Every fall I have to renew my real estate associate’s license with the Real Estate Council of Alberta. It’s a funny coincidence that it’s the same time of year when I made the move from doing full-time SEO for Enquiro/Mediative to doing full time real estate. Now I’m two years into being fully licensed and busy as can be. I’m happy that I’ve got Brent (aka Dad) as a partner and we’re well on our way towards the goal of being Edmonton’s #1 Multi-Family REALTORS®. We’ve got a part time accountant on staff and recently brought aboard another part-time virtual assistant from the Phillipines named Judd.
Things seem to be ticking along like clockwork and that’s usually a good time to step back and think about things.
- Everyone’s a marketer. Seth Godin was right, we’re all marketers now. As a real estate agent or as a professional investor, it’s all marketing. Along those lines you’ve also gotta realize that it’s hard to market crap. Do a good job on a few projects, rather than try to chase thousands. Don Campbell gave a great talk at REIN’s Capital Raising Conference about ‘building your list’. His crucial point was that your list should only be 2-3 people – the right people. That leads me to my next profound thought.
- It’s all list building. Networking, finding JV partners, choosing contractors, vacation planning – whatever you’re on about, you’ve gotta keep track of who you’re meeting. Social media has been great for that since it’s easy to add people to Facebook, LinkedIn or Twitter. There’s also some great software out there for keeping track of people and your business such as HighRise from 37 Signals. Even if you’re just rocking the rolodex, make sure you’re keeping track of people so you can remember them. Two things I learned just this year are tiny little tips. First, from James Knull, when you’re at a conference or trade show and people are giving you their cards, turn it over and on the back write what their biggest need is and their most recognizable physical characteristic is. The second is from my own office and is head-smackingly simple. We get a printout every week of all the messages we’ve had paged out to us, such as when a buyer calls the number on our signs. I went an awfully long time just throwing them out and discarding buyers who I though weren’t interested. Each phone call costs money to get – money for signs, listings and ads. Each contact should be carefully screened and evaluated before you decide to keep them or toss them.
- Fire more people. Now that you’ve gotten the list-building part of things down-pat, it’s time to fire people! I’m a big believer of the 80/20 rule; 80% of your business comes from 20% of the people. Few things in our business made our lives simpler and more profitable than deciding that we’re not going to chase people, jump and run for prospective clients, nor drive all over the place for meetings without commitment on both parts. I know of at least one deal which I missed out on double ending because I wouldn’t meet a caller at 7pm when she called at 4:30pm. That’s just fine. We choose the people we work with and Brent and I are not afraid to say when we don’t think we’re the right match. We recently printed out our 1100-person client list with the goal of firing 20-30% of them, together with picking the best 10%. I’m a believer in Dunbar’s number and every time we bump into it we’ll find a way to grow or shrink to ensure the quality of our relationships.
- People loose money. I’ve had to tell three people they’re going to loose $20,000-50,000 on real estate if they sell now, or even if they do nothing. And that was just on Monday. We’re about 5-years out from the peak of the market, mortgages are at renewal, JV partnerships are nearing their theoretical maturity dates and there’s still a lot of people who are underwater. Real estate is only a sure bet as far as you have a quality product and the benefit of time. Be very, very careful what you buy. Pick quality and area with break even cashflow over sketchy crap with theoretical huge cashflow.
- Profitability comes slowly. We just met with our accountant last week and for 2012 to the end of August we’re running at a 52% operating expense ratio. I consider that not bad since we’re working very hard to reinvest in systems, grow our multi-family database, listings and focus on the long term. It’s also a bit of a step to share financial metrics like that. I can’t think of another real estate agent or company which does, but I want to be transparent, let people know what’s going on and see how we share in their success or failure. It’s one of the best things I learned from the tough growth times at Enquiro – when we were trying to make tough changes or money was tight Gord would have people put the whole companies financials on whiteboard graphs in our morning huddle area. It’s shocking, inspiring, empowering and encouraging to be trusted with the knowledge, share the load and celebrate the success together.
Here’s to many more very exciting years.
This is a great read Chris
Please keep the posts coming!