Episode 28 - How to grow the cash flow in your real estate business!

### Podcast Episode 28: If You List You Last

#### Introduction
- Host: Bob Mangold, the Listing Coach
- Episode: 28 of the If You List You Last podcast
- Acknowledgements: Thanks for sharing, listening, and downloading

#### Recap from Last Week
- Topic: Setting the foundation for your business
- Focus: Developing the business you want, not dictated by the company or market
- Example: Leveraging eXp Realty’s global presence for work-vacations

#### Main Discussion
- **Business and Life Integration:**
  - Plan business around your life
  - Maximize tax-deductible opportunities during work-vacations
- **Increasing Revenue:**
  - **Focus on Listings:**
    - Listing agents vs. buyer agents: efficiency and profitability
    - Strategy: 21 listings/year to make $250,000 with 210 hours of work
  - **Market Share:**
    - Becoming the "mayor" of your community
    - Importance of putting pictures on signs
- **Systematic Prospecting:**
  - Daily goal: Talk to 10 potential sellers or referral partners
  - Building targeted databases
  - Circle prospecting for open houses
- **Leveraging Referral Partners:**
  - Building relationships with divorce attorneys, estate planners, etc.
  - Adding 100 new people to your database monthly
- **Marketing Strategies:**
  - Frequency of online presence
  - Use of Facebook, Instagram, and Google Network ads
  - Email campaigns: newsletters and hot deals
- **Growing Revenue:**
  - Strategic partnerships and database hacking
  - Acquiring real estate and agents for overrides

#### Mortgage Market Update
- Recent economic data: Inflation, Producer Price Index, CPI
- Current mortgage rates: ~7.5%
- Common misconceptions about conventional loans
- Importance of educating clients about loan options
- Economic trends: slowing economy, consumer spending down, delinquencies up

#### Consumer Insights
- Understanding inflation impacts: Housing and insurance costs
- Rent dynamics: Renewing leases vs. new leases
- Owner's Equivalent Rent and its impact on inflation statistics

#### Practical Tips for Agents
- **Content Creation:**
  - Educating clients on loan types and market conditions
  - Building expertise and gaining views
- **Prospecting and Marketing:**
  - Systematic approach to contacting potential clients and referral partners
  - Importance of consistent and frequent marketing efforts

#### Closing Remarks
- Invitation to join the Real Estate Asset Advisors Facebook group
- Announcements of upcoming training classes on Facebook Live or YouTube Live
- Encouragement to download Bob's book for more detailed strategies
- Reminder: If you list, you last and make more money

#### Call to Action
- Engage with the podcast community
- Implement discussed strategies to grow your real estate business
- Plan and systematize your business for consistent and recurring revenue

Join our Facebook Group at: https://www.facebook.com/groups/realestateassetadvisors

Visit our website to watch replays of our Wednesday "Elevate Business Briefings" at: www.RealEstateAssetAdvisors.org

Download a copy of my book, "If you list, you last!" at www.IfYouListYouLast.com

Transcript

 Hey, welcome fellow listing agents. Bob Mangold, the listing coach here with episode 28 of the, if you list you last podcast. Listen, as always, thanks for sharing, listening, and downloading. Now, last week, I talked about setting the foundation for your business. To actually develop the business that you want.

Not the business that, let's say, your company or the market dictates to you. You decide and lay out the roadmap. What do you want? How many hours do you want to work? Do you want all the cashflow coming from your efforts and building your business, or I'm sorry, building your life around your business? Now, I had a few agents ask me to clarify, what I meant by that.

So here's an example. The company that I'm with, eXp Realty does business in 22 different countries. And we're paid an override if we help the company expand the roster of agents. So I can take a trip to, let's say, Italy. I can have a great vacation, hang out two, three weeks out in Italy, meet with some agents while I'm there so that I can expand my referral fee overrides and income and I get to hang out and tour the entire country.

A dream vacation. So technically I'm working, but I'm also enjoying. I can take and do that by design because I can make the decision to take and ensure that all of the revenue that comes in doesn't come in from production. It come in, it can come in from referral fee or override income. And I built and chosen the model to build my business in the EXP model.

Okay. So that I have the ability to literally plan my life around the business. Now, best of all, many parts of that trip would be tax deductible for the work that I did, meeting with local agents, literally meeting and having coffee and talking to them. And  that would be work. I promise you can do that kind of work and be able to tour.

Country like Italy, right? So that's part of just a one, probably the biggest example I can give you about planning your business and working your business around your life, not the other way. So  today we're going to talk about increasing that. And how does that work? And what does that look like?

So as always do me a favor, make sure you join the real estate asset advisors, Facebook group so you can join the conversation, share your thoughts, comments, or questions on any of the topics. I discuss right here on the podcast. And if you have a topic or conversation you want me to discuss on the show, go over to the Facebook group and share your request.

And I'm going to give you a advanced warning here, advanced notice.  I'm going to start doing more and more training class on whether it's Facebook live or YouTube live. We've got to decide which one is best to do that so that we can just start sharing training conversations. I don't even want to necessarily say.

training classes, conversations where I can get on and talk with agents about what's going on in their business, give them ideas of what they could do, what options are open to them, talk about what you know, I teach agents to do and go from there. So make sure that you join the Facebook group because we'll always make those announcements.

So let's get started with this week's show. So let's do our quick mortgage market update.  Last week had some pretty important releases in terms of inflation, producer price index, CPI, all that, housing starts, and all those different things. Overall, it was fairly benign because PPI, went up a little bit, CPI went up a little bit, but at the end of the day, folks, it didn't have huge impact.

on the market. So currently rates are sitting at around 7. 5 percent on a par rate somewhere in that area, right? So it varies based on credit score and things like that. But one of the interesting things that I had happened last night is I actually had a consumer say, Hey, I don't want a conventional loan because I have to put 20 percent down.

And I said that's not what defines a conventional loan. So I thought I would share that because this is a well educated savvy person who owns two other properties. He's a doctor  and he thought a conventional loan requires 20 percent down. And that's simply not true. A conventional loan is very simply thought of as a loan that will be purchased by Fannie Mae or Freddie Mac.

Now, it has to meet their guidelines and loan limits, right? Loan limits in your states and areas can vary, but that's all a conventional loan is. And you can actually do a conventional loan with 3 percent down. There's actually a down payment loan that came out where you can put 100, or, it's 100 percent financing.

On a conventional loan.  So at the end of the day Having a conventional loan, I think it's important that the consumer understands it, be if an agent didn't understand it, I thought I'd clarify it here today. But what it really points out to me, folks, is how important it is  for you to be creating content around a topic like that.

And I'll be honest, I've been doing this a long time. And I, made the mistake of assuming people knew the difference between a conventional loan and say, a government loan.  And here's a pretty sophisticated, well educated person and did not understand that. And so number one is it creates an avenue for you to create content to get out to your database, right?

And to be able to explain those things to them, because well, what it's doing is it's building your expertise  and I promise it'll get views. And that was the topic. I'll be honest. I wouldn't have thought. would have been that important. But after having that happen, I promise that it is now long term. 

The one thing I can tell you through all the reporting last week is the economy is definitely starting to slow down. Jobs are starting to slow down no matter how much they try and cook the books. Jobs are slowing down, right? And the biggest thing is consumer spending. Is definitely cutting back retail sales fell.

So again, not only do they fall, but when you have to adjust it for inflation, right? So if the price of, let's say clothing goes up 4%, then you should naturally see sales go up 4% just simply because it's the sales dollars.  But when sales dollars go down with say, a four or 5% inflation,  then sales are flat, and that's an issue.

Currently, and you don't hear this, but if you add food and shelter back in, because for whatever reason the government likes to say, Oh, we're going to monitor inflation, but we're not going to add food and fuel. The two things that you absolutely have to have. Guys, we're trending this year at 6.

4%. So that's putting a huge strain on the consumer right now. So consumer spending is down. Defaults and delinquencies are down. If you guys have ever heard of it, it's called BNPL, buy now pay later. 42 percent of consumers right now are behind on those payments to the BNPL lenders.  So you're starting to see some cracks in there.

So that's important for you to understand for your consumers. Hey, they're feeling strain in this right now, the biggest contributor, believe it or not, to inflation  is housing and. Insurance automobile homeowners insurance, right? That's up almost 20 a little over 20  And the question is why well a couple reasons number one cars are much more expensive to fix nowadays So if you have that car thefts have just gone through the roof And then damages and things like hurricanes and things of that nature.

So there's nothing we can do about that. The other thing is housing is going up. So the price of housing folks make no mistake about it is still going up, but the two biggest impacts on those number are rents and what's called OER owners equivalent rent. So here's the interesting dynamic. If you are re doing your lease, right?

You're going to renew the lease for another year.  Those costs are up 4%, but if you're entering into a new lease, they're down 1. 7%.  So people who stay, don't move around, are actually being penalized far worse and could cut themselves a much better deal. than what they have. If you do know renters, you've got family members, tell them they need to negotiate that.

But another big number in that is what's called OER, Owner's Equivalent Rent. And all that is a survey of people saying, Hey, what do you think you could rent your house for? It's like a zestimate. Everybody's over inflating that, going, Oh, I could get 4, 000 a month for this house. The truth is folks, the consumer has no idea. 

What they could rent their house for and whether it's accurate or not. And just like everything else, when you go into a listing presentation, they tend to over inflate it, don't they? The value of their house. What do you think they're doing with rent? And they're not even renting their house. So it's not like it's a survey of saying, Hey what are you renting your house out for?

They're saying, Hey, what do you think you could rent your house out for?  So those numbers are impacting the inflation rate. Now, there's a bigger picture that I'll be honest, I don't understand. Like, why the government feels it's important to do that, but they're doing it to manipulate the markets in some way. 

And just to give you another example, there's a couple of food items that they've left out of food price. appreciation. And one of them was bacon and it's up whatever it was, 45%. So the way that they can say, Hey, food inflation is coming down. They just started taking the biggest categories and saying, yeah, we're not counting those anymore.

Not accurate. Go to the grocery store. Better. But these are things that you're going to start to see that will have impacts on the mortgage rates Going forward. I can't tell you what they're going to be six months out There's too much politics going on at this point in time. You've got elections.

You've got all kinds of things going on The only thing I can tell you is pay attention  and make sure you're reading beneath or between the lines in understanding these things. Okay. That's the best advice I could give you to give to your clients right now. I don't see any big spikes up or down coming anytime soon.

So that obviously has an impact on our business. All right, let's get started. I had an interesting conversation with a group of agents in an event that I taught at that asked me, do I really believe that an agent should only focus on listings? And then I make it sound like working with buyers is a bad thing.

And so I pretty much want to clarify some thoughts around that because today I want to talk about how do you grow your revenue. And so be completely clear, I have nothing against working with buyers. It's a math problem for me. I actually, Really enjoyed working with buyers back when I was in production But at the end of the day, it's not the most efficient use of my time The other thing they said to me is yet, but you teach a lot of things on Finding buyers and how to market and all that stuff.

And the answer is I Of course I do. It's the real estate business. You're never going to walk away from money, at least if you're a smart business person. You just have to figure out how to let somebody else do some of that work and take an override and not have to do any work. Maybe you've heard it referred to as, hey, I'm the rainmaker.

That's what every teen leader is, folks. They're the rainmaker.  And they get an override on the business without having to do the work. And so that's what I'm talking about. So it's not that there's anything good, bad, or indifferent, or that I won't teach classes. I teach a ton of classes on converting business, building referral based businesses, and things of that nature, that  include buyers. 

Buyers are part of the real estate business, right? So at the end of the day, it's not that I'm saying, hey, the only thing you could do, and there's anything wrong with buyers, is just focus on listing. So let me give you an idea of why that is, right? So I'm going to share some numbers with you. And I, cause I just want you to think about what that would look like.

So if you want to make 250, 000 a year. Average home value, let's just say 400, 000, listing fee 3%, gross commission is 12, 000 a year, or deal, right? 3 percent of 400, 000. So if you want to make 250, 000, you have to close 21 transactions a year. The math is 20. 8, but humor me. Guys, at the end of the day, statistically, it shows that the average listing takes 8 to 12 hours worth of work.

That does not mean that's the agent sitting in the open house either. They have somebody else doing it, right? So let's just say 10 hours per transaction for a listing. If I have to do 21 listings to make a quarter million, I have to work 210 hours to do it. To do a buyer's transaction, they say it takes between 40 and 62 hours to do it.

So I just said, hell, let's just say we're going to be as efficient as possible. It's 40 hours. That's 840 hours  to make the same money  as somebody who did the 21 listings. Why would we do that? That's why I said, it's just math. So if the end of the day, you can go, hey, I like that better, and I'm willing to make less money to do it.

Hey guys, if that's the business that you want,  then build around it.  That's all.  So let's talk about, growing the market share. Here's a thought for you.  If you're a buyer's agent, what, how do you build market share? So let me define market share for you.  You're the one that everybody in the neighborhood knows their name, right?

You're the mayor of your community, your subdivision, your zip code, whatever you want to say it. And the reason is because while you market in there, you have a lot of listings in there and people see your signs. Promotional tip for you guys, put your pictures on your signs.  You want people to know who they are.

See, here's the thing guys, you can pick and choose when you're working with listings where you want to market.  You can do the research to determine how many transactions are happening in there. If there are other agents that have market share, what they do, how you can compete. You've got to analyze the business, but at the end of the day, you can have a targeted area  that you could become the mayor of the community.

Everybody knows your name. They see your signs and you can build market share. The reason that's important is because I'm assuming most people are going to want to do it right around the area that they live.  Now, some of the agents over the years that I've met made the decision, the bad decision, to target the area that they live in.

Then you do the research,  and you find out only three or four homes a year turn over in there. That doesn't make sense to focus your time for three or four three or four transactions, right? Doesn't mean you don't market in there, but you can't have a whole business plan based on three or four transactions.

In order to take and grow market share, where you have repeatable business, where you have a brand, a reputation, people know who you are, you have to list. And then if you're going to list, you have to have a system to do that. Because you can build your value proposition, your marketing, your scripting, your presentations, everything,  around that value proposition.

So for ours, it's pretty simple. Hey, as part of our quest to help our clients build personal wealth using the home they live in, when it's time to sell, protecting your equity and maximizing it is our number one goal. Now we have a no hassle or headache process that takes us 14 days to get you the highest market value guaranteed.

And the total marketing fee for that is 3%.

That's a value proposition. And then the answer to that is, let me show you how we do that.  So when we're talking to somebody, a potential seller, this is my value proposition. My goal tonight is to walk you through what that process looks like. Because I can build all my marketing, all my direct mail, all of my signs, all of my social media posts, everything can be built around that value proposition.

Make sense? And then if you have listings, it allows you to grow a personal team of agents to get more referral fees, overrides, right? You teach them how to work the open houses. For us, we get, call it, again, depending on market size, 100 to 600 people in an open house. One of my agents in the Northern Chicago suburbs last week Mother's Day weekend, had 681 people come to their open house.

You need a team of agents to do that. The agents then work with the buyers and pay you a referral fee. Or you can take and be involved in a company like eXp where you can help the company grow their agent count  in exchange for overrides and an ownership stake. It's your call. You built the business that you wanted.

So that's why we focus on listings folks. And then you've got to grow your revenue through systematic prospecting. And one of the things that I taught a class last week and it really hit me. I can tell agents, till I'm blue in the face,  that if you'll make calls to FSBOs and expireds, you'll make a lot of money and a lot faster.

And none of that changes, folks. So the things I'm going to share with you today, Aren't designed to say do this instead if you want the fastest route to money You're listening this podcast and you're going duty. I need some closings fast It's talking to Fizbo's and cancel Fizbo's and expires. And the only reason I hesitate on cancels is hey there They're you know, their circumstances could have changed why they were doing it.

They may have just hated their agent. That's possible, but  Maybe they were expecting a relocation and it didn't come through or something along that line So But one thing we know folks, if you'll talk to FSBO and expireds,  you're going to close business. But you have to have systematic prospecting every day.

So what I teach our people is very simple. You have to talk to 10 potential sellers or referral partners every single day of the week that you work. And then you've got to create targeted databases  of people that are likely to sell over the next, whatever, call it six months to two years.

And then you need to start being in front of them. Okay. And then remember, if you have these listings, you can call around, right? Circle prospecting to drive traffic to your open houses. So one of the things that I encourage the agents that I teach Is to have a database of renters, not necessarily to pick them up as buyers, but it's not a bad thing, but it's to drive traffic to your open houses to start conversations with people because yeah, they may be renting guys, but they can also buy.

So prospecting is critical. And then  I got this phrase  from a book by Mike Koenigs. It's probably 10 years old. And it's you now everywhere. Are you everywhere now? And what that means is you need to be everywhere that people that may be selling, buying, or investing in real estate are at.  And you need to be there all the time but at the end of the day, most importantly you need to be there now.

So many agents do marketing for two, three months, four months, five months and then they stop. Guess what, folks, you're stopping right before the marketing starts to take effect. They don't just see one ad and say, Oh, got to call that person. And that's, I'm not going to say it never happens, but it's not very likely, right?

So your frequency is critical.  You've got to be out in front of that database,  right? Here's one simple trick. Let's say I have a database of whatever 2, 000 people. What if each day I made a task or more importantly I hired somebody outsourced to let's say the Philippines for five dollars an hour  and I had them go request friend requests from those people look them up and see because now every time I post those people will see hopefully because frequency is critical.

They should be seeing you online. That database, if you can have them set up where they're seeing you online at least three to five times a day,  your results will be amazing. Now, how do you do that? It's relatively simple. It's Facebook custom audience ads. It's Instagram custom audience ads. It's YouTube ads and then it's something called the Google Network  and that's where they insert your ads into all kinds of news articles.

So the best example I can give you is Breitbart. Go to Breitbart or Drudge Report and what you'll see is all these local ads in there and so now the consumer thinks, oh my gosh this person is advertising on a national, website. All it is folks is frequency. That's why the message has to be frequent, the branding has to maintain itself,  right?

Don't keep running different ads, different colors, different things. They'll never know it's you. If you've got a database, they should get an email from you twice a week. One could be a newsletter  in one week, one week called hot deals. It's one eight or I'm sorry, one listing where maybe they reduce the price or maybe it's under market or whatever. 

But imagine if those people were getting that two things a week from you and seeing you three to five times a day online. If your budget allows, send them a postcard once a month.

And then a minimum of one phone call per quarter. That could be inviting them to an event, like we have an event that we have called the mortgage hack to show you how to use a government rebate.  to save 100, 000 or more and pay your home off in seven to 10 years.  What if you just invited him? Heck folks, it doesn't matter if you just left him  a voicemail,  or to call your past clients and ask for referrals.

See the fortune is in the follow up. So it's always the riches are in the niches and the fortune is in the follow up. Guys, it's true. Next, You want to increase your revenue? Grow your Rolodex of referral partners. Again, frequency is critical. How often do these people hear from you? And those could be divorce attorneys, estate planning attorneys anything of that nature.

Local plumbers, service providers, and people go, hey, Bob, could you refer a plumber? Could you refer a painter? I'm working on building a process

called The business plan for realtors that hate cold calling. One of them is about how you build a Rolodex of referral partners from local businesses, because guess what guys? If I can target my database of people, can I also target my referral partners? So they're going, Holy crap. I see this guy everywhere.

And what if they get the same two emails from you every week? And once a month you're calling checking up on their business and asking them for referrals. What if you had, let's say just 25 of those referral partners a year and they all referred, just call it two, call it one. There's 25 transactions.

You only needed 21 to make a quarter million dollars. So that's another way of doing it. Then you can grow your database of people that you know, right? You should be adding a hundred new people a month to your database. Now that could come from circle prospecting or for most of our agents, it comes from their open house traffic,  right?

If we're having a hundred, 200, 300 people, we should easily be able to take an ad at least half of them into our database. And then what about people that your referral partners have? They all have databases. What if we got really creative and I taught a class on how to hack their database and get their clients to become your clients, right?

You could do online ads. You can post on social media. We just finished the Home Boss Guide to Getting the Most Money for Your Home. We'll create marketing around that where people will be able to raise their hands and download  that book. Because that's the next topic. It's great to have all these databases, folks, but you have to be able to take and grow the number of people that are raising their hands each week.

So if we offer a guide on how to get the most money for your home,  and I've identified you in a group of being likely to sell.  And now you download that book.  You just raised your hand. You told me you're far more likely to be listing soon, whatever soon might mean. It could be a week, it could be a month, it could be three months.

But you're now starting to take action on educating yourself. So you've got to do some things to get them to raise their hands each week. Now your referral partners can help you do that too. We can leverage those referral partners and I've not enough, certainly not enough time on a podcast to do this.

This might be one of the classes I start teaching on a Facebook Live inside the Real Estate Asset Advisors group. But, you need to like, grow the number of people that raise their hands because that's going to be your future business. Getting revenue through strategic referral partners. That's, future business.

You're starting the relationship today that hopefully over the next 15 years, those people are sending you a couple people a day. You can hack their database and start getting their clients. And there's very strategic ways to do that and start doing that. And then finally, folks, the last way  is  to acquire real estate. 

If you want to grow revenue for yourself, acquire real estate. Start acquiring agents that you get overrides on, whether they sit your open house, your company provides that, whatever it is, start growing your revenue through those two channels. Because hiring agents is, doesn't have a cost to it, to be honest with you.

Real estate obviously does. But if you want to build your personal net worth, the number one way to do that, folks, is to own real estate. So I want to give you some ideas and some things to trigger you this week about how do you grow your revenue. Because my goal is that you sit down You build out a plan that you want.

This is what I want my business to look like. This is what I want my money to look like. This is what I want my life to look like. And you put that in place. Once you have that in place, you can start focusing on your revenue. Again, team this does not happen in a week or two. This is about changing the way you build a business that's profitable and generates consistent and recurring revenue to you.

I'd love to tell you, you can snap your finger and that just happens.  And at the end of the day, it doesn't. You have to plan it out, then you have to put systems in place.  And then on the next podcast, it's an easier one, just put it into autopilot and watch the growth happen and just keep your finger on the pulse of your business.

So again, if you want to learn more, like more detailed information on what our process looks like, go download my book at www if you list you last So that's it for this show. We'll talk to you next week. And remember, if you list, you last, and you make more money too. Side benefit. Talk to you guys next week.

Have a great week.