Being in real estate really pushes you between that thin line of selling a property and then becoming unemployed. Once you’re done selling, the cycle ultimately begins again. Emerson Willis, CEO of Yep Insurance, learned at a young age from his father the importance of having residual income as early as possible. He shares his journey from watching his father to building his own insurance agency that has been growing rapidly today. Particularly, he talks about the state of flood insurance in the country and what unique thing he can offer. Emerson also gives great pieces of advice about starting up a business – from building up a website and sending traffic to building partnerships.

Residual Income And Flood Insurance with Emerson Willis

Our guest is a successful business owner who tells the story of his father’s desire to stress the importance of residual income since he’s been a little boy. As he watched his dad invest in real estate, all those growing up years, the message was clear. Build something with residual income and start as early as possible. He has an insurance agency with a national presence, which is growing rapidly and he’s here to tell us all about it. Welcome, Emerson Willis, to the show.

Thank you, Mitch. I appreciate you having me on the show. I’m honored and I’m looking forward to diving in with you.

We have an association, a common friend. Emerson and I know a lot about each other, but this is the first time we’re speaking. This is going to be a great conversation. Why don’t you tell us a little bit about where you started or how this started? Talk a little bit if you can about your dad and tell us how he inspired you.

At a young age, I had parents that were around. They didn’t have the typical 9:00 to 5:00 jobs. I didn’t know what that looked like. My mom was a flight attendant and my dad was in real estate. They were around quite often. I knew my dad spent a lot of time with clients, but he seemed to be able to make it to all the sports events and all that. I liked that my parents were around. Whatever they did I thought was great. As I grew older, I noticed specifically my dad, he’s more the entrepreneurial type like myself, I definitely followed in his footsteps. He sold a lot of real estates in my younger years. I was fascinated by everything he did.

We were able to do nice things like traveling the world and going to all kinds of great places. As I grew up, I looked up to him and was paying a lot of attention to what he was doing. As I got a little bit older, he says, “If I could start over, I would have picked and built on a career that would be a residual base income.” As a real estate agent, you can make a lot of money selling a property but the moment you sell it, you’re unemployed again. It’s like an ebb and flow thing. He’s been through pretty much, all the turns of the markets and real estate. It’s been good and it’s been bad. At that point, it made sense to me that you could build a residual income and why that’s a benefit as opposed to trading your time for money.

Here you were, you’re watching your dad do these real estate deals and in a sense, that’s not a residual income but he’s in business for himself. When was the first time you created a residual income stream for yourself?

My dad and a business partner of his, when he came to this conclusion, they bought an insurance agency out of Boulder. Some time passed by, they built on it and the partner wanted to sell out. My wife and I had our insurance licenses at the time just to do it on the side. We had no intentions of digging in quite yet, but I got a phone call from my dad’s partner and he said, “Would you like to buy the insurance agency from us?” I was surprised. I didn’t know how to think of it. My wife and I hadn’t bought a home or anything yet. We found some private investment money to be able to make the purchase and we did buy it. Instead of buying a house, we bought a business. That office was an established insurance agency. It had been in business for about 25 years, so very loyal clientele base. We walked into a substantial residual income insurance practice.

That’s pretty interesting because he’s your dad’s friend and he knew him that way. To trust somebody when you don’t have any knowledge of how to evaluate an insurance agency, that must have felt like a very big risk.

As a real estate agent, you can make a lot of money selling a property; but the moment you sell it, you're unemployed again. Click To Tweet

I saw what they went through and I had my license since I was about eighteen. This happened in 2008. I’d had my license for a while, but it was a little bit of a leap. We had to take a leap of faith, but we were very excited. The business partner stuck around for about six months to work with us, to make sure we understood the ins and the outs. Right off the bat, it almost takes a good year before you see all of the possible things that could come through. You couldn’t possibly learn it in a month. We dove right in and went at it.

Let’s talk about your first thousand clients. I don’t mean the business’ thousand clients or thousands of clients, but yours. What did you do differently that they were not doing?

When we bought the agency, it was a very old school setup. They didn’t even have a website. They didn’t have an email address. When customers would call in, it might be days before they return a phone call, which you would wonder why people would even stick around but they did. That’s the first thing we did. We said, “We’ve got to get a website. We’ve got to get an email address.” We got the company modernized. They weren’t doing any marketing. Immediately the first thing we did was let’s say we have 500 accounts that are auto insurance. Those are people that we could sell home insurance to, so the first thing we did is cross-sell what we did have. Take advantage of your existing clientele.

That’s not something that the agency was doing before? That was like a new concept or something? I don’t understand.

The agency was so old. Here’s the thing about the agency. This is a nonstandard agency. This is in Boulder, Colorado. They were known as a nonstandard auto insurance policy. People who had difficulty buying auto insurance, this was the place to go. Word of mouth was a big part of the growth of that agency. We had a lot of people coming in who had foreign driver’s licenses or DUIs, things like that. Very difficult to place insurance. They weren’t going after new business though.

FTC 128 | Residual Income
Residual Income: To trust somebody when you don’t have any knowledge of how to evaluate an insurance agency feels like a very big risk.


That’s something that is very common here in Massachusetts as well. You’ll see agencies advertise to try and reach those people who can’t get an insurance policy because of either DUIs or whatever their history is. You decided to cater to those. Not you, but the agency was catering to those people.

It made business easy and that’s why the temptation was there not to do anything differently because they had this revolving door of being known for that in the town. The word of mouth kept them going. There is something with some of the nonstandard auto insurance. It can be high maintenance. You have a lot of people who don’t pay their bill or they get canceled, they got to come back in. That was what my wife and I learned is that we were doing a lot of work, but maybe not being super-efficient versus building a preferred business where you might go after more commercial insurance or more preferred accounts.

You didn’t even have a website or an email address now had the job of taking this company into the nineteenth and twentieth centuries here. How did you learn about that? Where did you start when it came to finding out what software to use for the type of business that you acquired? There are so many moving parts here. It’s almost hard to figure out where to dig in with you. Where did you even start?

Half of our advertising works. The problem is we don't know which half. Click To Tweet

A lot of business owners out there who are just getting started or maybe you’ve been in business for a while can appreciate this. I’m not a website designer. I went out and what do we all do? You go scouring the internet looking for some solution. If you’re in a niche like insurance or real estate or whatever it may be, a lot of times you’ll have these website companies that have plated systems that are geared towards your industry. They’re like a turnkey program. Being new to it, we had decided to go with a company that had a turnkey insurance website setup. They had a bunch of technology that was applicable to what we needed. We went into that and we got set up. The one thing that is something I could say I learned from that is a lot of these website companies out there, they just build this cookie cutter thing but it’s not designed necessarily to drive conversions. It’s more of something where they market to you, but they’re not necessarily doing a great job at marketing to your clients. Our website looked much nicer, but it wasn’t up to par with what my expectations are now.

You’ve got to start somewhere and being that you didn’t even have a website, you at least got that start. It’s interesting because we were chatting about the different things that you do. You seem to have gone quite a bit past the whole insurance thing. I know you specialized in flood insurance in particular?

Yes. We discovered that and that is where everything took a very strong turn. The business partner that we bought that agency from, he went on to buy a flood insurance agency. He stayed in touch with us and he got in touch with us again and told us about what he was doing, and we discovered this flood insurance niche. As soon as we wrapped our heads around it and realized how much of an opportunity there was in America for this, we decided immediately that we needed to sell our agency and focus 100% on this flood insurance niche.

You’re talking about selling the agency that you and your wife had purchased?

At that point, we fast forward quite a bit. We were there for about six years. We stayed around, we built it up and our business grew. We cut our teeth on that but at this point, we were getting tired of the one hour drive up to Boulder from Littleton, Colorado and we were very excited about this flood insurance niche. We learned that most everything could be done via online, through phone and email versus foot traffic, which was very attractive.

FTC 128 | Residual Income
Residual Income: You’ve got to know what’s happening so you can improve.


That’s what you decided to do. You decided to move from what was a slow and steady business, an hour from your house and instead pivot directly into an online business.

It was one of those things where it was a good business, but the maintenance was so high that it was difficult to spend a lot of time growing it. Then when we found out the opportunity at the flood insurance and we decided to dive into that, that’s when we kicked off a company called Quick Flood Quote. That’s about when I ran into Konstantinos, our mutual friend there. He made a big difference in where our direction went with how we marketed it online and he did a lot of work for us on animated videos. From there on out, I started learning things. I’ll never forget when he looked over our website with us and did a review. He asked me what our conversion rates were. I said, “I don’t know what my conversion rates are.” I just knew that I had people calling me, which a lot of business owners don’t realize how important those metrics are. You’ve got to know what’s happening, what your conversion rates are so you can improve.

As David Ogilvy once said that half of our advertising works. The problem is we don’t know which half. Here you are sending traffic to a website, but you don’t even know whether it’s converting. Konstantinos woke you up to that fact and you started paying attention. What happened next?

The first thing we did is we got that animated video, which I know made a big difference and increased conversion rates. He rebuilt the website and our conversion rates went from anywhere between 1% and 2% and shot up to 15% to 20%. It would range from about 15% to 20% after just that one change alone.

Insurance isn't very exciting until it starts saving you money in your pocket. Click To Tweet

The evolution here came from the fact that A, you didn’t have a website, then you had one. B, it didn’t work very well and then you fixed it and improved it. I know you switched focus for a bit in between. What’s interesting is you have the entrepreneurial characteristic of never truly being happy with what you have and moving to what looks like the next big thing for you. That’s how you moved into flood insurance, is that right?

Absolutely. The other thing we learned about the flood insurance opportunity is we do like to help people. Most people who were in a flood zone that have to carry flood insurance, if they’re working with an agent, they’re being led by the blind. You wouldn’t believe the amount of money I’ve seen people paying for a single flood insurance policy when they have options that are much less expensive. We’ve seen people almost losing their home because their flood insurance rates were so high, yet there were options available. That’s part of why we became passionate about the flood. Not only could we help people, but it always felt good to save people a lot of money when you’re talking about thousands of dollars of savings per year.

Insurance isn’t very exciting until it starts saving you money in your pocket, then it becomes exciting. You’ve got the whole flood insurance thing nailed and that’s working well, but now you started to create more residual income. I want you to tell us how you’re doing it.

That’s the beautiful thing about insurance or anything where you have a recurring payment from your client. This is the thing my dad said, “Residual income, that’s where it’s at. If you can learn how to make money while you sleep, there’s a possibility you won’t have to work for the rest of your life.” I liked that. With our business here, most of our clients were being misled by the market space. Our retention levels are somewhere in a 96% rate. Every single year we’d get a flood insurance client and they have to have the flood insurance. A lot of them didn’t want to have it. In some cases, we could help them with that. The nice thing about this when it comes to residual income is when we build up a book of business, a group of clients we’ve acquired through marketing or the referral network. Let’s say you made $100,000 this year from commissions on those premiums. Next year you’re going into the year with a 96% retention rate. You’re going to make about $96,000 before you do any work.

The thing is because those policies renew every single year and you get paid again and again. That’s why a lot of people don’t like insurance. They feel like they’re being taxed, or they don’t want to have it. That’s one of the nice things about our clients is they’re happy to find us. Most of them are paying quadruple of what we charge. They’re happy to save. There’s something to be said about being able to work and build up a book of business and then be able to have a little more freedom. If you stop working, you don’t necessarily stop getting paid. That’s why you’ll see a lot of insurance people playing golf or traveling. That’s something I love to do is spend time with the family.

FTC 128 | Residual Income
Residual Income: The strongest and most important element of what a great entrepreneur does is always looking for opportunities.


The nice thing about any of this residual income-type of situations is that you’re a young guy and you have lots and lots of interests. You could still be making money while pursuing the next big thing. You could have shiny object syndrome and have it work for you. What a nice change that would be.

That’s the way my mind works. My mind never stops. If you could sit down with my wife and talk to her, she’d say I’ve probably got ten new ideas every day. What’s exciting about this too is we figured out the flood insurance market. It was our niche. We learned that there were numerous carriers, like ten different insurance companies. I decided and said, “This process doesn’t work very well.” I talked to a software buddy of mine and I said, “Could you help me automate this quoting process?” That’s a lot of what we go through to deliver our flood insurance and he goes, “Yes, we can do that.” Instead of spending a couple hours producing a quote, we’ve got it down to about a minute. Coming back to the residual income piece, we decided, “There are a lot of people out there that needed to find out about this flood insurance. How about we start helping other insurance agencies out and other brokers learn about it? Not only that, they can access our flood rating technology for a small fee.” The nice thing about it is back to the residual income piece is when you start doing the math, even a small recurring fee of let’s say $50,000 a month, you multiply that by a couple thousand agents and it adds up fast.

You’re building the software company. I had a boss many years ago. We were looking to buy businesses and he bought my business and then we started going out there looking at other businesses to buy. He used to say to me, “You’ve got to be in the game because you can’t play if you’re not in the game.” Once you’re in the game, once you have people who rely on you and trust you and already buy something from you, the path to selling them something else is far easier than acquiring them as a new customer all over again. That’s exactly what you’re doing now. It goes even further. Now that you’re selling insurance and now that you are building software for other brokers to build their own insurance company and agency, it seems like you’re building other partnerships too.

You just dig into this passion and you put a lot of energy into it. You’d spend tough times and points. We’ve gone through our challenges, but we have attracted some significant companies. One of them is a smart home company called Vivint. They saw that we had this huge agency network and they said, “Can you offer our product to your clients?” Vivint Smart Home’s all about protecting people and giving them security. That goes hand in hand with doing insurance. We said, “This is a great partnership.” First of all, they opened it up to us but they made us a managing general agent. We can get any other insurance office out there, they can sign up for this program and we can pay them and they transfer a client over to sign up for Vivint. The thing that’s also nice about is they offered us numerous freebies and discounts we can offer our clients for going through us. There’s another pool of income. Not only for our partners but for us as well and more added value for the clients. That’s the Vivint partnership that came to the table as a result of everything.

Once you have people who rely and trust you, the path to selling them something else is far easier. Click To Tweet

The most important thing is that like my old boss used to say, “You’ve got to get in the game.” If you have the opportunity to talk to your clients about something else that would be of great value to them, understand how Emerson structured all of this and put this together. It’s pretty exciting. It seems like there’s almost no end to what you can create once you have a steady stream of people who pay you every year like you and want to do business with you and your wife because it’s a family business and they know you. This is a very interesting angle at taking a very staid and traditional business. Insurance got to be as boring as accounting but nonetheless, it sure pays well when you need it. This is what I believe is the strongest and most important element of what a great entrepreneur does. Always looking for these opportunities. What’s next for you Emerson? It seems like you’ve conquered the world so far, but there’s got to be more.

We have a limited amount of time. There are a couple other partnerships. One of them is extremely exciting and there’s so much more of that synergy that keeps coming. That’s what we’re going to hedge forward with. We’re going to start driving forward and doing strong aggressive campaigns to reach out to agencies all over the country. We’re going to bring this Yep Insurance partner hub to the table. Some of it will work. It depends on everything we have will be a perfect fit for what they do, but we are going to bring it all to the table. As we keep doing more of this, I expect many other partnerships to continue coming to the table. I see this becoming a partnership hub that’s almost like an insurance Groupon center for their clients.

What advice would you give on how to find these types of partners? What are the characteristics of a great partner and how would you advise someone to locate them?

The important thing to do is understand what is it that I’m bringing to the table for my clients? Also, brainstorm it. What other types of things make a lot of sense with that? Is there anything that would pair very well with this? You don’t necessarily have to reinvent the wheel. Sometimes all you need to do is go find that nearby type of business and reach out to them. With Vivint, we gave them a simple phone call and a day later we had our partnership. Don’t be shy, get on the phone and call. Make your way, make your phone calls and be creative. Have a lot of excitement and that’s what we’ve had. What’s helped us is we’ve been very excited about what we’re doing, and they can sense that energy and they say, “I need to be a part of this.”

For the audience, you are one phone call away from a partnership that could change your life forever. Who is it? Is there a person, a company, an agency or a connection that you could make now to convert, change and transform your life like no other? Let this be the inspiration for you right now. Let Emerson be that inspiration for you because look what he built, and you can too. Emerson, it’s absolutely been a pleasure chatting about this. I have a couple of questions for you. This particular question I ask every single guest and I ask for a reason because to me, it helps everyone understand a little bit more about you. Who, in all of space and time, would you like to have one hour to enjoy a walk in the park, a quick lunch or an intense conversation with?

There are so many different names that fly through my mind. I’m sure other people could relate to that. From a business standpoint, I would love to sit down with a gentleman like Grant Cardone. I would love to pick his brain and talk business.

Grant is an incredibly interesting guy. Grant and I know each other for many years. He is an incredibly unique individual. You’re attracted to him from a business standpoint and so am I because we like the way he thinks. He doesn’t think small, Mr. Cardone. He thinks big. He thinks hundred million-dollar deals, not $50,000 deals. That’s what’s so exciting about a guy like Grant Cardone. Maybe I could help you with that one and see if Grant is interested. Here’s the grand finale, the change the world question. This is a question that every guest gets to answer and feel inspired when they do. What is it that you are doing or would like to do that truly has the potential to literally change the world?

There are so many different directions I can go. Number one, the goal that I’m working on right now is to collect resources so that I can help others. Resources as in I need time and I need more funds to be able to do things where I can help people. That’s why I’m hedging forward to build a successful organization so I can start getting more of that free time and have more money to do philanthropic things. I don’t see myself necessarily picking one particular, but I do love helping people. Given the right resources, I would like to provide resources in a lot of different ways. The one thing that would be more centered on me and my passions, it’s maybe not so typical but I am a huge fan of music. It’s been in my family. I play the guitar. I still play music in a band at 35 and I love it. That’s a real passion. I would love to do something that would have a huge impact on musicians, performers and local bands and stuff like that to help them get the proper exposure. It’s just not there. Something that would level the playing field and have a huge revolutionary play on how we experience music. That’s something I would love to do. Something that would leave a legacy.

There’s your challenge. If you could think of something that Emerson can do and get him excited about it, you may have a new partner in store. Thanks so much, Emerson. This has been a lot of fun chatting with you and I’m going to leave that challenge out there to get ahold of you. If they have something, if they’re a musician or they want to band together with you and get more exposure for those fantastic musicians in the world. Step up, this is your time. Make a difference. Help Emerson change the world and join his mission. Thank you, Emerson. It’s been great.

Thank you, Mitch. It was a pleasure being in the show. Thanks for having me.

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