Today on the More Cheese Less Whiskers podcast, we're talking with Sue Richey from Northern Virginia, where she runs a very successful property management company with her husband.
This is one of those businesses, that if you're fortunate enough to get it up to scale, you've got the stability of recurring revenue. There's a base of clients who love you and really depend on you and, if nothing's broken, will continue to stay with you.
It creates a big opportunity in your after unit, and we spent a lot of time exploring the opportunities to expand within the people she already has under management, by talking about the proprietary metrics that are available.
This is a great episode to really uncover the potential, and very applicable to any business with a healthy after unit.
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Transcript - More Cheese Less Whiskers 171
Dean: Sue Richey.
Sue: Hi, how are you?
Dean: I am good. How are you?
Sue: Very good.
Dean: Well, welcome.
Sue: Yeah, this is great.
Dean: where are you calling from?
Sue: I'm in Virginia. I'm in the Washington, D.C. suburbs. Just outside.
Dean: Okay.
Sue: Yeah.
Dean: I gotcha. What's the situation up there weather-wise right now?
Sue: Well, I don't know. We had a weird mix of weather. We had snow the other day, but it's going to be 69 degrees this weekend, so I don't know
Dean: Hey, perfect.
Sue: I'll take 69 degrees. I like the snow, but I don't love the cold.
Dean: Oh, well, it's sunny and perfect here in Florida, just in case you were wondering.
Sue: Yeah, yeah. Where exactly in Florida are you again?
Dean: I'm in Winter Haven, so just outside of Orlando.
Sue: Okay.
Dean: Yeah, this is perfect.
Sue: Yeah, yeah.
Dean: I'm excited to get to talk to you, so we've got the whole hour to hatch some evil schemes for you here.
Sue: Okay.
Dean: Tell me what's going on, and what you think you'd like to focus on. And let's see what we can do.
Sue: Okay. Well, I know you talk a lot about real estate. You have done a lot of -
Dean: I do.
Sue: And meeting with people in real estate, so that is our background. It's interesting because I learned about you through many of the people through Strategic Coach and the overlap with so many of the other people. I've been listening to your podcast and listening to a lot of... I have a marketing background and I love, love marketing, but we have been so... The past many years in our business, been so much with the doing of stuff that I haven't had the opportunity to really focus on how can we grow and how can we be really strategic in the marketing side of it.
Dean: Yes.
Sue: So that's what I'm focused on now, because we have built up a good team of people. They're handling a lot of the day to day stuff. My husband really oversees that team, and is focused more on the operations. And I'm focused on the marketing and the growth for the going forward.
Dean: Very nice.
Sue: Yeah. Since 1997 I've been in the real estate business. Started out as a traditional agent, and my husband joined me in 2001. We were just rock and roll - real estate. And during that time in the early 2000s, we started buying to invest in properties of our own. And learned more about the managing of rental properties. And then as the market started to change, and the down turn started more and more people and agents we knew said, "Hey can you help my clients? Can you manage their property?" So that's how we started, we were kind of like okay. So we took on a few and it was kind of good as the market started tanking. Now there was a little steady stream of income. And then we got to the point-
Dean: You know what's kind of funny is almost-
Sue: What's that?
Dean: I was just going to say, it's funny that almost every property management story starts out with, we had a couple of people that said can you handle this for us. It's almost like you reluctantly got into the business, and then it just kind of snowballed from there. Because now you do property management. And it's one of those businesses where it doesn't make sense to be half in it. You're either in it or you're not. Right?
Sue: 100%.
Dean: So, you're in it all the way.
Sue: We are. And I don't think... I don't know, you don't go into it going, "Ooh, this is like a glamorous business. Let's do property management and deal with all of the headaches." Because in real estate transactions people are generally happy. They are excited. I sold this, or I bought this. With ours, people are happy, but there's generally, there's a problem.
Dean: It's only bad news right? Yeah. Like tenants leaving or there's something wrong with my house.
Sue: Right. So anyway, you fast forward and now over the years we bought a couple of other books of business from people. My husband Craig stopped selling real estate completely, just to really focus. Because they're very different. Very different things you need to know. I still do a lot of real estate sales, as do many people of our team. So we do a mix of things, and they compliment each other because obviously you manage properties, people are like well, I'm ready to sell. They know us, they like us, trust us. Then we sell it.
So they definitely feed each other. We have eight employees, we're small. We manage just over 300 single family properties. No HOAs, none of that. So, now we're really at a place where we've been working a lot on the process of the business. We have a system. There's always improvements, but we feel look we're ready to take on a lot of people, we're staffed with extra capacity. So, that's what I'm doing. And I'm trying to figure out what the best way to do that. I have a million ideas and I'm trying to rein my focus on the things that will make the most impact, and then build on it.
Dean: So, right now a couple of things that kind of thwart people at that stage are capacity. Where do you think you are in terms of your capacity to take on new doors, or new clients?
Sue: Well, we definitely have the room. We're not over staffed, but we absoulutely have room.
Dean: Okay, so that's good news. So you're not going to be scrambling to drop the ball when you get a lot of business.
Sue: No.
Dean: So it's a pretty simple model really. Here's how I think about it, I break it down to what's the radius around your office where you actually handle the, comfortably your clients?
Sue: We'd like to stay a little tighter, but we probably go 20 miles.
Dean: So, when you look at that... If you drop a pin in your office and go 20 miles around that, there is some finite number of properties right? And this is how we kind of think this through, you have visible prospects. Meaning that there is a knowable number of people who own investment properties in that radius. And probably a good clue is looking for people who own multiple properties. That's all knowable. You can literally scrape all of the property records and tax records and find people who own multiple properties which would be your probably best candidates. Somebody who's got one property, they're probably less likely to have you manage it. Or they're more difficult to find anyway. But be better for you if they had multiple properties. So do you have that list right now?
Sue: Like you said, it's easy to get, I don't have it at my fingertips but I can pull that at any time and just start to look for... We've talked about this before. We've done little bits of mailings to absentee owners, but nothing persistently. To answer, I don't have it now, but I can get it in 20 minutes. You know what I mean?
Dean: Okay. Yeah, I get it. So when you look at it, part of the thing is that you've got 300 right now, properties under management. And you've got, what would be good for you to have a sense of is how many units are there potentially. Like, what's the potential market size for this in your area. Just so you know what you're kind of working with and how to budget or think about it. I always look for what would be the total yield of this. When you look at it, how's your pricing structure set up?
Sue: We're just a percentage of the monthly rent.
Dean: Okay.
Sue: So we have a leasing fee and -.
Dean: So what would be a typically month for a number for a client, taking rents into consideration, what's your typical monthly charge per door?
Sue: Our average... percentage wise it's between eight and nine percent. But our monthly average management fee is about just over $200 a month.
Dean: Okay. Perfect. And that's a factor that you've got high rent in the area where you are.
Sue: We do.
Dean: Yeah, so that means that you've got $2500 say per client per year if you look at it. And that's the kind of business once you get someone as long as nothing breaks, they'll stay, and stay and stay. What's your average tenure? Do you know?
Sue: Well, at least... Well I don't know the average exactly is, but it's usually at least three or four years you have people as long as you have seniors.
Dean: Yeah there's $10,000. Do you measure your return on your portfolio in terms of how many buy and sell transactions it ends up? Do you help people if they say, "Hey we want to expand, we will buy another property."?
Sue: Yeah.
Dean: Or do you just do the seller side?
Sue: No. We definitely sold additional properties to current owners.
Dean: Okay. And do you measure the return on your portfolio, we'll call it? Return on portfolio in terms of the number of sell or buy transactions you do from that group of people?
Sue: Yeah, we track the sales but I haven't put that in to any sort of-
Dean: Metric?
Sue: Yeah.
Dean: Okay. So that's one of the things I would look at coming at this from two sides. The after unit, if we talk about the dealing with the people you've already got under management. That they're just your communication with them is going to provide three possible opportunities that they buy more properties, that they sell any of the properties that they have or that they refer, they refer somebody. Do you get referral from your clients right now?
Sue: We do. We give them a free month of management fee if somebody signs up that they refer. So we do get some. We just have to keep that in front of them because they don't remember.
Dean: So, how proactive would you rate yourself on that after unit, communicating with your 300 right now in terms of... I know you said you do get people who sell and you do get people that refer or buy but is it primarily that they come to you? Or would you say we're doing something to stimulate that? Or is it just -?
Sue: We're not doing enough to stimulate it. I want to do more things. They will have a conversation with one of our property managers and they'll say oh you should talk to our team. The property managers know in advance because they know we're not going to -. They bring it up.
Dean: They say, once this ones over we're going to rent to them.
Sue: Yeah, exactly. We do a quarterly newsletter. Which is an email newsletter with some other things. It's in there, but again people have to read it. And that's more than that.
Dean: Okay. And do you send them a statement or any other... Like, if I'm one of your clients and your property is under management, what level, how many, what kind of communication am I getting from you over the course of a year? I get your quarterly newsletter. Is that physical or email?
Sue: It's an email through Mailchimp. Every month they'll get a notification, they have their monthly statements. I think we have a reminder on that email that's changed over time. You know the referral process, so there's that. I'm working on... And honestly that's about it from proactive stuff. I'm working on an email theory that I want it tied to as people sign up. Tied to the point in which they are with us over the years.
Dean: Right. Okay. So I would look at that as opportunity number one. Let's say that, you've got... I'm going to say, because it's a... Do you have a sense of how many transactions you did in the last 12 months by cell or referral from that group, what would it be?
Sue: I do. We just looked at that today. We went through our 100 numbers. So over the past year from our data base, we sold nine.
Dean: Okay. So if we say nine-
Sue: It was a lower year than-
Dean: And what would be a year before? If you took that last three years, what would be a typical?
Sue: The year before was 11, and I believe the year before was little bit more than that.
Dean: Okay. So if we take that let's call it in the middle, 11 out of 300 is about a 3.6% return on portfolio. I'm going to put that out there as a metric for you. So right now that means that your return on those 300 people was, and imagine the commissions are pretty high in terms of the price range in what they're selling or buying. Do you have that number of how much money that actually amounted to?
Sue: No I don't have that number in front of me.
Dean: So if we say typically your average transaction would be $20,000? Is that fair?
Sue: Because we give these people a discount, I'm going to say it's more like, let's call it $12,000.
Dean: Okay. So $125,000 say is what that yielded for you. So there's plenty of money right there now taking your sort of, I would call it the minimum approach. That's just in the normal thing. So what I would be looking at is how could we take some of that money, just a very little amount. When we're taking about 300 people to mail something every month to those people, even if it's just a postcard summary or something postcard. Let's say you're going to budget over the course of the year, let's call it $20 per door for mailing to them, communications over the next 12 months. That's going to give you a $6,000 expense which if it increases your return on portfolio by one transaction, you've doubled your money.
Sue: Yeah.
Dean: So it's a very high probability, low risk setting. And if you take it again, that you're ... And it's coming from ... You're already playing with house money on that, in a way, that you know that it's coming, because you're not spending any money to get that 120,000 now, other than being awesome and people like you.
Sue: Yeah, are you talking about something like physically mailing? Our challenge was physical mail, these people are all over the world.
Dean: -, but use some higher, a uniformed, government employee to track them down and deliver something to them for a dollar.
Sue: Right, right.
Dean: And we've got agreements with all the other governments that they'll take it at the boarder and track them down on their end.
Sue: Yeah, yeah.
Dean: Pretty good system.
Sue: We can get there. Yeah, no, that makes sense. We have to just figure out what that is and what the message is. And that's where I struggle a little bit with, okay ... Okay, all right, so I agree. Our current database is a good opportunity, number one, for-
Dean: Yes. So when you look at that, especially when they're international or out of the area. When you're their lifeline back to ... I imagine it makes a lot of sense because it's probably a lot of government people, it's probably a lot of people with international companies that are based in the DC area.
Sue: Washington.
Dean: Yeah, yeah. So when you look at that, having this lifeline to their property there and the market there, that makes a lot of sense. Now, if you were to look at your 300 and do some sort of scoring or categorizing, there's probably people that you could probably put as higher probability for one thing or another, right? Who owns the most properties, of the 300? Have you got somebody? It's not 300 individuals, I'm sure, you've got somebody who owns multiple doors, right?
Sue: Yeah, the most somebody owns is six, and that's an overseas client who owns a handful. Or maybe it's five they own. We have a couple of people that own two but the majority are single-owned, one properties.
Dean: Okay. And so, if you went through them and you looked and just eyeballed them and thought, "What would be the nest thing for them?" You probably know a lot of them, or your team would know who they are, to be able to say, "Okay, this is somebody who's probably at the beginning of their investing career, that they're going to be building a portfolio of properties." If you were to categorize them as a building client, somebody on their way up to, this is their first property, but they're going to advance and get more. Versus somebody who, they lived in the area for years, they got an opportunity to go somewhere, and they're renting out their house for two years while they go take a contract somewhere else, kind of thing. That they're not an investor, you're truly just managing their property while they're gone.
Sue: Yes.
Dean: That there's some of those people, that they're not likely, they're not investors, per se. So the thing that might happen for them is that they may have been testing the waters over there, renting out their house while they see if they like it, then they decide they're going to stay, "Okay, we're going to let go of the house now."
Sue: Exactly.
Dean: Or, we're coming back, and they're going to move in and live in the house, right?
Sue: Right.
Dean: So, having those categories among those people will be a beneficial thing for you too, right?
Sue: Yeah.
Dean: To have the opportunity tags for them.
Sue: Yeah. And I'd say that the majority of our people are the second. Because we have, for example, a big portion of our database are foreign service officers. They're good clients because they watt somebody to manage their property, they tend to have higher dollar properties, they're usually gone for three to five years. And then maybe they have another posting where they don't come back. And oftentimes, yeah, they will sell or they'll move somewhere else and don't move back into that property.
Dean: Yeah, it's like monkey bars, they keep their hand on one while they're going to the other.
Sue: Yeah, because in Washington, or prices are so high and we peak ... It's really hard to make cashflow here. This is a hard market to be just a true investor unless you can buy cash. We don't have a ton of those in our database, really. It's more of the second category.
Dean: Okay, perfect.
Sue: I feel like it's probably, yes we've had a few people who have purchased other things but the majority are going to sell with us, if they sell. That's what we want, as opposed to somebody else. And refer other people, other foreign service, other people who are posting. They all talk, that's a big, tight network.
Dean: So perfect, that's really good to know.
Sue: Yeah.
Dean: So what we want to look at, if I were going deeper into your after-unit metrics here. That whole, that return on portfolio for you, is going to come into those three categories that they, people who bought something else, people who sold a house, and people who referred you, somebody. And if we look at each of those, do you have a sense of how many referrals you got from that 300?
Sue: I would say probably a handful.
Dean: Okay. And it's good, when you're looking at this, to ... And I know it's the first we've talked about it, but having this awareness now, if you go through and look at these, it's easy for you to see because I'm sure, when you're doing your intake of a new clients that you're noticing where they came from. You're sourcing them so you can recreate it here for the last 12 months. But when we look at the referrals here, what we're really looking to do is to get to a situation where they are reflexively thinking of you whenever they hear somebody talking about property management.
I don't know whether you've heard me talk about that all referrals happen as a result of conversation. And in those conversations, for you specifically, three things need to happen. They need to notice that the conversation is about property management. Now it's not, "Hey, we're looking for a property manager," per se, which is one overt thing that can happen. But there's all the peripheral things, adjacencies to that. Which would be, "We're looking into a contract in London for the next three years." Or, "We're looking to go over here." Or, "We're looking to explore our options." Or, "We're going to travel." Or, "We're going to..." All of those things that might be the cause, and they might think that the conversation is about that, but since they didn't say, "We're looking for a property management company, that thought doesn't trigger a thought of you.
Sue: Yeah, yeah.
Dean: So, we want to presence that, for people, where if they hear someone talking about... Is there a popular place that people will take a contract to or go somewhere? Is it to Europe or London or Middle East, or?
Sue: Yeah, it's kind of everywhere, really.
Dean: Okay.
Sue: A lot of Asia.
Dean: Asia, yeah, okay. So whatever it is, what we want to do is that.... Going overseas would probably be a good one.
Sue: Yeah.
Dean: So that would be the blanket term for there. So if we could program all 300 of your clients, because of the circles that they run in, and especially the ones that are in that situation themselves, or your 300 there are some that are exactly in the situation. That if we were to say to them that, "Just a quick note, in case you hear someone talking about taking an overseas position or moving overseas for a few years." You're bringing it around to the property management thing but it's not specifically spot on that. Because id imagine that the people that do refer you, somebody says to them overtly, "Hey, who do you guys use to manage your property?"
Sue: Yeah.
Dean: And they go, "Oh, Sue Ritchie, she's awesome." That they'd be more than happy to say that when prompted. But in that same conversation about, "Hey, we're thinking about going over to Europe for a few years." That may not stimulate a thought of you. Especially because, not that you're not awesome, but that you're not on their mind because you're really not in communication with them.
Sue: Yeah.
Dean: Honestly, right? If you're doing your job right, they're not thinking about you.
Sue: Yeah, right.
Dean: Right? That's the reality. It's your job that their mind is clear, they don't even think about that property.
Sue: Right, right, okay.
Dean: So we need to presence you in their mind because they're definitely having those conversations. And when those conversations come up, what would be something that would be very useful, that you have, that you could offer information-wise, that would be helpful to them? Is there some special - information? Is there some special rules? What are the questions that people have for you when they are inquiring? Because I would imagine it's somebody whose been living in the house for years and now they get this opportunity and they don't want to let it go. So it's the first time they've ever rented out the house. And, what are they concerned about, what are they asking you about, what do you know that they need to know?
Sue: Yeah, so are you saying something that we could provide too. Like our database-
Dean: - Yeah something that could be... What we're looking for is something that your clients could get for somebody that would make them look like a hero. That would give them the glory. Because the last thing we want to do, we're not going to say to your clients, Hey if you hear someone, tell them about me and tell them how great I am. Don't forget to tell people how we can help them right? You're turning them into a sales person for you. But what we want to do is, you want to be a resource for them to help their friends. And that's the real reason that people refer. The real reason that people refer anything is because it makes them look good and feel good. So we want your clients to feel like an insider.
Sue: So yes I completely agree. So are you talking about something like say a physical document that they have?
Dean: Yeah.
Sue: Here are all the fears you have when you think about renting. Or 10 questions you should ask a property manager. I have a number of different [inaudible 00:33:26] I've put together. I've also been building up our YouTube channel with videos and content focused all about questions landlords have if issues come up.
Dean: What would be the title of the book that your clients would definitely want? If you think about somebody like Dave Ramsey with his book Financial Peace, is there kind of a thing of property peace? Or what do your clients really want while they're gone, is they want that peace of mind that we've got this kind of thing. So when you say to somebody like that, just a quick note in case you hear someone talking about going overseas, a lot of people the new year they get these new opportunities. If you hear of someone talking about this give me a call or text me, I'll get you a copy of my property peace book to give them which shows how to have peace of mind when you're overseas and your properties staying here.
That kind of thing, and I'm just, what I did for you is the outcome but you would spend an hour or more just thinking about what the right words would be for that. But that's the tone of it that we want to resonate with oh yeah, that's exactly what I want. And that would make them feel like a thoughtful friend. So now your client calls you. Instead of having your clients telling everybody else to call you, and you not know about it, what's way more valuable is if your client calls you because they already know you. So it's much easier to get your client to call you, because I'm sure you've had situations where you run into people and they say, "Oh did Jason ever give you a call? I tell people about you all the time."
Sue: Yeah.
Dean: You don't hear from them. So we want to make sure you get notified when they have one of these conversations.
Sue: So you're saying if I put an E-book together for example?
Dean: Yes I think that would be a really great thing. Because it's all about encouraging the people to refer you, introduce you. It's not really about referring you, because we're not using the word referral, we're using introduce as the thing. We want for every, this is the thing that has to trigger, they have to notice the conversation is about property management or something related to that. They have to think about you, and then they have to introduce you to the person they were having a conversation with. That's how a referral happens.
So I imagine that the referrals that you did get were probably either 80%. A person calling you up and saying, "I was just talking with Bob and Judy, and you manage their property and they told me to give you a call because you could probably help us manage our property." That's probably 80% of those phone call that you get. And then the other 20% would probably be Bob and Judy calling you saying, "Hey we were just talking to our friends Mark and Connie, and they're moving over to Europe for a couple of years and they need someone to manage their property. I told them all about you, you should give them a call." So, what we want to do now, is we want to orchestrate more of that. We want to do it where if you every month are presenting a different high probability conversation like that, that would be a valuable thing.
Sue: Yeah. That makes sense. You wouldn't say I put this together, you wouldn't send this out to them all at once?
Dean: No you want to send it to them so that they can when they hear the conversation they can ask for it. And you'll have something for them to give to. So now you're in a conversation with your client who already knows you and likes you. And you're talking about their friend and you're able to say well what's there situation? Would you like me to send it right to them? Or would you like to do a three way email and introduce us and I'll send it there? Or should I call them? You're now in conversation about the best way to collaborate to make sure their friend gets the best help that they need.
Sue: Right. Okay.
Dean: And we want to do that. A great goal would be if we set a target to raise your return on portfolio to 10%. That would be 30 transactions from that instead of the 11. And that would make a big difference. That's the first lowest hanging fruit opportunity, least expensive. And probably the most valuable.
Sue: One of the things we're trying to do with our current data base is sorted in looking at who are our top 20 people. And whatever that criteria is, whether it's dollar value of their rent. Are they just I get it, I trust you. Whatever those factors are and then just figure out, focus on them, but also figure out how do I duplicate those people with inter data base. We haven't done much of... We started recently doing quarterly updates where the market value of their property, not for rent but for sale. Just so they know. They have no idea what's going on.
Dean: That's exactly right. They may see wow prices are going up. If you're doing the whole Northern Virginia market snapshot kind of thing it gives them a sense of what's going on. And they may see uh oh prices are starting to slow down here and kind of go backwards we might be smart to sell now and get a head of it rather than wait. And I think that's going to be valuable on a lot of levels.
Sue: Yeah. So that we've been doing. But I like this idea of creating this sort of book, because this is a good lead magnet anyway, but it's also really something we can give people because it's all the same questions. I have all the material, I just need to compile it all together.
Dean: Yes, exactly.
Sue: Okay, so yeah I agree. I want to use that as strategy number one, but then look at other ways. And figure out what sorts of things I could mail to them on a monthly basis of value.
Dean: You only need one. You need one thing. The same format where you're... I think what would be good is, how many if you say of the 300, how many are far away? What percentage would be either out of state let's call it?
Sue: Probably 85%.
Dean: Okay, so that's great. Maybe what it is is you're doing a snapshot of what's going on in Northern Virginia kind of thing. It's like staying on top of what's going on in Northern Virginia over the course of while they're gone. I'm sure they might be getting homesick or feel good about what's happening. And the market snapshot, think about the postcard as a modular type of layout. You can have different departments in it. What would be the most important is that we have in email one of the things that we talk about, what I call your super signature. And at the end of every email, you see it from me, it's probably the reason we're here on this, I say whenever you're ready here's four ways that I can help you. Number one mine is be a guest of More Cheese, less Whiskers. So people click on that to get the info on how to be a guest. And then what I'm looking for for you would be what would be the triggers that somebody might start them on the path of their next step. What would be the three most common reasons somebody might call you? Or how do they start the process of moving forward here?
Sue: Are you saying what sorts of triggers can we put at the bottom of our email?
Dean: Yeah. At the bottom and on the postcard. But these triggers would be like, I call them cookies. Rather than just saying to people if there's anything you'd like to eat or drink, there's lot's of stuff in the fridge, it's go ahead and ask me kind of thing. We're baking the cookies and saying would you like a cookie? It's so much more likely to get a positive reaction. If somebody is thinking about selling their property probably the first thought on their mind is how much is it worth right now. I can imagine somebody might call you up and say, hey we're looking at our options here. What's a house worth now anyway? That's probably it, like how's the market doing? What's the place worth?
Sue: So I think using our CMA tool that's automated, we can definitely include that. I would also want to direct them to our YouTube channel which I'm continually building up. My focus is really about self manage landlord. There's a lot of content and a lot of information there. And that would certainly help somebody. Look it up and you don't know us, and find things that they could pass along to other people. And I guess, I don't know what else I could that would be... Maybe the download of the e-book.
Dean: That could be. Just thinking about whatever the triggers would be for someone. So finding how much their property is worth would be one. Potentially there might be some people within there who are investors or may think about being an investor. Talk about buying properties or buying investment properties. That might be a good thing. If they want to keep money in the U.S. keep there investments solid. So that might be a way of thinking about it. But yeah, you're on that right track there. There's so many opportunities around that. But if we want to talk about your before unit a little bit too. It's really truly a numbers game. You have knowable visible prospects in terms of if you want to expand the investor management side of it. Or do you want to stay specialized within the sort of while you're away manager?
Sue: No. We want both of those kinds of people, we just, in our market-
Dean: Because it doesn't matter to you, you're doing the same thing.
Sue: Exactly. It doesn't matter.
Dean: So it would be an advantage to have that.
Sue: So you're saying before these people become clients, that's what we're talking about.
Dean: Finding new clients. Everything, I was just looking at the clock, everything that we've been talking about for almost an hour has been specifically about the opportunity in your after unit. And I see that as a real legitimate way to go from 11 to 30 transactions in that group. I think without even batting an eye, I think that's what your possibility is there. Which that would be an additional, it would be a lot. An additional $250,000 for capitalizing on that. So, it would be worth some investment in doing that.
Sue: I agree. For those two reasons. For increasing the sales for that return, and for also the referrals. But while we obviously the dollars is in the revenue of sales important, that also means we lose all those clients as management clients, even though we've made money. We still need to be figuring out ways to be adding new management clients.
Dean: Absolutely. That's why selecting them, when we talk about profit activator number one, is selecting a single target market. And I've been talking a lot lately about this idea that the misinterpretation of it, or the fear that people have, or the approach that they're taking to profit activator one, select a single target market. The resistance to it, is that they're afraid to narrow their focus because they are trying to keep themselves open so that they can be selected. There's a different between having your options open so that more people will potentially select you versus what I'm talking about proactively is let's select a single target market which would be all of the people who own two or more properties in the 20 mile radius around your office. That's a knowable number. And if you do that and you have that list, all of those people right now have properties that are under management in some way. They're either managing it themselves and it's a headache and a hassle and they wish there was another solution. Or they're managing it with another property manager who maybe dropped the ball, or maybe has some negative experience on it. And it would be very easy to woo them.
It's not difficult to woo them when you're communication more with them than the incumbent. We look at if somebody really started paying attention and loving up to a lot of your clients, there might be a good chance that they're woo able. Because you're not communicating with them. So that leaves it open there. We didn't even talk about saving the attrition of it as well. When you look at it now, let's say there are a thousand, and maybe there's more, probably more, a thousand people who own more than two units in that 20 mile radius, now you're focused on those people are going to go from, some people may have 200 doors which would be a professional investment group. Or some people may have just two or three or five or whatever it is. And communicating with those people especially if they are out of the area.
Like a difference again, you look for your really high probability list. I would look to get the thousand best prospects. Meaning the ones with, probably not the ones with 200 doors, or 100 doors that probably have a professional management system, but the ones who have two to ten properties that are out of state as opposed to being local and that would be the highest probability I think, focusing on those people. Then thinking about what would they want to know, what can you do to educate those people, or join the conversation that's going on in their minds right now that are addressing the pain points that they have. Or the opportunities even if it's just in terms of the selling. Offering them the information on the market of their place. Do you manage multi unit properties?
Sue: No, we don't really have any in our data base. Not that we wouldn't, we don't have any.
Dean: Is that something that you would want to expand into? Like small multi units being four to six.
Sue: Small one, yeah duplex, fourplex. I think that's definitely an avenue we looked at. Just we scrub this list and how do we find them? So this is more like geographically looking at the number of properties versus another market for us which is this foreign service group of people.
Dean: How that is going to be, if it's foreign service people, especially if it's government, they're going to have a, you'll be able to tell from the address?
Sue: Yeah, exactly.
Dean: So, when you look at this, if you start with the big data set of everybody who owns two or more properties and what we're talking about now are subsets of that. So subsets meaning some of those are going to be people who own duplexes, triplexes, quads. You know that multi family property there. And you would approach them differently than the people that own multiple single family properties.
Sue: Yeah.
Dean: It's really about... That's the good news about the visible prospect and being able to narrow your focus like this, is that you can target the messaging through postcards because you get the physical tax address of everyone of these properties. And if you're mailing a specific thing to all the triplex owners and you're offering them the report on Northern Virginia triplex prices, nobody else is offering them that. And they own one, and it's going to be fascinating to them to see what's going on.
Sue: Exactly. I thought about full service cart campaign one of the things on my list this year is to try to reach all of these, again, who knows whether they're managing themselves. Whatever they're doing, but by giving them resources and content and again directing them. We've put together a whole list of a la carte services, so even if somebody is not ready for full service management, if they're not here, maybe they need a property of good thorough property inspection. Maybe they need -.
Dean: Exactly.
Sue: They need leases. So I have all these other parts to it, and I want to start to introduce those. And again, even just writing up a lease, just anything. We just broke it apart.
Dean: You look at that, yeah your catalog of services, that's all the during unit things that you can really embrace to create a total frictionless dream come true experience for them.
Sue: And if - it's fine. Then one day they might be like you're doing all this why don't you just take it over? And again I keep coming back to YouTube because my goal is to keep directing people there with building up to subscribers, building up an email list. But also, because I have some other ideas in the future for these kinds of people. Then we are in front and center, they'll get my videos every week.
Dean: This is great. One of the things that you can do that we've been working on now is those videos. We've got a way now where you can send, I'm calling them now video postcards, where you can send a digital variable QR code that you can send. You have the screen cap of the video with the title of the video with the description of what it is and a QR code where the play button would be with the instruction of just hold your camera over this and watch this video. And you would know each individual person by address that opened the video.
Sue: That's cool.
Dean: Right. So that's a brand new development. You're on the right track. Content is the catalyst here. That will give you more options for communicating. That's I think you're right on. It's very cool, the delivery stuff that we're able to do now is amazing.
Sue: Is that a new-
Dean: It's brand new. I have been developing this with my postcard guys. There's nobody else doing it. So this is a cool thing.
Sue: Well, that is cool. So you think that direct mail are effective.
Dean: Direct mail, whenever you got visible prospects that are high probability and high value, direct mail and postcards are the most addressable thing. If you don't have somebody's email address which would be a great thing. You've got it for your 300 which I love, but you don't have it for all of those prospects. So we want to do the direct mail so that you get their email address and now you can communicate with them that way too. But the fact is it's a knowable number. It's the same 1,000 people. And I use 1,000 as a place holder for however many it actually is. But it's the same 1,000 dream prospects.
Sue: Yeah, okay that makes sense. Those have been things on my list, I like the idea of really focusing first within our current data. We probably have a lot in there, we just aren't doing much with.
Dean: So much opportunities. So much.
Sue: Yeah. Okay.
Dean: That was fun.
Sue: Yeah, we just break it down in little chunks because this is really good and has been very helpful. I just have to create these messages. Even with these, by looking in the database and identifying all these people and breaking them down into - into multiple properties. Then I just have to come up with a campaign that will-
Dean: It's totally worth it.
Sue: No I know we are ending our time now, I didn't mean to do that. I appreciate all the suggestions. Again, I know you know this, I know you know the real estate business. Would you do a lot of consulting with real estate people?
Dean: I do absolutely. That's the thing, I have a particular love for real estate because it's how I got started. And what I learned marketing was applying it to my real estate business. And that's really the thing. Then having so much experience in all the other types of businesses, take that aspects now and bring it back to how it applies to real estate is even more amplified. But you've got a perfect opportunity there. So awesome. The good news is you're doing really well. You've got 300 doors already. You're not just getting started in the business. And you've got the capacity. Most of the people starting out don't have that opportunity.
Sue: That's definitely true. We have the capacity, we have a good base. But we've kind of been stuck here at this level for a number of years. We add, and we naturally lose some because people move back or sell. We need to push past this. I just want to hit it hard.
Dean: You can't same your way to different. So we got to different your way to different. And that's the thing just breaking down these opportunities. There's certainly a doubling at least of your after unit stuff available. And then that will fund all your before unit stuff. I think if you can and are available over the spring here, I do my three day break the blueprint events which would be a perfect mix up for you actually. Because you're in the point where you've already got the opportunity.
Sue: What is that?
Dean: So I do three days in Celebration Florida. And it's like exactly these conversation in a board room with 10 other businesses. We're going deep on the before unit, during unit, after unit. So we're sharing all of the strategy's there, but using your business as the amplifiers. So it's a good way to get your blueprint mapped out.
Sue: Okay. And what is it called again? Blueprint?
Dean: It's called the breakthrough blueprint.
Sue: Okay.
Dean: I'll get you the detail. I'll send you an email with all the details. That would be the perfect thing for you.
Sue: Okay. So you're coming out of that workshop those three days with sort of like a rose compass?
Dean: Yes exactly. Your action plan. Look at what we were able to do in an hour. Imagine three days of that on the whole aspects of it. That's what you really come out of there with is clarity, and action steps.
Sue: Yeah, okay. All right. I'll look forward to that and I will take all of this and digest it. And start moving forward.
Dean: Perfect. Well, that was great I really enjoyed it.
Sue: Thank you so much.
Dean: Your welcome.
Sue: Me too. Thank you. All right, happy new year to you.
Dean: Okay, I'll talk to you soon. You too. Bye.
Sue: Bye.
Dean: And there we have it. I love having conversations like that where there's so much opportunity just with even the people that you have right now. And I think that looking and defining the metric of return on portfolio as a metric to measure and to watch both in terms of repeat business that they get and the referrals that they get. And I think that we came up with some really great opportunities to expand those opportunities. And for a lot of businesses what we talked about in the before unit is applicable to any business that has visible prospects.
We laid out the 20 mile radius, the opportunity that is sitting there is those visible prospects the people who own the properties that they're not living in and specifically if they own two or more, it's probably somebody who needs some help with the property management. But however many people those are, it takes a little effort to get to that list. But whoever those people are, those are your visible prospects. And it's just a matter of being in contact with those specific people for the long term and trying to turn that into a relationship when they're ready and being there at the right time. Lot's to glean from this episode. And I hope you enjoyed it. And we'll come back for next week.