Renegade Millionaire Blog

If you have a database, you’ll be happy to know that a certain percentage of prospects in your database are investors. You may not have advertised for investors, but you’ve got them anyhow! Simply by applying the 80/20 rule, we can estimate that 2 out of ever 10 people in your database would be considered an investor. This is actually very good news for you and your business.

Why you might ask?

Because an investor is always an investor. What I mean by this is an investor is ALWAYS interested in good deals. Take a second and think about this…

If you have investors in your database and they’re always interested in good deals, you have the ability to sell property anytime you want. All you have to do is find a great deal and market it to your database. It’s virtually impossible for a “real” investor to walk away from a great deal. I know because I’m one of them. Every time I hear about a great investment opportunity, I automatically start thinking how I can grab it for myself.

There are several ways for you to leverage this finding in your business and it might make sense for you to focus on larger investment properties because you’ll earn a great deal more for your efforts. Compare the commission earned on the sale of a 30 unit apartment building to the commission earned on the sale of a single-family home. Which commission check would you rather have?

The good news is that it might actually be easier to sell a larger investment property to your database than it is to sell a smaller deal. I’ve sold several larger investment properties to my database over-the-phone without a single showing appointment. You can see exactly how to do this yourself in a 12-minute video.  Here it is:

Thomas Stanley, Ph. D. is back at it again with his newly released book “Stop Acting Rich.” His name should be familiar to you because he is the author of “The Millionaire Next Door” and “The Millionaire Mind.”

I loved his first two books and when I saw his new book, I couldn’t resist buying it. The message that permeates each book listed above is that  most people look rich because they live in big homes or drive expensive cars, but when examined closely, they have accumulated very low levels of wealth. In other words, they wear big hats but have no cattle.

For some reason, we seem to measure our success in life by how we compare to others. Is our house bigger than theirs? Is my car nicer than Jim’s down the street? To feel successful, many people fall into the trap of buying things simply to impress others.

A few years ago, I almost made this same mistake myself. My dream was to own a large lakefront home in North Carolina. My wife and I toured numerous homes and finally made an offer on a 8,000-square-foot home in an exclusive residential community. During negotiations my wife shared that she didn’t think she would feel comfortable in the neighborhood. Almost as if we didn’t fit in. As we talked about it more, I realized she was right. Everyone in this community belonged to the country club, drove high-end cars and took exotic vacations. We don’t belong to a country club. Hell, I don’t even golf. I’m too busy working! I drive a 6-year-old car. Nothing exotic about us.

We decided to let this home go and stay put in Cleveland. Turns out it was one of the smartest decisions we’ve ever made because, soon after, the real estate market crashed and the economy took a nosedive.

One of the main lessons Mr. Stanley makes throughout this book is that the amount of wealth you accumulate in your life correlates directly to the size and value of your home. Here’s a very telling quote from the book:

“If you examine homes by value from the lowest to the highest, you would find that as the value of the homes increases, so does the proportion of people who are living well above their means.”

The more expensive your home, the more you’ll be forced to spend on home repairs, maintenance and upkeep. This is hard enough, before you factor in what you’ll have to spend to keep up with your neighbors. If you buy a high-end home, you’ll end up sending your kids to expensive private schools and you’ll be forced to buy them all of the expensive clothes and gadgets the other kids have in the neighborhood.

The reason this happens is because it’s hard to avoid copying what you see every day. You won’t want to look like some schmuck who drives a rusty old car and sends his kids to the public schools in out-of-style clothes from Kmart.

The trick is to live in a nice home in a nice neighborhood that allows you to live below your means. It’s better to be a high earner in an average neighborhood than it is to be a low earner in a high-end neighborhood. Remember the old saying about “buying the worst house on the best street?” Well, as it turns out, this “best street” might actually lead you to the poor house.

Most of the millionaires profiled by Mr. Stanley live on less than 80 percent of their income. They are frugal and focus their attention on investment rather than consumption. Their goal is to convert income into wealth, which is significantly different than people who act rich.

A psychology study by Ryan Howell, which was written about in the book, found that having “things” isn’t what usually makes us happy. If “things” do, it’s short-lived happiness.

Instead, what makes us happy are life experiences. The good news is that life experiences are free.

A brilliant marketer recently recorded a 13-minute video detailing how marketers can generate very targeted leads by advertising on Gmail. It’s probably the best lead generation strategy I’ve stumbled across in a long time. You can watch his video here:

http://www.ProfitWebinar.com

You’ll notice in the video that the examples are not for real estate agents. This doesn’t mean you can’t use this strategy to generate very targeted leads in your business. Using his approach, you can display advertisements that specifically match what’s included in the prospect’s emails. Pretty scary, huh?

For example, let’s assume someone using Gmail in your area types an email to a friend and writes something like the following:

“I’m thinking of buying a home this summer”

You could display the following advertisement:

Thinking of buying a home this summer?
Check out this free list of beautiful homes
in YOUR AREA available below value

http://www.YourWebsite.com

Do you think this advertisement would get clicked on by the person writing the email? I’m not a betting man, but I’d guess the odds of the person clicking on this advertisement are pretty high because the advertisement is a perfect match to what they’ve written their email. You could use this same strategy for seller’s, too! Consider a person writing the following email in gmail:

“I’m going to put my house up for sale in March”

You could have the following advertisement displayed:

Putting your home up for sale?
Download this shocking report detailing 7
costly mistakes sellers make when selling
their homes.

http://www.YourWebsite.com

This is very advanced marketing and the good news is you can dramatically reduce your advertising costs and increase the number of leads generated by using this Gmail Advertising strategy. To learn more about Gmail advertising watch this 13-minute video:

Photo from h.koppdelaney

One of the easiest ways to double-end more sales and dramatically increase your commission income is to have synergy throughout your business. The definition of synergy is:

The interaction of two or more agents or forces so that their combined effect is greater than the sum of their individual effects.

Synergy is about maximizing your efforts in such a way that they leverage each other for additional profit. Unless you really plan things properly, it’s hard to achieve maximum synergy in your business. Most real estate agents cast a wide net when marketing their businesses. They go after sellers, buyers, investors, renters and folks looking for almost every type of property available. A sale is a sale, right?

Well, this strategy has zero synergy because one prospect cannot be leveraged into two sales.

To explain, let me share a little bit from my business. Most of you know that I worked exclusively with investors. Every lead generation advertisement attracted investors. In fact, I built a rather large database of investors. These investors were looking primarily for a specific type of single family home that worked well for the investment strategy we specialized in. As time rolled on, the top listing agents in my area would call us when they listed a property meeting our client’s investing criteria and we were able to sell their listings rather quickly.

Sounds good on the  surface, doesn’t it?

What would have happened if I had started to market to attract sellers who owned the specific type of single family home my clients were interested in acquiring? Do you think it would have been possible to double-end most of our sales? Of course it would. This is because I would have had synergy between prospects responding to my marketing.

This could have been easily accomplished by splitting my lead generation advertisements between investors and sellers meeting our investing criteria. In essence, I would have built two different “targeted” lists of prospects with 100% synergy.  Think about how easy a meeting with a seller would be…

“Mr. Seller, I have a very large database of pre-approved investors who are looking for homes meeting your specific criteria. In fact, we typically can sell a home such as yours with one email to our database. If you’d like us to setup a tour of your home this weekend sign here”

How could a seller say no to this? They couldn’t and that’s the point. Had I used synergy in my business, I believe we could have completely controlled both sides of a majority of sales for homes meeting our specific criteria. This would have provided more revenue and income with less work because we would have doubled our revenue on each and every sale.

“Think like a man of action, act like a man of thought?” Henri Bergson

When you take time to think about this, you’ll see it’s very powerful.

Over the weekend, I watched a segment on the Today Show highlighting a new book titled “How to Make a Fortune” by Ron Insana. I believe the video of this segment might be helpful for you in your marketing. To see what I mean, take a quick peak below. Note the video takes a few seconds to play!

Visit msnbc.com for breaking news, world news, and news about the economy

If you watched the entire video, you probably heard Ron Insana say now is the absolute best time to buy a home. His comments were for both buyers looking to buy their primary residences and investors looking to buy foreclosures.  You might consider using this video with your database to help get buyers and investors off of the fence and into action. The reason why is because Ron Insana, a recognized financial expert, is saying now is the time to buy. This is much different than you telling your prospects now is the time to buy. Always remember, showing is better than telling.

Here are a few ways you can use this same video in your marketing:

1. Sending a link to the video via email to your database. In the link, offer a free list of the best foreclosure deals in your market place or the best buys in your area.
2. Embed the video on you website or blog and direct prospects back to your site. You could make a special offer in your blog post offering a special tour of the best priced homes on the market now.
3. Or you could use this video to help market a free class for home buyers and investors. Put the video on your blog and then make a special offer for a free class on how to buy a beautiful home below value.

Whatever you decide, I strongly encourage you to use this video in your marketing. It’s good, it’s free, it comes from a credible source and it will help move more of your prospects into action.

TIP: If you’re not familiar with how to embed a video on your site, simply click the share button on the video and copy the code provided. Paste this code into your web page and the video will instantly appear when your page is published! It’s pretty easy!

One of my clients, Jeff Preston, emailed a summary of the top 10 reasons why his tenants paid their rent late in 2009. They’re pretty funny. Here they are:

#10. “My work cut my hours”

#9. “May pay week is off this month”

#8. “I’ve been really sick this past week”

#7. “The bank mailed the check to the wrong address”

#6. “My daughter got married and I had to pay for the wedding”

#5. “My brother passed away”

#4. “My car was stolen”

#3. “My nephew was shot in the head and we had to pull the plug on him this past weekend”

#2. “Someone hit me across both knees with a baseball bat at work and I’ve been in the hospital”

#1. “I fell over a wheelchair at work and hit my head. I was in a coma the last few days.”
I absolutely love #2! I have wonder where the tenant works?

Do you have any funny reasons to add to the list? If so, add them in the comments section!

In the midst of writing my new report titled “How Real Estate Agents Can Eliminate Negative Cash Flow in Their Businesses”, which will be released on Wednesday (January 6), I received a Men’s Journal magazine in the mail. The feature article titled “What I learned from My Father, the Grifter – A lifetime of lessons on money from a con man”, by Pat Jordan, summarized various money lessons learned from his father, who was a professional con man.

Here’s an interesting quote from the article:

“I know he would not approve of my mortgage, my car payments, my credit card, my monthly “nut,” which I can sometimes cover, but which often overwhelms me. That’s a gambler’s term – the minimal expense he needs to support his family. My father has always kept his “nut” to a minimum – rented apartments, cheap secondhand cars, no frills. No matter what, he always told me, a man has to meet his “nut.”

Both of these examples reveal the same lesson – keep your fixed monthly expenses to the bare minimum. The lower your “nut,” the more freedom you have in your business. The higher your “nut,” the less freedom you have in your business.

What it really seems to boil down to is:

If your “nut” is lower, you own your business.
If your “nut” is higher, your business owns you.

Or I can put this another way…

If your “nut” is lower, you can work less and enjoy life more.
If your “nut” is higher, you must work more and enjoy life less.

Bottom line – Your “nut” ultimately dictates how much happiness and freedom you’ll have in life.

Another way to think about your “nut” is that for every dollar your business spends, you must generate $5.00 of revenue after factoring taxes and other related expenses. Eliminate the dollar spent and you’ll have to generate $5.00 less in commission income. Aka – less work & fewer homes to sell!

How to Lower Your “Nut”

Let’s analyze some common business expenses your business incurs on a regular basis and see how we can minimize, eliminate or offset them:

1. Real estate licensing/CED/e-boxes/signs
2. Rent/Desk Fees/Commission Splits
3. Advertising
4. Payroll
5. Business Utilities
6. Website
7. Auto-Related Expenses
8. Dues & Subscriptions
9. Business-Related Equipment

In my new report, I detail exactly how to handle these 9 expenses using the 5 strategies listed below:

1. Eliminate: This is easy to understand. Simply stop using the service or product and eliminate the expense all together. An example from my business was a voice broadcasting service I used to use in my marketing. I would send automatic voice broadcasts to prospects marketing various items for my business. The “Do Not Call” laws virtually eliminated voice broadcasting. This expense became easy to eliminate.
2. Minimize: Try and reduce your expense. You might be surprised to find that you could get a reduction in many of your expenses simply by asking. Or if you can’t minimize, see if you can use the product or service less and negotiate a lower rate. For example, I have a bookkeeper help out with paying bills, reconciling accounts and preparing financial statements. She works one day a week. I could change her schedule to one day every other week. This would cut this expense in half.
3. Reversing the Negative Cash Flow: This is a profound concept and can literally change your business dramatically. The idea of reversing cash flow is to generate income specifically to offset the expenses you must incur in your business. I’ll give you a few examples of how to do this later in this report!
4. Targeted Investing: Investing into an asset that provides you with income to cover a specific expense for your business. For example, let’s assume you pay $100 a month for utilities. Can you invest into something which pays the equivalent of $100 a month or $1,200 a year to offset this expense? There are many stocks available that pay dividends. A few examples would be Nike (pays a quarterly dividend of 27 cents a share) or Campbell’s Soup (pays a quarterly dividend of 27.5 cents a share) and Sysco (pays a quarterly dividend of 25 cents a share).
5. Restructure Expenses to Pay When Income is Received: The last way to eliminate negative cash flow in your business is to try and restructure or renegotiate expenses so they’re only paid when income is received. Almost as if they are to be deducted from your commissions. This way you don’t have to pay for the expense before getting paid.

NOTE: I’m only going to sell 100 copies of the new Zero Negative Cash Flow report and 57 have already sold to agents who signed up for the pre-release notification list. Watch for an email from me on Wednesday January 6 with the subject line “Eliminate Negative CF NOW!”

I’m still working on my new report titled “How Real Estate Agents Can Eliminate Negative Cash Flow in their Businesses” and just included a lesson about cash flow I learned from the movie “Heat.”

Can you find the business lesson in the “Heat” movie trailer?

Robert De Niro, who plays the leader of a bank robbing gang, says:

“If you want to be making moves on the street, allow nothing to be in your life that you cannot walk out on in 30 seconds flat, if you spot the heat coming around the corner.”

This is actually very valuable business advice to apply if you want to have a business with zero negative cash flow. To show you why, I’ve re-written De Niro’s line for us to be:

“If you want to be profitable in business, allow no expense in your business that you cannot cancel in 30 seconds flat, if you spot a market slowdown around the corner.

Side Note: My new report on how to eliminate negative cash flow in your business will be released on Wednesday, January 6th, 2010. Join the pre-release list and have advanced access to this report at http://www.NotificationList.com

How Real Estate Agents Can
Eliminate Negative Cash Flow in Their Businesses

I have a good marketing test for you. It’s the most basic, fundamental test you can run on the marketing for your business. In fact, it involves asking yourself one simple question…

“Would I buy from me?”

Be honest. If you launched your marketing campaign on yourself, would it compel you to work with yourself?

I’ve learned over the years that selling homes is not as much about sales skills as it is about relationship-building. Don’t get me wrong; it is very important to be able to sell, but think about your best sales experiences, your best clients, and I’ll bet you’ll see that you built great relationships with them, whether they were buyers or sellers.

This is an important aspect about our business that many, if not most, real estate professionals completely miss. It’s not entirely their fault – we don’t learn about relationship-building in our licensing classes, and our whole industry is in a “that’s-way-we’ve-always-done-it” mindset when it comes to marketing.

We mail postcards, send business cards to our spheres of influence, maybe email our latest listings to a group of people. Does any of this truly seem like relationship-building stuff to you?
Not long ago, I wrote an article titled “12 is the Magic Number.” In it, I cited statistics compiled by the National Sales Executive Association, which recently reported the following:

2% of sales are made on the 1st contact
3% of sales are made on the 2nd contact
5% of sales are made on the 3rd contact
10% of sales are made on the 4th contact
80% of sales are made on the 5th – 12th contact

Aside from not generating enough leads for their business, the single-biggest mistake I see agents make is the lack of consistent follow-up. If 80 percent of all sales are made between five and 12 contacts, it obviously requires follow-up to achieve any real level of success.

So many agents invest good money to generate leads, then make a phone call to each prospect, mail a postcard maybe, and if there’s no immediate sale -– poof, they disappear from that prospect’s radar. This is a huge mistake, and it leaves massive amounts of money on the table.

What I have found is that you must have consistent, constant contact with the prospects in your database. And not just your business card or a generic greeting card at the holidays – I mean real content, information they can use. Articles. Resources. Even entertaining stories about yourself and what’s going on in your life. This is the stuff that builds trust, fosters real relationships and leads to sales and referrals. This is the stuff that gives you loyal clients for life.

In my business, I sent out a monthly, hard-copy client newsletter full of advice, tips, educational articles, funny stories, etc. It got to the point where I would get it out a couple of days later than usual, and I’d get calls and emails, “Where’s my newsletter?”

When you have prospects and clients like that, THEN when you send an email with your latest listings or your “deal of the week,” you will get a response. I have seen it first-hand in my business. You must build the relationship first. Don’t you prefer to do business with those you trust? Wouldn’t you rather work with someone you know?

Your prospects are no different, which leads us back to the all-important first question: Would you buy from you? In other words, is your current marketing building the relationships required for sales success?

To learn how to lock clients to you for life, download my Farmer Report for free at www.FreeFarmerReport.com