It’s been a while since I did some musical sharing. Given my post about mental health the other day I thought I’d combine the two. There’s a lot of good Hendrix covers out there and I’ve been loving the Songza World of Jimi Hendrix playlist. Jeff Beck is legendary and Seal has a great voice for Hendrix. Enjoy!
Marketing is a funny thing. There’s a bygone era that the 1950′s Mad Men typified which made mass marketing an art form. It worked great back then. Today it not the same. We’re immersed in messages from every angle. Brands are on everything and I dare say that you can find 10 logos or advertising messages without leaving your chair.
Here’s the point. In a world full of ads, when you only get seconds of someone’s attention, you need to be persistent.
Pretend you’ve been given a $100 credit to be used for a small ad in a series of professional magazines for $10/month per group. You can chose from Accountants, Dentists, Construction Mangers, Carpet Cleaners and Fish Tank Salespeople.
Do you put an ad in each groups’ magazine for two months, or do you advertise for ten months for just one group?
The latter option. Don’t blunt your message. Trying to be everything to everyone is the best way to be meaningless. Pick a group, target them effectively, speaking their language and addressing their concerns. Research has shown it’ll take 6-8 impressions before they remember you even a little bit.
This extends to personal marketing too – past clients, friends and business associates still need to be reminded you exist. It’s better to spend money with people you already know before you start spending a lot on trying to convince people you don’t even know yet.
Amongst real estate investors (and most group of people) there’s a lot of confusion about how organized real estate works. Commissions are pretty straight forward, though they very by location and property type (i.e. commercial properties have a different commission because they require different efforts).
Referral fees are pretty simple and describing them makes me feel like a pimp. I’m going to explain how they work for me, which is generally how they work across North America.
I pay for business
When a great REALTOR® in Toronto has a client moving to Edmonton or looking for an investment property here, they introduce their client to me. I help them find a property they love, they buy it and I send them a cheque for at least 25% of my commission. Actually my brokerage sends the money to their brokerage so it’s all above board.
Ok, maybe I am a pimp
I love when people come to me asking for referrals. Yes, I do get paid eventually, but I enjoy the process of helping find the right agent for someone. Sometimes I already know someone (Calgary, Red Deer, Grande Prairie, Fort Mac, Vancouver, Toronto, Hamilton are all covered already) but sometimes I don’t. Then I get to earn my referral fee, if I ever get one, by doing the leg work to help them find the right agent.
When an old work friend called to say him and his wife were moving to a small town north of Barrie I was glad they asked. I had a great time calling around and getting to know some agents near them. I ended up suggesting a couple but found one that I thought would really click with my friend’s sense of humour. When I dropped him an email after their first trip up there to look around they’d already bought a house and had a great time. Home Run!
It’s the cheesiest line in real estate, but referrals are awesome. It’s also a part of the real estate economy that you should be aware of before you start calling around. Asking a great Realtor can help simplify your search and help you both out.
I’ve been spending a lot more time lately with some investors who are absolutely rocking their business in 2014. There’s a couple who I know through REIN and who also sit with my on the REIN Advisory Board, who attend our Edmonton Revenue Property Investors Meetup Group. One thing that I’ve noticed is that they all really understand the value of good marketing.
Some investors don’t understand when I say that marketing is a skill that investors need to develop. It’s not all about finding a deal or being great at renovations. Here’s three examples.
Fill Vacancies Faster With Your Website
Sure, I’m a huge fan of using online marketing for classifieds. I’ve written reports about online classifieds and use them tons as an Investment Realtor. But the key is making sure you also have a website for your real estate business that lists your properties, even if they’re not vacant. You’re multiplying the value of your ads, because prospective tenants can go from your classified ad on Kijiji to your website and see that you have another unit for rent that’s closer to their work. One ad, multiple products.
Share Solutions, Find Business Opportunities
Real estate investing is a business. You have a product, such as properties available for rent, or you provide a solution like forclosure prevention or rent-to-own services. The key in just about every business is making sure your potential customers are aware you’re open for business and what you have for them to buy.
By making sure you’ve got a solid home online, you give tenants, sellers and investors a place to see what you’re doing and how you can help them. They can come from all sorts of places: your business cards, your Facebook profile, an ad you bought in the program for your church’s silent auction, searches on Google or a Kijiji ad. The point is they can explore what you’re doing and make the appropriate contact when they think you have the solution to their problem.
Love List Building
The key to this process is keeping track of who you’re in contact with, who you know and how you can serve them.
The tenant in your 1 bedroom condo who just married is now a customer for your two bedroom. The professional couple who got the big promotion and a transfer is someone you could refer to a Realtor and get a referral payment.
To know when these things happen you need to keep a clear list of who has contacted you and be in regular touch with them. A monthly newsletter for your tenants can be a great way to remain visible and remind them that you’ve got other places for rent or you can offer referrals, or help buying a property. When you have friends or family who seem interested in real estate investing, make a note somewhere so you can follow up to nurse their interest along, either to support them in their own development or as a potential joint venture partner. Learn the meanings of the words cross-sell and up-sell.
I’m a big fan of computerized systems, though index cards, a rolodex or Excel will work. Personally, I use both Highrise from 37 Signals (simple and inexpensive) and SalesForce (expensive and very complex) for different roles.
Like it or not, business requires marketing. If you can’t or won’t then your investments are likely to under-perform. If you get it and are willing to learn and find the right tools or partners, you’ll be riding the crest of the wave.
This was one of the most important things I’ve read this month. Connie Campbell (Don Campbell‘s beautiful wife) posted a thought provoking article from INC. called The Psychological Price of Entrepreneurship on Facebook.
This has been me, through and through. I’ve been clinically depressed.
It’s also a lot of investors and real estate professionals I know – Realtors, mortgage brokers, contractors. I’ve used personal savings and sometimes credit cards to fund my business and my investing. I’ve stayed up nights wondering where the next pay cheque is coming from or if the tenants I don’t like have finally trashed the place. I’ve dreaded RTDRS hearings and difficult listing presentations. I’ve been through depression, therapists and the darkest of days. Real Estate is home to one of the highest divorce rates of any profession and I suspect the attrition rate of agents and investors will rival that of venture-backed startups.
There’s a couple things that help keep me on an even keel today:
- Knowing that I’m not in control. God is in control and I’m following his plan. He’s first, my vocation (my family) is second and I’m third. Serving God means respecting myself, my family, my clients and all of His creation.
- Taking mental health seriously. I’ve had a great psychologist in the past and I’m not afraid of seeking professional help in the future. Spiritual direction, a mens’ prayer group, confession and having a wife who is a social worker are all ways I actively examine my emotional bank account. We talk about mental health at home and with my family at least weekly.
- Staying conscious of what I’m eating, how much exercise I’m doing and how much me time I’m getting. This morning, like many mornings, I’m at a restaurant having a light breakfast and taking an hour to write. Sure, as a Commercial Realtor I could go work at one of the major firms but I’ve yet to be convinced that it wouldn’t drive me insane. I know that I need the flexibility to be creative and drive my business forward.
- Using systems and groups of like minded, supportive individuals. Places/people like RE/MAX, REIN, #krix, the prayer group Mike and I attend, my Church and my family are just a couple of these.
- Being honest about myself to myself. I have a couple groups of friends who get together and I know I can call when I’m down. From random ideas to my actual financials – it’s all out on the table. I’m not interested in being prideful and putting up a successful front. My priorities are in #1 above – being the biggest and best in other people’s eyes just isn’t a consideration.
Business is tough and by admitting when it’s tough we make ourselves stronger, not weaker.
We’re just into 2014. Calgary’s rocking out. Edmonton’s starting to heat up and I ran into three multiple offers in four days last week. People are bringing rents up by $100-200/month. Does it start to feel like 2004-2007 again? A little bit.
We’re a cyclical economy with a cyclical real estate market.
It doesn’t matter if we’re in a hot market or things have flatlined. There’s always ways to make money in real estate, but there’s a couple things that will help save you in the future if you buy smarter now.
- This is no time to skip due diligence. I dusted off REIN’s Property Goldmine Scorecard for some clients last month. Make sure you understand where you’re buying, what you’re doing and the fundamentals that drive the market. Learn about the property, the tenants, do inspections and searches, and always consult experts.
- Understand the difference between making a rational decision which may challenge your fears with making a foolhardy decision based on emotion where you overpay for a property. The former could involve buying a more expensive property than you ever have, but one that is supported by the income and quality of the property. The latter is often driven by the fear of missing out.
- When all else fails, buy quality and buy slowly. I know several investors who are bankrupt, the subject of lawsuits or are in jail. One of the unifying themes is that they grew far too fast and they bought stuff that was a good deal, rather than buying quality properties. When the market went sideways their values fell faster, the vacancies stacked up and the not-so-great financing fell apart. I bought a townhouse at the peak of the market in 2008, but it was a great unit in a decent complex with incredible tenants. Even with a $30,000 special assessment I’m still positive cash-flow and I’ve survived the dip. I credit that success to quality property, great tenants and great management.
This is the time to make careful acquisitions so you’re well positioned to ride the wave that’s coming.
Really, there’s only three things to do when you get hacked.
- Fix it.
- Apologize to your readers.
- Make sure it doesn’t happen again.
What people saw when they got the post emailed to them was this (thanks to Sharon for catching it and letting me know).
Now I’ve taken a bunch of time to clean it, secure this and several of my other sites and I’ve started using SiteLock to help prevent this from happening agin. If you’re having trouble reading or commenting, let me know. For the moment we’re praying we’ve got this locked down and that Google continues to not worry. Traffic is still steady.
It’s easy to fall into a lull where you don’t look at your websites and take the time to review their security.