1. Can you tell our readers a little about yourself and how you got where you are today?
In 1974, I entered a government-sponsored oil and gas lease lottery with money that I borrowed from my Dad. I won an oil and gas lease in Campbell County, Wyoming. With the help of my dad, I was able to sell that plot to a major oil company. I then used that money to buy apartment buildings, building my portfolio as I attended college. By 1979, I had a large portfolio built on leverage and average investing tools. At 22% interest back then, I could not survive and lost everything…then some. Real estate was my life. I graduated from college and immediately went to work as a real estate broker to get financially healthy again. I designed systems coupled with leverage to create massive production with low overhead. I became addicted to the thrill of "no limits" real estate.
2. What is the single most important piece of advice you can pass along to real estate professionals?
Run your business to develop and manage leads on the inventory side of the business. Translation: everything you do should be about obtaining a listing, then making sure that listing is at market value. Don't do anything else until you are at about 5x the inventory you were personally carrying in 2005/6.
3. Is it really possible to be UP in a down market? How so?
Here’s how I would explain it to a seller: "Well, Mr. Johnson, I understand your need to sell your home for more money, but unfortunately your neighbors and the banks have created comparables that affect your value. The good news is that it is to your benefit. You see, we might have to take a 20% reduction on your home that was valued at $300,000 in 2006. That means we might be netting $60,000 less in price than what you had expected. However, you want a home that was valued at $500,000 in 2006. That home has also had a 20% devaluation, and that is $100,000 in reduced value! Can you see that you really get the home you want for a net savings of $40,000? Please sign here so that we can get started."
4. What is the most common question you are asked and how is it answered?
Most common for a beginner agent: "I have very little money. How can I get started quickly in this business?”
Most common for an experienced agent: "I have really experienced a slowdown. What can I do to get started?"
Same answer for both though -- do the research on the expireds EVERY MORNING. Call them, write them, and visit them. Be fun and be aggressive. That is what they are looking for. Here’s what I mean – call them twice. Research the hard-to-find phone numbers. Send multiple mailings the firecracker mailing tubes with clever letters like “Bang! Your Listing Is Dead!” Call on late Saturday morning to catch them at home. Be in the office on January 1st when the expired inventory is up by 20x the norm. I have over 50 “wild and crazy” things that I did to attract the seller who thinks their home did not sell because of an average effort by an average agent. These ideas are fast, cheap, and fun. Once I had the major market share in expireds, I would create manuals detailing the processes for what I had done, then move on to another major seller demographic. When I get too busy and made enough money, I hire someone to run my business from the manuals.
5. Do you have a prediction about the residential real estate market for 2009/2010?
DOWN IN PRICE WITH SOME AREA EXCEPTIONS
Please stop the over optimistic stuff. Your broker's job is to get you out of bed in the morning! Your state association's job is to disseminate positive information that hopefully gets picked up by the press. My job is to give you a reality check. Have your clients put more money down, and banks are asking for buyers and sellers with higher credit ratings. There is no guaranteed appreciation. Quit waiting for the market to change; the agents need to change. See item number two. Stop wasting time listening to what others think the market will do. Just do the stuff in item number two. All of my coaching clients are making more money this year than in 2005 or 2006. We just moved their listing inventory up to the point where they had more buyers, more showings, and more cooperative contracts.
6. What do you consider to be the greatest challenge a real estate professional or the market as a whole is facing today and do you have any recommendations on how it is overcome?
The great market during the first six years of this century made poor agents look great. Now, those agents are speakers, managers, or selling cars. Their training is often heavy on technology with no systems attached. Agents are actually attending seminars on feng shui, staging (a minor service in the best of times), journaling, leadership, and just about everything else. Training is lacking on how to effectively achieve a seller's goals, make a net profit on a consistent basis, and take those profits to buy cash flow, long-term real estate.
7. What’s one business secret you know that no one else does?
Great business systems, effectively time-blocked will beat hard, unfocused work every time.
8. Is there a secret or a primarily factor to which you attribute your success?
I use unusual approaches to the best demographics in real estate.
