Episode 35 - Income to Value Quadrant: Boost Your Real Estate Business

**Episode 35 - Income to Value Quadrant: Boost Your Real Estate Business**

**Introduction:**
- Welcome from Bob Mangold, the Listing Coach.
- Appreciation for listening, sharing, and downloading.
- Topic: Income to Value Quadrant and how to move your business into different quadrants.

**Income to Value Quadrant:**
- Created 10 years ago to help agents understand business positioning and increase earnings.
- Importance of providing value to clients to enhance income.

**Real Estate Market Update:**
- Last week's market highlights.
- Positive impact on interest rates.
- Predictions for interest rate drops by year-end.

**Core CPI and Inflation:**
- Explanation of core CPI and its role in determining inflation.
- Impact on interest rates and the real estate market.

**Finding Business Listings and Referrals:**
- Importance of providing value to clients.
- Strategies to move from the failure zone to the freedom zone.
- The role of a strong database and consistent communication.

**Value Statement:**
- Developing a strong value statement to differentiate from other agents.
- Importance of consistent value delivery for client retention and referrals.

**Building a Successful Real Estate Business:**
- Overcoming the burnout zone.
- Strategies for creating a sustainable and profitable business.
- Emphasizing the importance of systems, processes, and a strong database.

**Freedom Zone:**
- Achieving financial freedom through effective business practices.
- The role of referrals and team building in long-term success.

**Closing Remarks:**
- Encouragement to determine and enhance your value proposition.
- Invitation to join the Real Estate Asset Advisor Facebook group.
- Announcement of upcoming live objections class.
- Reminder to join the weekly overview classes for more insights.

**Links and Resources:**
- Join the Real Estate Asset Advisor Facebook group for discussions and updates.
- Register for the weekly overview classes at www.creaoverview.com.
- Learn more at www.realestate.com.

**Outro:**
- Thanks for tuning in.
- Reminder: If you list, you last!
- See you next week.

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 number 35 of the If You List You Last podcast. Hey, as always, thanks again for listening, sharing, and downloading. So today we're going to talk about the income to value quadrant. and how to move your business into the different quadrants.

And it's something that I created about 10 years ago to help people or help agents understand where their business resides and how to make more money. Now, just a reminder, make sure you join our Real Estate Asset Advisor Facebook group so you can join in on the conversation, share your thoughts, comments, or questions on any of the topics I discuss right podcast.

And for example, next week, I'm going to do a live objections class where I'm going to let agents fire whatever objections they get right at me without preparation, no notes, no nothing, and be able to answer that. So I get a lot of calls for how do we do that? So I'm going to take and post that information inside the Facebook group.

So let's get into it. Let's talk about this week's market or really last week's market because my gosh, a lot of stuff really happened. And so the good news is that really some big numbers came out last week that are impacting interest rates in an extremely positive way. And I actually seen Lawrence Yuna of NARS predicting rates around 6 percent by the end of the year.

Now that would be amazing if that happens. I think that'll have a huge impact  Getting buyers off the fence and things of that nature, but again prediction But I can tell you based on the numbers that we're seeing Based on the events and charts and lots of technical analysis I don't disagree with him at this point.

Last week the core the core CPI came out and it actually declined. Now, the core rate is really determined and it's the rate for determining inflation. Don't really love that one because it strips out food and energy prices. That's what 80 percent of somebody's budget. And so at the end of the day, I don't personally love it, but it is what it is.

And it it actually increased by one 10th of a percent, which is one 10th below the estimates. So in all these experts eyes,  inflation is coming down. So year over year, core CPI. actually declined from 3. 3 percent. Now I promise you that was a rounding error, a rounding number, because it didn't literally drop a full one tenth of a percent.

Now that was lower than the three and a half percent that was anticipated. So the markets took that very favorable. Now almost all of the inflation that's coming out right now is coming from shelter, which is what we're involved in, and motor vehicle insurance, Everything else only rose like 19 from last year.

But the big story is that Shelter finally started to come down  with a very modest 2 tenths of a percent. Now, folks, Shelter makes up 45. 5 percent of the core index. And really where the numbers are moderating, is in rent and what's called  OER, Owner's Estimate of Rent, meaning they call up investors and say, Hey, what do you think?

Or they call up homeowners and ask them, Hey, what do you think you could rent your house for? It's literally that inaccurate,  but they use it, right? Now, remember real time blended rates, rental rates 3 percent a year. Now, everybody says that's great. Inflation is coming down, but the reality of it is it's still going up 3%.

That's after a 20, 21 percent increase over the last couple of years. So yes, it's moderating, but we still are paying extremely high prices. For things that we weren't paying for last year. Makes sense. Now, motor vehicle insurance is really the, one of the bigger culprits of it because it's expensive, number one, we have a lot of stolen cars.

Number two everything is turned to computer chips. And anybody's ever had a minor fender bender, knows that it's gonna cost three or $4,000 to fix it up. And literally the insurance companies have to pass that along in. the form of higher rates, right? So while the numbers were encouraging not the end of the world because then Friday comes along and the producer price index comes out and that's what measures wholesaler producer inflation.

How much does it cost to make things? That rose two tenths of a percent in June, which was hotter than the one tenth that they expected. And again, we always have these revisions. It was revised higher.  And from May. So what that means is it's costing more for the producer to make goods, which ultimately gets passed on to the consumer.

So doesn't make much sense, does it? That it's costing a producer more to make things, but it's costing a consumer less to buy them. But year over year, producer inflation rose from 2. 4 to 2. 6 percent, which is hotter than the estimates of 2. 3. Now, why is that important to you? The real answer is because that will affect inflation down the road, right?

If it costs more for somebody to make something or build something right now,  then that'll get passed along to the consumer six months or 12 months from now, which means inflation is not going to moderate that much, right? To be at a 3 percent inflation rate right now with all the moves that we did in the Fed funds rate it's a sticky problem, folks.

And so while I do think interest rates are going to come down listen, elections are going to have consequences.  Monetary policy is going to have consequences, we'll just have to see what that is. But for right now things are very encouraging, right? There's like a 97 percent chance of Wall Street is giving it of reducing the Fed funds rate in September.

Whether that happens or not, who knows? Personally I think they're going to try and avoid doing as much of that as they can because it would be looked at as election interference.  So that's what's going on last week. Inflation is moderating. That will be good long term for interest rates and we'll just keep our eye on it.

So let's talk about finding more business listings and referrals. And about 10 years ago I created something called the results to incur, I'm sorry, the value to income quadrant. of a business. And so if you can look at a quadrant and say on the left side is your income  and on the bottom is your value. 

And so really what that means is the less value that you offer,  the less income you'll make. So if you have any doubt that's true,  ask yourself this, why do 87 percent of real estate agents fail in the first couple years? And the answer is because they don't really offer any value. We teach them to go out and hey, send letters to your family and friends or postcards and let them know you're in the real estate business.

Folks, let's be honest. Those are the people that know you best. And they understand you have absolutely zero experience in the real estate business.  And then agents get mad when they don't hire them. But let's just be honest, folks, they know you don't have experience. And are you really going to trust a four or 500, 000  process or event to somebody with no experience? 

And so in my opinion, yes, there's all kinds of training issues why real estate agents don't succeed and we teach them to do the wrong things. But at the end of the day, the number one thing that I teach agents is if you want to make more money, bring more value to your clients, period.  And as a new agent,  You don't have any value.

You don't have experience. You don't have expertise. Now, the next phase of that is, is, what I call the burnout zone. The first is the failure zone. So that quadrant is the failure zone. You're not offering any kind of benefit at all to work with you.  And so in order to take and become successful, you have to reach the burnout zone.

The burnout zone means, hey, you sit there and pound the phones three to four hours a day. calling complete strangers saying, Hey, you think about buying, selling or investing in real estate?  And listen, there are lots of people that have a great work ethic. It can do that. The problem is it only lasts so long.

You can't do that for 10 years consecutively. You have to take and build. A business where you start generating referrals out of your database or people from your database that will work with you again, right?  And so if you're not focused on building the right things, which is what we do in the failure zone, we don't teach agents about building a database and how to manage it and how to set it up and how to organize it and how to, code people, right?

And the way that I teach it is doing an A, B, C, D, right? D meaning, hey, completely cold, won't return your call. You know what? Leave them in a email drip, no problem. A means they've referred business to you or if they've done business with you again.  Do you have your database set up that way? And then do you have campaigns and things built out to be able to reach those people?

So what I teach is twice a week, we send out an email and a text message.  And then we have a whole process that we take and post once a month into social media, email, letter, direct mail, text messages out to our database. If you had that,  you wouldn't be in the burnout zone then, would you? Because you've got processes to take and help you.

But at the end of the day, until you can determine what your value to the client is,  You're in trouble, right? So if you've been on any of my other podcasts and listened to the other things that we talked about or been any on any Of my elevate business briefings. Hey, you understand if it relates to listings We just say hey in order to protect or in order to take and help our clients build personal wealth Our number one goal is to protect your equity  With our trademark process where we can guarantee you get the highest market value in 14 days eliminating the hassles and headaches  of an old fashioned listing at half the traditional cost, right?

There's a value statement. If somebody's buying a house, or really to all of our clients, our main goal for our clients is to help you secure a piece of real estate,  use government rebates and some other systems to be able to pay that house off in seven to ten years, saving you hundreds of thousands of dollars in payments and interest, and then using the money that you would have paid to the bank Turn it into a million dollar cash retirement fund. 

In addition, folks, that's on top of the equity in your property.  So my goal is to turn people into millionaires. So that's the conversation that we have. Do you see how having a value statement  can lead to you being able to take and make more money?  So in the beginning, when you don't have a value statement and you don't have any value to the marketplace, you're new, you're inexperienced, The likelihood of you failing is very high. 

The next quadrant is that burnout zone where, hey, you still don't have a value, but you're willing to offset it with  hard work. And that can work, right? You'll get more results, but it's really backbreaking.  The third quadrant is the more value that you begin to offer, right? You get a little bit more experience.

You do some deals, right? I call that the comfort zone.  That's where agents get into a place where they're making, again, depending on your market, 40, 000 to 150, 000, maybe 200, 000 a year. You're making a good living, but you're not getting rich.  That I refer to as the comfort zone. And in my opinion, the number one place or the number one cause  of,  or the number one inhibitor, I guess I should say, to creating wealth  is comfort. 

You're happy.  Happiness inhibits you from pushing further.  And so you go, Hey, that's great. You know what? I've got a pretty decent life. I pay my bills. I can go on a vacation or two. And things are good. That's the comfort zone.  And most agents just get in there strictly on time. They still haven't figured out how to create value to the consumer, how to create value into your database.

Folks, as I record this, I will tell you 80 percent of the agents that I talk with, whether it's at a live event that's online or in consultations, 80 percent don't have a database.  That's shocking to me. And so at the end of the day, if you don't have a database, you will never move into what I call the freedom zone. 

That's where you have business coming in and you don't have to work that hard.  And so we stay in the comfort zone because we don't really go out of the way to take an offer any more value. Yeah, we're happy. We're comfortable. And so we don't need to see the need to push any further.  And the way my brain is wired, and it's just my brain, says what if I could work for 10 years  and make enough money that I don't have to work after that? 

So I'm not real good in the comfort zone because I'm always pushing to the next level. How do I get better? If you're taking five to ten listings every month,  then you need to take and have some buyers agents to work your open houses. Those agents pay you, let's say, a 25 percent referral fee or a 25 percent override.

And in our case, our company pays us an override on that business on top of it. So now I have two forms of referral income coming in. Hey, if I build that team successfully enough for that group successfully enough at some point,  my referral fee income can offset  the transactional income. That to me is the freedom zone.

When you can do what you want, where you want, when you want, with whoever you want, and not worry about money.  Now, it suggests most agents want to get to the freedom zone, but they're not willing to pay the price that it takes to get there, right? That means, hey, becoming really good at listings. Now, I know you might be listing this and going, Oh, get five to 10 listings a month.

Oh, that's impossible guys. You just need to understand there are agents out in the marketplace right now that are getting anywhere from 40 to 60 a month.  40 to 60 listings a month. So it can be done, it's just, are you willing to pay the price? Are you willing to do the things? Are you willing to invest the money to market?

Are you willing to invest maybe hiring in an ISA to do some of the work for you?  Because you can't get to the freedom zone alone. That's what I can tell you. And that's why it's critical to take and have the cash flow  to be able to take and enter that freedom zone. You just don't get there by, good looks and charm.

That's  You've got to have a database. You've got to have a value statement. The more of that you have, the more value that you provide, the faster you get to the freedom zone. How can I say that? It's real simple, folks, because people start to refer you more. You don't have to spend money to get that business, right?

When I was producing, All my business was coming from referrals. Was there a point that I was on radio and TV and all that? Absolutely. Make no mistake about it. I was spending big bucks.  But because of the nature of how we built the business and our value proposition, I was able to stop spending any money and still seeing our business increase.

But you gotta work to get there. Now the good news is that only took me about six years to do.  By the end of ten years hey, we were good. That's the freedom zone. And so the question that you really have to ask yourself right now is,  A. Are you happy with your income?  And B. If you're not, you need to go look in the mirror and be able to answer this question for yourself.

Why should somebody work with me instead of everybody else? It's really that simple, folks. It's no more complicated than that. You have to determine that. You have to take and come up with some processes and systems and marketing, right? Some social media content, things like that gets the word out. 

And so at the end of the day, that's really what I help agents do. But you've got to figure out what your strong suit is, right? We all have different personality types.  So you may be sitting there going I'm very analytical, right? So if you kinda look at the disc pros profile, D is the driver, I is the life of the party.

S is the pleaser, and the C is the analyzer. Folks, there's a place for every personality type in real estate. Let's just say you're sitting there going I'm very analytical. Who are you gonna appeal to? The answer is investors. You love spreadsheets. You love cash flow statements.

You love analyzing return on investment.  Depersonalities hate that stuff.  So you're going to appeal to a person. You have to figure out what you like, what you're good at, what you have fun at doing,  and then match that up to who you want to work with.  Now I know that sounds harder than, would think,  But it's really not.

You're going to have to really just sit down and write down what it is that you like to do. What do you want your business to look like? That's why we have a business plan and we make our members create a business plan. Because they have to figure out what they want to do when they grow up. What do they want their business to look like?

How long do you want to work? How much money do you need to make so that you don't have to work anymore?  And then you have to put systems in place to do that. But the place that it all starts is the customer, the consumer. If you don't provide value to them,  then at the end of the day, folks, you'll be working hard forever. 

If you read the book, The Millionaire Real Estate Agent, yes, it was written 25 years ago. It was the top 50 agents that Gary Keller interviewed looking for the commonalities that they all had. He found two things. Number one, they were all listing agents. Number two, they managed their databases tenaciously. 

Here's the thing, folks. One of those 50 agents,  won't say a name,  25 years later is still spending as much money advertising on TV and doing the things that they were doing 25 years ago still working even though they're up there in age now because they didn't do a good job delivering value to their clients which means they constantly had to keep advertising because they weren't getting repeat and referral business. 

You need to fix that hole. Now still probably making really good money but spending a lot of money too.  So that's not the kind of business I think most agents  want to build. Now, if it is then, same thing, I'd tell you to have a business plan. But, the question is, do you need help adding value to your business?

If you do,  you should consider becoming a member of the Real Estate Asset Advisor Network. Now, if you want to learn how we train agents to add value and benefits to their clients, visit us at www. realestate. com. And you want to learn what we do to help agents? You probably want to attend one of our overview classes every Thursday at noon eastern time.

And you can register for those at www. creaoverview. com. That's the acronym for Certified Real Estate Asset Advisor.  I get a lot of questions. Why did I come up with that name? Why did I come up with another certification? The answer is real simple. When somebody says, what do you do? And you go, I'm a real estate agent.

You ever notice how people back away from you?  But if they were to ask you, what do you do? And you said I'm a real estate asset advisor.  The logical question that they're going to ask is what is that? Now I got you to ask  the question that allows me to answer. What I do is I help people use their personal residence  and take and turn it into a million dollar cash retirement fund by getting the home paid off in seven to 10 years. 

using  the bank's and the government's money to fund the million dollar retirement plan. And I'm going to do it with money that every other real estate agent, financial advisor, CPA is going to have you spend.  And at the end of 30 years, you'd have a million dollar retirement fund and the equity in your house. 

So that's what I do. That's what a real estate asset advisor is. Do you think we get more business because we say that? Because we're always using that value statement, aren't we?  So if you don't have a value statement,  your income is going to suffer by that. All right. So that's it for this show. We'll talk to you next week.

And remember if you list you last talk to you next week.