I was recently asked a few questions to help some gain a greater insight into my life in real estate. Below are the questions and answers, and I hope that you are able to gain some successful pointers from it!
1. Can you tell our readers a little about yourself and how you got where you are today?
In 1974, I entered into a little known government sponsored oil and gas lease lottery with money borrowed from my Dad. I won an oil and gas lease in Campbell County, Wyoming and then sold it to a major oil company. I 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…and then some. Real estate was my life. I graduated and went to work as a real estate broker to get 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 they are at market value. Don’t do anything else until you are at about 5 times the inventory you were personally carrying in 2005/6.
3. Is it really possible to be UP in a down market? How so?
“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, too, has had a 20% devaluation. 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?
Beginner question: “I have very little money and want to get started in this business fast.” Experienced question: “I have really experienced a slowdown and can’t seem to get started.”
Same answer for both — Do the research on the expireds EVERY MORNING. Call them, write them, and visit them. Be fun and aggressive. That is what they are looking for. Yeah, yeah, yeah, you say. Well, do you call them twice? Do you get the hard to find phone numbers? Do you send them multiple mailings in firecracker mailing tubes and start the letter by saying, “BANG YOUR LISTING IS DEAD”? Do you call on late Saturday morning to catch them at home? Are you in the office on January 1 when the expired inventory goes up by 20 times? I have over 50 wild 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 are fast, cheap and fun activities. Once I had the major market share in expireds, I created a system and manuals for what I had done then moved on to another major seller demographic. When I got too busy and made enough money, I hired someone to run my manuals.
5. Do you have a prediction about the residential real estate market for 2009?
DOWN IN PRICE WITH SOME AREA EXCEPTIONS
Please, stop the over-optimistic stuff. Your broker’s job is to get you out of bed, your state association’s job is to disseminate positive information that hopefully gets picked up by the press, and my job is to give you a reality check. Putting more down, having higher credit ratings, and having no guaranteed appreciation. Quit waiting for the market to change. You, the agent needs to change. See #2. Stop wasting time listening to what others think the market will do. Just do number 2 above. 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 of the first six years of this century made poor agents look great. They are either speakers, managers, or selling cars now. Training is heavy on technology with no systems attached. Agents are actually attending seminars on Chinese mysticism, staging (a minor service in the best of times), blogging, leadership, and just about everything else. What is lacking is training on how to effectively achieve a seller’s goals and make a net profit on a consistent basis. Then take those profits and 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?
Unusual approaches to the best demographics in real estate.