Cupit Street Embarks on Acquisition Plan

Century 21 national operation lends hand to regional consolidation effort

If everything goes as planned, Mike and Bert Cupit will soon be operating the largest real estate agency in the state and one of the larger agencies in this part of the country.

The brothers bought Century 21 Dave Fulton Real Estate of Fayetteville at the end of December and changed the name to Century 21 Cupit Street. They have begun an aggressive campaign to expand the business both through building the existing agency and acquiring other agencies.

They will have some help at the corporate level. Nationally, Century 21 plans to consolidate some of the more than 7,000 company franchises and reduce the number of agencies to about 3,000 larger, regional offices. There are six Century 21 offices in Benton and Washington counties, including Cupit Street.

“They have talked to us at length,” Mike Cupit says. “Their plan is for us to become one of the super regional agencies.”

The agency already was the largest Century 21 franchise in Arkansas and Oklahoma with more than 50 agents and annual sales exceeding $60 million when the Cupits bought it.

“Our goal is to get much larger through recruiting and acquisitions,” says Mike Cupit.

Cupit Street is the fourth-largest agency in Northwest Arkansas. The largest agency in the state, Harris McHaney Shearin Realtors of Rogers, has more than 140 agents and sold more than 1,000 properties last year valued at more than $100 million.

Since purchasing the agency from Fulton, the Cupits have acquired the Bob Knight Agency in Siloam Springs and Kumpe & Co., a Century 21 franchise in Rogers. The acquisitions added 15 agents to the agency and the Cupits expect annual sales to exceed $100 million this year.

The Bob Knight Agency added 12 agents to the company and gave it a larger office in Siloam Springs along U.S. Highway 412. Mike Cupit says he is excited about the possibilities of the area.

“We think that office has as much potential as any of our offices,” he says.

Chad Kumpe, the owner and broker of Kumpe & Co., will continue to work with the agency as training coordinator, Mike Cupit says.

Other acquisitions are looming for the agency. Two of the acquisitions are “imminent” and could be finalized within 30 days. Negotiations have just started on a third acquisition in Missouri, he says.

Although the Cupits declined to discuss the financial details of the acquisitions, they say there are no outside investors or silent partners in the agency.

The company has grown from four offices to six since the first of the year. The company will move into a new building being built at the Beau Terre office park in Bentonville in September. Cupit Street will have 2,850 SF of the building and Coca-Cola will occupy the other one-half of the building.

“We see great potential in the Bentonville area,” Mike Cupit says.

Besides enlarging the company, the brothers plan to introduce a new concept to real estate in the area. They call it “bundle services,” a one-stop, full-service concept that combines selling real estate with financing it, providing title insurance and other related services.

“We feel that is the future of real estate,” Mike Cupit says.

The practice already is common in larger metropolitan areas, he says.

The mortgage company, named The Mortgage Connection, already has been formed and is just weeks away from making its first loan. Boyd Billingsley, a 20-year employee of Cooper Communities Inc. of Bella Vista and former vice president of business development for Bank of Bentonville, has joined the company to manage the mortgage brokerage. Billingsley also is a partner in the mortgage company with a “significant percentage” of ownership, Mike Cupit says.

“He gains us two or three years of credibility in Benton County,” Cupit says.

The brothers have hired five people to work in the mortgage company and expect to finance as much as 25 percent of the real estate agency’s sales through the company during its first year. The mortgage company also will provide financing for buyers who might not qualify for conventional loans from conventional sources. The mortgages will be sold to secondary markets.

All of these things are coming from two men who have never sold real estate or worked in the real estate business. Mike Cupit, 44, was a partner in several car dealerships in Louisiana and his brother, Bert, 49, was an investment banker before the two bought the real estate agency.

“I was seeing Bert once a year,” Mike Cupit says. “That didn’t seem quite right. We started looking for something to buy together.”

The brothers have always been close and had been in business together before. In 1979, they started their own oil business, Total Energy Network Inc. of New Orleans. The company provided a computer service that located parts for equipment used in the oil business. They closed the business in 1985 when oil prices tumbled from $35 to $10 a barrel.

Bert Cupit became an investment banker in Memphis before moving to Northwest Arkansas to work for the Llama Co. 10 years ago. After six years there, he took a job with Dean Witter Reynolds Inc. where he worked for four years.

Mike Cupit became a Cadillac and Rolls Royce salesman at Sewell Village Cadillac in New Orleans, one of the top car dealerships in the nation. Two years later, he invested in a Ford, Lincoln, Mercury dealership in Franklinton, La. During the next several years, he invested in three more dealerships in the Gulf Coast area and became part of a team managing the four dealerships.

Mike had visited Northwest Arkansas several times to see his brother and “liked everything about it.” They began looking for a business opportunity and approached Fulton about buying his agency last spring.

“It didn’t go much further than that,” Mike says.

However, negotiations continued. The brothers studied the agency to determine its value and its potential in the market. Mike Cupit sold his interest in the car dealerships to his partner in September and closed the deal with Fulton on Dec. 31.

The Cupits originally planned to keep the Fulton name on the agency but changed it in March to Cupit Street. The brothers lived on Cupit Street when they were boys in the small town of Columbia, Miss. The street, a 60-yard gravel road, was named for their grandfather and was adjacent to a pickle plant.

Why real estate?

“Business is business,” Mike Cupit says. “The principles are all the same.”

The brothers say the real estate industry has yet to experience the consolidation and mergers that are sweeping other areas of business. They expect to capitalize on the national trend with their agency.

“Real estate is the last bastion of the mom-and-pop industry,” Mike Cupit says.

Mike Cupit believes the business will succeed “beyond my wildest expectations.”

“Failure is not an option,” he says. “I won’t let this business fail, period.”