Today on the Listing Agent Lifestyle podcast, we're talking with Robert Jellesed from Medford, Oregon, which is about as far away from Winter Haven, Florida as you can get, and still be in the United States!
This is a really interesting conversation because one of the things that's unique about Robert is he's applying our Getting Listings program to the commercial investment property market. He's very thoughtful, analytic, and has a lot of great experience in analyzing investments that gives him a lot of knowledge to share with his audience.
He's done a lot of research on his target audience in selecting and finding the 7,000 homes, or property owners who own all of the multifamily properties in his part of Oregon, so we had a great conversation about the adaptability of all the principles, the chassis, of our Getting Listings program, and applying it to multifamily homes.
He's going to be able to really make great things happen in this market, and if you're interested in the psychology of how the program works, we get into a lot of the details here in this conversation.
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Transcript: Listing Agent Lifestyle Ep106
Dean: Hello, Robert.
Robert: Hi, good morning.
Dean: Hey, how are you?
Robert: I'm good. Good. It's 7:30 here on the West Coast.
Dean: Oh, my goodness. Well, listen how do you say your last name?
Robert: It's pronounced Jellesed.
Dean: Jellesed, just like it's spelled. Okay. Well, thank you for getting up early. This is very exciting. Where are you?
Robert: Well, I live in a place called Rocky Point, Oregon which is between Medford, Oregon and Klamath Falls, Oregon. I work in the Medford metropolitan area.
Dean: Perfect. We got the whole hour to brainstorm and to talk and figure out what the best things for us would be. I'd love to hear the Robert Jellesed story so far and see what you're hoping we can work on.
Robert: Well, I learned about your software through a close friend and mentor of mine. Her name is Renee Nelson. She and I are kind of kindred spirits as well as her husband, Bob Nelson. I spent many years in corporate industry, in management of sales teams, sales operations for a very large window and door company and who we worked on mergers and acquisitions and the simulating growth by acquisition and all that stuff. I'm a very focused on the analytics and the profit on commercial real estate and the ability to determine whether or not that specific kind of real estate is going to meet the investor's expectations of revenue.
Two and a half years ago, we had some inheritance that my wife and I had. We decided to invest in Triple Nets only because we didn't want to have an active investment. We wanted more of a passive and as our first foray into the world of commercial investing. That's where I've met Bob and Renee. They were our initial entry point or gateway into that investment. I did my usual thing of analyzing all the profits and liabilities and all that stuff of variant types of commercial investments.
They were pretty surprised about my experience and abilities to analyze all the different variables that go into a profitable purchase and the assumptions and all that stuff. They talked me into getting my commercial brokerage license. I had retired probably for the fourth time. I worked with several software companies. I worked in implementation of large corporate-wide software projects. I was about done with all the traveling. I was traveling every week. I also volunteered to the small business development center helping entrepreneurs get started thinking about how they're going to monetize their ideas and all that stuff.
I decided to do something on my own. I got my real estate license and started focusing on residential. I joined a brokerage that was focused on residential. The problem with residential, in my opinion, is there's too much emotion in the decision. I wasn't good at open houses. I wasn't good at open houses. I didn't have a good cookie recipe. I couldn't tell somebody whether those curtains went good with that wallpaper. I barely got all of my stocks right.
I went into the commercial side because the commercial side is really analytical. Sales situations are already emotional no matter what people say. You can't segregate out the emotional side of a purchase decision, but you can overcome some of the some of those things by showing them the profitability or the potential profitability.
Dean: That was very interesting. I have a little sidebar there because there's something that you're saying that is completely relevant here that I remember thinking. I go to Peter Diamandis every year. He wrote the book Abundance. He's got a conference every year called Abundance 360. He's doing it for 25 years. This was the seventh year, this year of the seventh of 25. I remember going to the second one that they were talking about all the disruption coming in the real-estate industry.
At that moment, what you said about emotional things, that's what really struck me as the thing that was going to save the real estate industry from disruption is that you can't digitize the last hundred feet of a real estate transaction that it's always going to be a negotiation, emotionally charged negotiation between two completely irrational people about the market value of the only property like this one in the world today.
Then, a couple of years later open door came into the scene, and the buyer. What I saw in that was what they had brilliantly done was they had taken the irrationality out of one side of a transaction at a time that they were a rational buyer. You're talking about emotional. They're not buying emotionally. They're buying on algorithm with venture-funded money. It's somebody analyzing an algorithm and choosing to buy or not buy with someone else's money. That's about as distant and unattached without even going to look at the house. That's what I mean.
They're not going to fall in love with it or get into an emotional bidding war or get their ego involved in it. They're buying it as a completely rational buyer. Then, when they put it on the market, they're a completely rational seller. I think what you're saying about the commercial side it's much more rational than the residential side for sure, and especially when I triple net, I mean just so for people may not know what triple net is buying properties that you're literally just getting the money, you don't have any responsibility for the property, typically got friends that have bought and made a lot of money over the years by Kentucky Fried Chicken sites essentially buy the land, and Kentucky Fried Chicken leases the land and is responsible for the building and everything on the property. You really just get a check with a reasonable cap rate.
Robert: Yeah. It's a simpler way to look at things. If you want to more consistent, maybe not a really high income, but a consistent income over time, that's the kind of thing that you pursue. There are other obviously riskier investments, but that is a pretty simple one to understand and get into. Coming back to Go Go Agent, why I picked that is because I developed a really strong process to determine whether a duplex, a triplex, or a quad is profitable as an income-producing source to owner. Are your rents depressed? Is your deferred maintenance too high? Are you building all those different factors? I would say of now that I've been in it a year and a half, I've talked to probably 60 or 70 multifamily owners.
At that level of property, they don't really understand that they're not making very much money. I'm not sure why they're in the business unless they have a way to be profitable. Are your rents depressed? In Oregon, we just passed a rent control law that has some various false or not misleading, but you have to understand the law in order to understand what you can and can't do with rents and other things like that.
What I like to do and is not necessarily use the agent tools to the transact business, but to build a reputation of solving problems because I think in real estate, all we're trying really trying to do is solve problems and especially at commercial real estate. What is the problem you want to solve today? Why is that an important problem for you to solve? Maybe, you don't even know what that problem is, but you do know that you're writing a check every month or every year that is over the amount of money that income producing investment's providing you. Why does that happen?
Specific kind of a decision tree, you go down and try to analyze where the issues are in that investment, and how do you rectify that or start turning that around to make that a more productive investment or if you can't do that, then go to another type of investment and come into it in a better sense of knowledge and expectation.
Dean: I like it. How are you turning that into something to focus on your business here?
Robert: Well, I don't want to be in competition. I want to separate myself out from all the competition. In my small world here in Southern Oregon, there's not a lot of people who advertise themselves as a problem solver in the real estate business. What I've developed as a message stream or a marketing concept that goes with just a 5x8 postcard asking the question is your duplex, triplex, or quad meeting your expectations of income.
If they aren't, let's sit down and talk about it and figure out how to do that what the alternatives are or why they aren't. Be like a diagnosis. You have a patient. They have these symptoms. You're sitting there listening to how they talk. You ask them questions. You develop a recommendation on how to get out of the situation they're in. That's what I do. Then, eventually, if they like me, they trust me, they find my information valuable, if they choose to sell, maybe I'll get a consideration for helping them on that transaction, but if they don't choose to sell, at least I've developed a relationship there.
Dean: Yeah. That's great. All of that that you're talking about is a really great, what I call, like a lead conversion strategy in that you've got a way to nurture those kind of relationships like when you look at it, the thing that you have going for you is that you have visible prospects meaning that there are a limited fixed number of people who own multi-unit multifamily properties in Southern Oregon. You can build a list of the people who own all the multifamily properties and how many would that be? How many are there? Would you-
Robert: 7000.
Dean: You've got it already. Okay. We already got the list.
Robert: I've sliced the numbers in different ways to develop groups of people with specific tendencies.
Dean: I like it. What sort of slicing have you done with these in terms of how you can look at the group categorize?
Robert: A lot of it's equity. In other words, how much equity they have in their property and understanding that that equity is not necessarily... I mean a large amount of equity in a property isn't necessarily beneficial. They may brag that they own it free and clear, but in reality, they're seriously undermining their financial strategy. Spending people's money to make money.
Dean: Right, especially when the income of the property is carrying itself. You have the leverage of that. A lot of times, people, they've owned it for years and haven't really looked at how much the equity has crept up. That's a good idea. You look like the people. There's one healthy group there. How big is that group with are you saying like people who have what level would you say is too much equity? Are you talking about people that have it? 50% or more equity or-
Robert: I would say 30 to 35% more or more in equity because if they had 70%, they could split that equity. You get to leverage it themselves for another duplex and still get a cash stream. If you've done analysis several times and their income goes up about 25%, they're not after their net operating income.
Dean: This is a healthy thing that how many people would that be if you've gone down that list there? By the way, congratulations on really getting all of this together. I mean that level of knowledge about your audience is impressive.
Robert: Well, I've been trained that way. I didn't come through my corporate stuff. I've made a lot of other people rich. I'd like to make my own self rich now.
Dean: That's good. Yeah.
Robert: Yeah. I work for a lot of other people. I'm not buying all the tools that I've come to understand. I used to work in data warehousing. I managed an IT group and digital marketing for a large company and all those things. You talked about drip campaigns and personas and narratives and how to go landing pages and how to attract some of your landing page. Then, what conversion events will be for that kind of engagement? All that stuff, I've developed over the years and incorporate that in my whole process strategy.
Dean: That's so great. How many people of the 7000 would be in that situation where they've got the excess equity?
Robert: Probably about 5 to 7% and have a desire to understand. You can tell somebody that they have too much equity in the property. They won't understand that. There's a group of people that will understand it and will want to take action on that. That's 5 to 7%.
Dean: Then, it becomes a way to educate them about that too. We're talking about only 350 or 500 people. That's a healthy list. What would be the value of the properties that they have like minimum or medium value of those properties?
Robert: Anywhere from 200,000 to 400,000. That, you really have to understand that the value of the property isn't the assessed value. It isn't even the values that they paid for it. The value of that properties, the rents that they accrue by people living there.
Dean: That's right.
Robert: That's all the value that property has. That's all the value that property has is the income it creates for the owner. It has, to me, no other value.
Dean: Yes. Perfect. What's another category that you've identified among the 7000?
Robert: People who-
Dean: Who do you think is the most lucrative categories, the biggest win?
Robert: The one I just described because those are people. Right. Those are the people who the light double light bulb comes on. They say themselves, "Wow. I didn't look at it that way this little epiphany happens." They say, "Okay. Let's get started." I say, "Well, hold on. Hold on. We want to really model what you're doing today so that when we compare alternatives, we have a strong bar to measure by." We go through this complete financial audit of their properties, where their rents are, what their income is, what their expenses are, what their property management expenses are. Your complete autopsy of that because anything you do next needs to be better than that. If you don't know where you're at, you won't know when you get somewhere else.
Dean: Right. Yeah. Wow.
Robert: Go ahead.
Dean: Out of those 300 to 500 people there, do many of them own multiple properties or are they one-offs?
Robert: Yes. Those are my high priorities. The one-offs are good, but they're naïve and it's their first rodeo. Multifamily have multiple units in different locations. They usually are just probably overwhelmed because their property manager's buffering them from their assets. All they are seeing is the check from the property manager or they're getting a request for funds from property manager. They're not engaged in how active that asset is really working for them.
Dean: Right. Got it. That's interesting. We did a reverse mortgage campaign that was two people who had equity in their single-family homes that were over 62. I idea we had on the postcard was a real picture of a guy in his garden, and the headline was Wakulla, which is one of the towns here in Florida, Wakulla retiree finds $152,000 nest egg buried in the backyard. We talked about the thing in those residential terms that having equity in your home is like taking money and burying a hole in the backyard and putting it there because the property is going to go up or down regardless of whether it's financed or unfinanced.
At the time when they can access that money with no payment to continue living in the house, it could be a big transformation, but I thought that same kind of messaging is almost the same applicable here. What's the town again that you're in?
Robert: Medford, Oregon.
Dean: Medford.
Robert: It's about 120,000 people.
Dean: Yeah. Medford landlord finds $100,000 nest egg buried in apartment complex.
Robert: Well, yeah. It's the same principle and-
Dean: Is the same principle. Yeah. That's what you're trying to say, is you've got untapped equity that could be doing more. A lot of these frames like there's a situation where there's a sort of an elegant way to bring someone's attention to something that they could be doing without the approach of telling them that they should be doing something. I'll give you an example. A few years ago, when interest rates were declining and they kept declining and declining, everybody was screaming, "Refinance now. Rates have never been lower." Then next week, we mean it this time rates have never been lower. Refinance now before rates go up. Everybody's screaming that or rates just hit below 3%.
But the rate on its own doesn't let people know what it means if they refinance. We had this thought that the conversation that's going on in people's mind is really what we're trying to tap into here. The conversation among most people is that they don't understand what the interest rate means and how that would affect their actual situation. We did a report called How To Know When It Makes Sense To Refinance which is really what clears up. That's where people are is meet them where they are.
I think that same approach may be something that would be applicable here is how to know when it makes sense to turn your investment property into a second investment property.
Robert: That's exactly right. That's exactly right because what they seem to think that they stop, they need to stop right there without one investment. They don't understand by building the equity, it gets them an opportunity to go into another investment and increase their return.
Dean: It's an interesting thing where you're not trying to move them from their position. You're not trying to pull them across to you should buy another property or you could buy another property. When you're presenting somebody with neutral information for their consideration, you're saying to someone, "Here's some information." There's no harm in reading something or ask you for something that is going to come from a neutral point of view. That's what people really want to know is the sort of objective data back information that's going to let them come to their own conclusion about it rather than any sort of subjective sort of convincing that you're trying to do.
Robert: Well, if someone wants to sell their duplex, how do they know what to sell it for? I give them a specific way to define how to sell it for. You can do comps obviously. The comps are not always an indication of value. They're indication of what the market is capable of, but if you really want to know what your individual duplex is worth, then you start approaching it from a completely different point of view.
Dean: Then, it goes from what could you do. Yeah, because there's a thing where it's literally an opportunity where if you did this to add value that's increased the rent so that the income is more the value's going to be relative to the income.
Robert: Exactly. That's not residential. That's commercial.
Dean: Right. That's exactly right. That's not always the case, that's right, with the residential because somebody has to appreciate the things that you've done, but if you do something that can increase your rents by 20%, that's a big-
Robert: Or decrease your cost. You can either increase rents or you can decrease costs. Now, if you decrease cost, there could be some unfortunate or unexpected outcomes there. The best thing to do is try to keep your rents at market rates.
Dean: What are some of the biggest cost things that you have seen could make the biggest delta.
Robert: Well, not controlling the property manager's budgets and making very clear and specific workflows. In other words, if a property manager comes to you and says, "We need to replace the water heaters in these three units." It's going to cost X amount of money because the tenants are complaining that their hot water isn't there enough. Well, first of all, how do you know it's a hot water heater? How do you know if somebody didn't turn the temperature down?
I mean you just don't assume that the property managers, they're large, sometimes, they don't get into those things. They're supposed to walk through every three months and take a look at stuff. You want to know what their checklist is. You want to know did they actually go through and follow the checklist. If they did, do they have that documented and can I pull up past checklists that were completed? Just do your due diligence with the property manager because they are an interface to your tenants. They're the people who spend your money. You have to let them think that your money is their money and they're not going to spend any more than you have to.
You don't want to be mean or cruel or insensitive. You want people to have a great living experience in your properties, but you also don't want to just spend money without making sure that it's being spent for the right reasons. That's all.
Dean: Is there a word or phrase that would describe a fully optimized property like that?
Robert: Well, I think it's a maturity process every good property management company knows that drill. When you take a property management company to represent you to your tenants, you just don't want to go through the yellow pages and pick the first one you see. You want to interview some of the other clients that that property manager company has and see what the pros and cons are of that individual.
Then, also do an annual review with them to see how they performed to what they said they were going to perform.
Dean: Right. I see.
Robert: That's one way of controlling costs.
Dean: Yes. I got it.
Robert: I sometimes get carried away there but-
Dean: No. It's fun. I'm an analyst myself. I love thinking through, but what I like to do is I like to see those analysis hot points and then figure out how to present them in a way that creates the interest. I look at it. You've got those 7000 people. It seems like the low-hanging fruit is focusing attention on those 7000 people or some segments of them if you lay them out. Off those 7000, how many of them would own two or more properties and live out of state. That would probably be another potential division of it.
Robert: Actually, I have those numbers. I have that, but I haven't exploited that or decided about how to approach that because I just haven't gotten there yet.
Dean: Got you.
Robert: I have those names. Yeah.
Dean: Do you do property management too or do you just do-
Robert: No. I'm too old for that stuff. I told you. I'm too lazy. That's a tough job.
Dean: There you go, so as the guy who chose triple net leases as an investment. Good for you. That makes sense. That makes sense.
Robert: I'm an armchair quarterback.
Dean: I like it. Yeah. An idea guy. Yeah. So, to help people maximize their properties. I like that, but even among those 500 people that you're talking about, that alone is if you just got to the right people with the right message, there's a lot of potential there.
Robert: Right. There's also a lot of-
Dean: They may be able to turn that into sell, sell the triplex and roll it into a larger property or refinance and get another, another triplex.
Robert: Yeah. Right. A lot of these too when I say 7000, a lot of these are owned by LLC's and if it's in Oregon, if you have an LLC, you don't have the specific decision maker or the mortgage signatory or those individual names. You have to go one step beyond that. Sometimes, in the 7000, you might have three people who actually are partners in a duplex group. You also have to ferret out those people and decide which one of those you're going to message to or are you going to message to all three of them. There's a lot of work, heavy lifting, to be done to scrape the right individuals out to be able to message to on those who. Otherwise, you can spend a lot of money in mailers that will not be opened or read or just go right into the recycle bin.
Dean: You're right. Exactly. One of the things we've been using is postcards as a way typically wherever the LLC, we find even on residential side. We have a real estate agent in South Beach that does oceanfront condos and a lot of those are owned in LLC's. We mailed a postcard to the tax address not to the property but wherever the tax address is going. It was surprising to see the number of responses that came from invisible prospects basically because you know the LLC, but you don't know who the person is, but it was surprising to see who was responding.
Of course, when they would respond with their name how we would Google and you'd see people that are visible real business owners, big business owners and people that are one that was an ambassador to a foreign country. It's interesting that things get to people at the right timing especially you're talking about a triplex. There's probably not layers of a family office or something that something's going through where people are shielded from it most of the time if you're talking about a multi-family like triplex or something like that. That is good business sense to own something in LLC and not as identity.
Robert: Exactly. Many LLCs, like you said, they have multiple owners that are partners. You have active partners, and you have silent partners. You have to figure out try to make it in your best efforts to figure out who those are and how to message to them.
Dean: I get the idea right now. What's your big desire here? What is this thing that if we could solve it would help you the most?
Robert: Scalability I think is the hardest thing because I work for a brokerage but, unfortunately, I'm my own data person, my own graphics artist, my own internet HTML programmer. I do all my own stuff together, and I do it really well. I have a hard time delegating into task to different people. I also have a hard time because I like to do all those different things but not all those things are going to get me where I want to be.
Dean: Well, here's the thing about adaptability. We talked about the Listing Agent Lifestyle, the lifestyle elements of daily joy, abundant time, and financial peace. In the abundant times category here, where we're talking about one of the surest things especially for a guy like you is to recognize and appreciate the difference between things that only you can do and things that somebody else could do.
Where I learned this several years ago was really like a profound shift for me. Wyatt Woodsmall who's a friend and one of the founding fathers of NLP, neuro-linguistic programming, talked about the idea of the two types of challenges that we face. There are adaptive challenges where nobody knows what needs to be done yet. You need to go out and figure something out where you're using your creativity and figuring out a solution problem-solving like you're describing.
Then, there are technical challenges where the answer is known, and you just need to know what to do that when you've taken something from adaptive challenge, and you've turned it into a technical challenge, meaning you've already solved the problem, you know what to do and somebody else if instructed could do what you're talking about, then, that should be being done by other people. Where you want to maximize is keeping yourself above the line of doing and working on and thinking about only the things that only you could think about.
Every time you're doing something that somebody else could do, you're robbing from the time that is your unique magic. It comes down to documenting the things that you have figured out, as soon as you can, into a way that somebody could come to support you in that. That becomes the scalable.
Robert: Yeah. I guess when I worked in corporate America, I give you your access to resources like that. As an entrepreneur or sole proprietor, it's more difficult to find those kinds of qualities because you're literally writing the check yourself. It's not coming from a department and the corporation.
Dean: The discipline that you have to have is that because our natural tendency is this, we're going to default to doing the thing that we like to do, more analysis, more ideas, more and deeper thought about something. But where the discipline has to come in is that you have to pitch that to an economic engine that drives the revenue to keep it going. You have to exercise the discipline to not continue to solve new problems until you get the problem that you've solved driving its own economic engine.
If I'm to translate that, I think that if you have figured out this situation with the triplex owners with excess equity, that that is a viable real market that could drive an economic engine of that. Now, rather than trying to spend time analyzing or figuring out other potential things, it makes sense to take that one all the way to where it's now creating revenue. Then, on the back of that revenue driving, replacing yourself in that one to take it to the next level and go on to the next one. It definitely requires a discipline of that.
Robert: I think you're exactly right. That's a really good way to look at that.
Dean: I've observed it so much. It's just you're commercial real estate, but where I see it is realtors thinking, ,"Well I can do this, and I can do this and this target market," but focusing on one, getting things going is the thing that will drive the revenue.
Robert: Well, the other thing top which I have to be careful of is I'm kind of a shy person most of the time. I like to do things that I feel very at ease with such as numbers, Excel spreadsheets, and all those other things. None of those things produce any income. What produces income is when I'm face to face with a client and sharing with them, doing the problem-solving analysis. That kind of thing is what I need to do. But a lot of times, I'm shy and just reserved.
Dean: Yeah. Well, I think that here's the thing is I would recommend like even is going to what's going to be the baseline thing of this like if you were to take triplexes or if you were to say I'm sure you've got these properties divided into three to six units, six or more or among the 7000. One of the valuable things, how I would approach it initially is take the approach like we do with the getting listings program on the residential side and do a postcard to the appropriate number of those 7000 that offers the A1 or the February 2020 report on Medford triplex prices.
That would be a valuable thing for people to see data, market data of properties that are being sold or set those benchmarks for people because all you want is a list property. You want help people sell properties, and you want them to buy additional properties. That's essentially what you're doing. You're not looking to get into the management business.
Robert: No. Right. That's the goal and to be a trusted advisor to actually educate them, what I like to do is educate them not just tell them what the numbers are but show them how to calculate them themselves because I think that becomes a better partnership and also streamlines the relationship. They need someone to broker their deal. I'd be happy to do that, but I like them to be able to come to me to say, "I found this really good opportunity. Take a look at it and let me know your thoughts." That would be another level of that relationship.
Dean: Do you have a category for triple net these as well?
Robert: Yup. I've got a little database on those. Obviously, there aren't as many. There's probably a maybe a quarter or an eighth of the total is that, and it gets smaller. It's quads and even smaller with five-plexes or more. They dropped pretty rapidly. The reason I picked duplexes was because a small number of our large number is still a large number.
Dean: They're all residential properties. You don't do plazas or-
Robert: Actually, I do, do those. But that's a completely different approach because in that case, it's much easier actually to find the revenue stream and all that and valuation. That's easier. But I haven't really marketed those. Actually, the leads I get on those subjects are actually leads from people who own multifamily for the retired and multi-family and they want to move into commercial, more traditional commercial. It has side effect in that respect.
Dean: Yeah. Well, I mean it seems like this is the thing that I would look at is setting up the same model that we use of getting in front of people who own three to six units or even if you take the ones with the excess equity. You certainly include those in there. But, well, let me ask you. What kind of marketing budget do you have, or would you be willing to spend or are you trying to bootstrap it?
Robert: I don't want a bootstrap because all you're doing is, you're wasting your money when you try to bootstrap. You have to spend the right amount of money to get the job done. If you try to cut corners, you're ending up undermining your entire marketing campaign a lot of times.
Dean: Like an easy approach to do it. Yeah. Rational approach where you're going to say this is what the expected ROI. Let's take a thousand of these, and let's say that you pick and would take the residential approach to this the same way that we do, what would be the turnover rate among multifamily properties like that? Do they tend to hold them longer or less time than traditional residential?
Robert: I don't have an answer for that. I don't know.
Dean: Well, one of the things that would be helpful is to know the market data. Relative to the 7000 properties, how many of them turned over in the last 12 months?
Robert: Right. I have that. I have that, but I don't have average time of ownership. I don't have that.
Dean: It doesn't really matter. We can reverse into it. If there were 7000 and then how many sold last year.
Robert: Right. I actually put together my report. I put together as a property analysis report talks about those things, days on market, consecutive days on market.
Dean: Were there more than 350 properties that got traded?
Robert: I would say there's probably about 450 properties somewhere in that area.
Dean: Is that at six or 7% turnover rate?
Robert: Right. Yeah.
Dean: If you look at that and the median value would probably be in the 300,000?
Robert: 300,000.
Dean: Looking at a median value of 300,000, what would be the check that would provide for you? What would that generate for you if you sold one transaction for that?
Robert: Well, about 3.5%. Actually, my cut would be about 2.7%, so 300,000 times 2.7 is about $8800.
Dean: 8000. Yeah. $9000. Okay. If we take this that if we look at a thousand of these properties, this is kind of like, I call it inevitability kind of analysis here, but there's a thousand units. There's going to be somewhere around 60, let's call it, sales in that amount. No. It would be like less than that, if we think a thousand. 6% would be about 60 sales in that area and times your eight or $9000 is about $500,000 dollars roughly is what is going on just the listing side of that is going to be paid from those 1000. That's the way I look at it here.
Now, to mail postcards that's paid 10 times a year in the next 12 months to that group of 1000 homes or 1000 owners, we may be talking about $6000 or let's call is six to $7000. You can go with the large postcards there. That's what we're looking at here is how many leads can we generate among those 1000. The only thing that we really want is to identify which 60 owners are going to be the ones that sell in the next 12 months, right?
Robert: Yeah. Right.
Dean: Any sale is going to be preceded by a thought of, "Well, I wonder what or we can get for the property now." I wonder what it's worth and that sort of market data offer rather than, hey look at me, I'm the top commercial guy or sell your triplex. Those two approaches are not as effective as providing the market data that somebody who's going to be selling their multifamily property would love to have in their analysis and gathering information.
What you get in exchange for that is then you get the opportunity to educate them all about you and to start acting as their advocate from the moment that they respond. Because it's not impulsive. You mentioned yourself that it's not like an impulsive decision on commercial real estate. That's going to be rational, and they're going to be thinking and analyzing whether it makes sense to sell the property or what they could get for it. They're going to start paying attention to the market and having an easy way to get that data is very appreciated by them. They will come respond especially even if it's somebody who's managing the property for them or doing those things.
They're still going to gather this information for people. They just bought a property or they have no intention of selling it, it's just it's been rented, it's full, they've got long term tenants, they're not even giving it a thought that this offer is not going to have any sort of appeal to them. But for the ones that are thinking about selling, they're going to start tuning in to the market and that's going to be your entree into a relationship with it.
Robert: I think you're spot on. Yeah. You've nailed it. Yeah. That's exactly my plan. I just started last month with February property sales analysis in other words.
Dean: Perfect.
Robert: Yeah. I developed an analysis, and I also talked very briefly about the approach you've taken, determine the value of your duplex.
Dean: Yeah. Oh, that's awesome.
Robert: But there's no sales pitch. I mean it's just here's information.
Dean: Right. Then, if I were in this situation, you've got access in Go Agent to the getting listings program, is I would take the chassis of this and I would just adapt it for the right languaging for commercial properties. When people respond in the residential getting listings program, we send them each month a newsletter called get top dollar. It's got tips on preparing their house for sale and about the home selling process along with a cover letter offering them next steps and the market data updated for the last 30 days.
I think taking that chassis, as I mentioned, and taking your information like you've got so much great knowledge about problem solving or tips or things that would help them, what if they are going to sell and you could adapt it that way. I think that this is a good model. That it is going to work out really well for you.
Robert: I agree, and that's why I picked your product. I mean your products really nicely integrated. You have landing page. You have your CRM. You have your texting and voice. You've integrated all the touch points really nicely really well. I've used those now in my first mailer, and I had a couple people enrolled via texting which I was surprised. But most just went to the landing page. Of course, I've got them now in my drip system.
Dean: Exactly.
Robert: Really, that combination I hope others, people if they listen to this podcast, understand that's a rare combination of tools that are so very well integrated. It is a very nice product you have.
Dean: Yeah. I appreciate that. Thank you.
Robert: You could use something like salesforce.com or Act or those other things but those are very expensive platforms and to integrate them and customize them towards the real estate industry would be even more expensive. But what you have is literally an off-the-shelf product.
Dean: Yeah. That's it. I think this is phase one. This is like episode one. I think that we'll end up doing six months and 12 months check in here because I think you're going to execute this, and we'll have some results and it could be a neat thing. You talk about scalability. That could be something that you could take that model. We could take it to other markets.
Robert: I plan on doing that. But I just got to perfect the model first. Then, once I get that done, I'll be able to go.
Dean: That's awesome.
Robert: Well, I've really enjoyed our conversation.
Dean: Me too.
Robert: I really appreciate your insight. Thank you.
Dean: Awesome.
Robert: And very fun.
Dean: Thank you to Renee for connecting us. That's great.
Robert: Yeah. She's a firecracker, let me tell you. She's got a lot going on. She's going to be in Orlando here in the next times, I guess, you guys are having a meeting down there.
Dean: Yup. Of course. Absolutely. Okay. Robert, I really appreciate it, and I can't wait to hear the update, so let's stay connected.
Robert: Okay. Thank you, Dean. Thank you very much.
Dean: Thanks, Robert. Bye-bye.
Robert: All right. Bye-bye.
Dean: There we have it, another great episode. If you'd like to continue the conversation, you can go to ListingAgentLifestyle.com. You can download a copy of the Listing Agent Lifestyle book, the manifesto that shares everything that we're talking about here. You can be a guest on the show if you'd like to talk about how we can build a listing agent lifestyle plan for your business. Just click on the be a guest link at ListingAgentLifestyle.com.
If you'd like to join our community of people who are applying all of the things we talked about in the Listing Agent Lifestyle, come on in a GoGoAgent.com. We got all the programs, all the tools, everything you need to get listings to multiply your listings, to get referrals, convert leads and to find buyers. You can get a free, truly free, no credit card required trial for 30 days at GoGoAgent.com. Come on over, and I will see you there.