Real Estate's - Building Your Farm

Back in November, 2009 I wrote a couple of articles, primarily for Realtors, entitled “Building Your Farm”. The thrust of the articles was to suggest that Realtors, mainly new Realtors, with a little effort could build themselves a referral network that within a few years would supply them with plenty of business brought to them from past and present clients. I use the term “Client” to refer to someone who comes to you to represent them in business which involves whatever profession you are in, in this case Real Estate Brokerage. If you as a Broker/Agent deal with a person one time and have not established, nor do not establish a relationship that ensures that the person will do business with you again, then what you have is a “Customer” and not a “Client”. What we should strive to do is convert every customer into a client.

I have been a Real Estate Broker since 1975. During this time I have seen many people come and go in this business. I also have seen many people stay in the business. Those who stay and are successful are ones who built themselves, what I call, their “Real Estate Farm”. They sow the seeds with a new “Customer” by working their farm. The result is that the customers become clients and produce great “Crops” for the Realtor.

In case you would like to review those articles, which go into more detail about how to build your farm, they are still in the Archives of my Blog, http://www.RealEstateJack.net. What I’m going to do in this article is tell you about my personal experiences in my early days as a Realtor.

In November, 1972 after 22 years in the Army, I retired and needed a new profession QUICK. With a wife and four children (none out of High School yet), I needed far more income than military retired pay provided, especially in those days. I could probably have gotten a job with Civil Service; doing the same thing I had been doing with the Army. But I wanted something new and different, however, so with my Real Estate Sales Agent License in hand I embarked on my new career.

Now, as I tell this story about myself I’m also going to tell you about another Salesperson who began his Real Estate Career on the same day and with the same company. This is about a real person who I will call Homer. I’ll never forget how Homer and I were at the Real Estate office on our first day, in the library reading about Company Policies and so forth. This was on a Saturday afternoon, and as we were diligently reading, the receptionist came in and told us there was a lady on the phone who was at a house with our company sign on it, and she wanted to see the house NOW! She went on to say that we were the ONLY salespeople there and we needed to show the lady the house.

We were PETRIFIED! We had NO training except what was included in the Licensing Course. We were just supposed to be reading, NOT showing property. So, we went to show the lady the house. We didn’t answer any of her questions intelligently. Needless to say, she didn’t buy the house and as far as I know, was never heard from again. Now you thought I was going to tell you what a great job we did, right?

This little incident convinced me that this wasn’t going to be that easy, and that I better get some Real Estate Smarts real fast. So, I became a Seminar Junkie. I attended every seminar I could afford; sleeping in my van, etc. I eventually took all the CCIM Courses which were available at that time. Courses on Getting Listings, Exchanging, Counseling, Management, Etc. I asked Homer, with whom I had become good friends with, to go to some of these seminars with me, but he always had a reason not to go; couldn’t afford it, had floor duty that day, had to go get a listing, had to do showings, etc., etc.

My first full year (1973) in Real Estate I worked my a_ _ off. Believe it or not, I received the award “Realtor Associate Of The Year” for the state of Arizona in 1973 (my first full year in Real Estate). I think my total Sales Volume for that year was around Two-Million (This was a long time ago when a nice 4-2-2 home could be bought for $35,000. I know because I bought one, New)

During this first and subsequent years, I worked hard to stay in contact with people I had sold property to, those I sold property for, etc. I sent PERSONAL (not company) cards on birthdays, anniversaries, and most importantly – a card on the Anniversary of when they bought or sold the property.

After a couple of years I didn’t pull floor duty anymore. (If you don’t know what floor duty, you haven’t lived as a Real Estate Agent. This is where you are assigned to take ALL Walk-Ins, Call-Ins, etc.) I was fully occupied with referrals from past & previous Clients.

Getting back to Homer – Now I’m not picking on Homer. Homer became one of my “Real Friends”. However, Homer didn’t get the education he should have (in my opinion) and as a result in 1983 when I left this firm, Homer was still doing floor duty in order to find business.

These posts are the opinion of the author who is not engaged in rendering legal, accounting, or investment advice. If such advice is required or desired, the services of competent professional persons should be sought.

Finding And Developing Trust With Your Private Lender

So, you want to do Real Estate projects; however, you don’t want to finance your deals through Conventional Lenders, banks, or other Institutional Lenders. Even though you may be financially able to borrow from banks, you prefer Private Lenders for many reasons; such as:

1. They will make loans on properties and projects that banks will not.
2. They are more aggressive and will fund deals much quicker than banks.
3. They will do small loans.
4. you will have more control with your project.

Now, how do we find these Private Lenders? They are everywhere, if you look around. Let’s consider some of the sources.

1. Friends and relatives. You would probably be surprised at the number of people you know who would invest in IRAs, CDs, Money Markets, etc., and who have the funds in which to do it. Most of these people would like to have better returns on their money. So, if you can convince them that you can provide them with better and SAFER yields; some will be interested.
2. Professional people you know who may have funds available. Doctors, lawyers, dentists, CPAs, etc., usually earn very good incomes; however, most don’t have time to personally pursue investing and therefore depend on other people, stockbrokers, etc. Again, if you can get their attention long enough to explain your program, some will be interested.
3. Newspaper ads – Look for ads such as: “Money To Loan”. Also, you can place your own ads ; for example: “Investor needed for local Real Estate Loans” or “Real Estate note For Sale – Excellent Return” NOTE: You may not have a note For Sale now, but your intention is to create one.
4. Talk to Title companies, attorneys who do Real Estate closings, and CPAs who have investor clients for leads to Private Investors.
5. Join local Real Estate Investment Clubs and meet other people who are doing what you want to do. Investors also belong to these clubs.
6. Consider offering classes to Private Investors or “Would Be” Private Investors to explain your program.

NOTE: Be careful with any advertisement you may place in the newspaper. Do Not propose any specific yield in your ads. Do Not ever Guarantee anything in your ads.
Once you have found an investor who expresses an interest in funding your Real Estate projects, you need to develop rapport and an element of trust with that investor. In other words, you have to prove to the investor that you know what you are doing. This is where your written business plan with referrals (if you have them) comes in. If you are new at this and don’t have business referrals connected with Real Estate, get referrals from friends, attorneys, CPAs, bankers, and anyone you know who has some stature.

The main thing to the investor is, as stated before, is your plan and attitude. Don’t be a beggar and don’t be a “Know It All” either. Just lay things out as they are. The investor, who most likely has financed Real Estate deals before, will sense that you are for real. Then you must demonstrate that he is in fact correct; You are for real.

If you need help preparing for this, get help from other Real Estate Club members or seek out someone who is doing these kinds of projects. You can also talk to Realtors, Title Companies, etc.

I would appreciate any comments you may have to this and any other Blog Posts we may write.

These posts are the opinion of the author who is not engaged in rendering legal, accounting, or investment advice. If such advice is required or desired, the services of competent professional persons should be sought.