me it was the least corporate thing to do.”

Sales Commission

In Austin, many apartment owners are willing to pay real estate agents a commission for bringing them suitable tenants.  Johnson said he became the top agent at Rock & Roll Realty and then landed at Live Weird Realty doing the same thing. He eventually gravitated to Twelve Rivers Realty to learn sales.  With so many apartment choices and so much in-migration of new residents, the apartment leasing niche “is fantastic to be in right now,” he said. Housing sales also are in bonanza mode and he wanted to do both.

Johnson observed that his relationship-building skills with renters could translate into sales commissions as well when they transition to first-time homebuyers.  “We can swoop in and get these young professionals before they have Realtor contacts,” he said.  Incorporating social media skills and advertising on certain websites has proved to be an important aspect of appealing to the 25- to 35-year-old target market. Being tech savvy in general is key.  “Seventy-five percent of our traffic is mobile,” Johnson said.

As this unique business platform came into focus, Johnson realized it was time to open his own shop. He obtained a broker’s license earlier this year and opened Austin Craft Realty in a street-level apartment at The 704, the mixed-use development in South Austin that was built around the Broken Spoke dance hall.

Sweet arrangement

Austin Craft Realty now has eight agents who are independent contractors. By many industry standards, they have a sweet arrangement. Johnson provides them with all the data they need and there are no desk charges. Commission splits are generous to agents, he said.  “I have a mix of people I knew before, but one of my agents was a firefighter,” Johnson said.

The converted apartment with signage and access rights on Lamar also proved to be a fortuitous deal.  Though regular retail leases and rates apply to the conventional storefronts north of the Broken Spoke, the street-level units south of the dance hall are two-bedroom apartments that are available for lower-risk 12-month terms.  Johnson, of course, knew this because of his in-depth knowledge of the apartment market.  “I really couldn’t afford conventional retail space,” Johnson said.  By then, he came up with the Austin Craft name.  “I spent months thinking about names, but the long story short is that I love craft beer,” Johnson said. “You see the craft movement across Austin and it signifies quality, uniqueness, small batch and personalization.”

The Austin Craft Realty offices project a homey feel, and the agents were all sitting at their desks by 10 a.m. on a recent Thursday morning when I dropped by.  Johnson expects to grow to about 12 or 13 agents in the near future.  “We bring quality service to a segment of the real estate industry that’s lacking in that category,” he said.

This article appeared in the Austin Business Journal on August 19, 2016 on page 8. It has been reprinted by the Austin Business Journal  and further reproduction by any other party is strictly prohibited. Copyright ©2016 Austin Business Journal, 504 Lavaca Street, Suite 1008, Austin TX 78701

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