Real Estate Farming Step-By-Step System (How to Build a Geographic Farm)

in today's real estate market there's one skill if i could only teach one skill or do one skill it would be farming it's the basis of this business that has been for generations and it's still now more important than ever so today what we're going to do i've got price rainer with me after taking thousands of listings we're gonna go through and show you guys exactly how to evaluate a farm how to go in and become the expert and then how to market yourself in a way that gives you market share like never before [Music] all right price so what's good about this is is i think if you and i could go back and talk to ourselves when we first started the business a few years ago we would say to our to our younger selves start sooner farming do more farming and it's the foundation of everything that we've ever built i mean ultimately this is how we've built the business our individual businesses over the years so what i want to do today is i want to go through and really dive into what does this look like i want to take it from day one let's say that we're talking to an agent that maybe has done some farming wants to do farming or is looking to expand into other areas let's talk and let's start really about evaluating the right place because sometimes we can miss that what would you say as far as evaluating the right place well jimmy i think to evaluate the right place you know it requires going out and doing a little due diligence you know getting uh you know starting to really just dive in to the any particular community that you're interested in and digging into the numbers yeah really you know we get so caught up sometimes in the aesthetics of a community we go out and we fall in love with say the retreat yeah because you wind down the road you get there but and that's and that's part of the process but really the key to evaluating uh what neighborhood should become your farm is the numbers you need to look for some particular things you need to look for a community that really doesn't have a dominant listing agent that i call that a fragmented market where you have several players possibly that have a little bit of market share each you have a significant number of homes so the numbers work for you to invest in that community and then you know that that's really you know the long and short of it it's just as easy as that is to and really a price point that that's that's that you're comfortable working some people go in they want to go after the you know again back to the retreat the three four five million dollar you know uh average sale price of a community when really they need to be cutting their teeth on something that maybe isn't quite there in that you know five to 700 range maybe or something like that where they can compete and win yeah i mean bottom line is we want to find a place that's got rotation number of houses are sold a dollar volume that makes the numbers make sense and a place like you say that doesn't have it's not that we don't want competition but it's just if we're going to if we're going to swim let's swim downstream let's find a place where we can take market share not just a small amount but we've got an opportunity to be a dominant player in the neighborhood so let's get into the numbers all right so really when we're looking at the numbers we're going to look at a couple of things we want to look at the average sales price for the neighborhood i'm going to do this to make the numbers a little easier i mean if your average sales price is higher or lower this will give you an idea at least how to do this so i'm going to use a neighborhood that has 300 homes for sale in it or i'm sorry 300 homes that are actually in the neighborhood on average we should anticipate that we should have 10 percent of that market turnover so we should have 30 sales per year in that neighborhood i'm not even going to talk about the fact that they're a buyer side so really there's 60 opportunities for transactions sides but i just want to focus on the sales side from the listing side because we're focusing on farming a neighborhood so if there's 30 sales and the average sales price is 400 000. that tells us there's 12 million worth of total volume in there now if we're looking at these numbers also let's just use these numbers if it's 400 000 and your commission is two and a half percent just to make it easy that's ten thousand dollars and then times that times let's just use an average split of seventy five percent you're at seventy five hundred dollars net out on an average transaction in there well if we're looking at 30 sales or on average 30 sales in that neighborhood per year if we get 10 percent of the market that's kind of the key number we want to make sure we can get at least 10 percent in the first year we should dominate and do more than that but at least 10 percent if we get 10 percent of the sales that means on average with that average sales price that's 7 500 net out to us as far as commission we're going to have an income of around between 20 and really 22 500 now if there's 300 homes in there i like to use this as a factor to figure out okay what's my expense going to be so what are the numbers to make it makes sense it may not be on the front but i always like to use the number of two dollars per house per month now this is going to be a mix we're obviously going to be using direct mail we're going to be using phone calls we're going to be going into some details on how you can market in that neighborhood in just a minute but on the on the average i figure two dollars per home per month to really market and to farm that neighborhood so if there's 300 houses times two dollars pretty easy it's gonna be 600 per month 600 per month times 12 months because we need to have a commitment to see well i think the way that hunter always says is you got to soak the bait so to speak so we want to make sure that we give it enough time so if we're doing 12 months that's 7 200 not you know with my easy walton county education that's pretty easy to see that if we just take 10 of that market share we're going to have a basically about a 3x or a little more than that on that and it only takes one sale one listing for us to break even for the year and there now we got something we can work with now this gives us back to kind of what does it make sense to do on the next step now that we've found that place that makes sense for us all right so now we've chosen kind of the neighborhood that makes sense the numbers make sense there's an opportunity there's no dominant player now let's talk about how do we become the expert because reality that's the first step finding the neighborhood but listen if you don't know what's going on in the neighborhood you're going to squander opportunities because they will come so what would you do as far as research to start looking at becoming that expert sure i would do a you know a historical deep dive on the community i would go back you know whatever the time frame is five or ten years uh you can you know do this through the mls if you need any help anybody needs help doing that you know they can contact us and we'll help them show them how to do this but i would get the number of homes sold the average price of the home sold price per square foot and days on the market and list price to sales price those are the key stats you know that you need to know so that you can you know um you know have the information so that you can be deemed the expert in the community right and like you're talking about it would basically be a basic spreadsheet that would show those things for each year so it would show the average appreciation on an average on the price per square foot would show how days on market were trending over the last four or five years it would talk about all those different things where you can see those you know i know you've done this for a while i think it's so critically important too is to know the seasonality of those neighborhoods can you speak to that sure sure you know i would have two pages on my spreadsheet in a second i would just have a monthly breakdown of those annual sales you know by month january february march etc through the year so you can see one the seasonality uh and then you can compare you know month over month you can see where the you know do that seasonality where that strength is so when you're talking to someone you can say hey you know it's december things start to pick up you know phone calls pick up after the super bowl maybe and we start to see sales happen in march and april we really need to you know start you know planning for listing this home now so that we can do all the things we need to do so the property be market ready the beginning of february or whatever that is for your particular market and that's something that i've always done too because if i see that three months from now is the peak of the activity you know we were talking about two dollars per month you know there's some months it's just one mailer you know there's some months it's just calling but really where we're ramping up is that three to four month time period ahead of time where we're ramping into that strength we're preparing that we're really almost tenderizing i guess you could say the people so that they know us they begin to like us and they trust us and so as we get through all that now we're getting to a place where now we can really see what those are we can communicate which we'll talk about in a minute the other thing i would do is i would suggest every single place that's on the market that neighborhood go preview those houses get to where you know those houses know which ones have sold know which ones are for sale that way it gives you a better idea that when you get the opportunity and someone calls based on that they say i've got a family member that's coming to town or can you tell me about that house you've been in the house you know what it is you know how to compare it to the opportunity you get to list when you get that where you're that expert and you know the properties you know the numbers the second that the call comes it almost becomes second nature now you've got the details or you can pull your spreadsheet up and say well yeah you know this time it just historically speaking we're about two months out from the peak so if you're thinking about getting ready to sell probably we need to be really thinking about in the next 30 days preparing this to get it ready to go does it make sense yes um i would just say this too once you get to the place where you know how to market and you know how to basically you know the place you're at you know the numbers now you you feel confident in those experts i would say the next step is then the execution of the plan yeah all right so let's get to the execution side of it because really this is where the rubber meets the road um you've got listen you can have all the information in the world but until you take action on it it's irrelevant so now let's talk about a typical plan of action because there are steps there are processes that everybody should be using um so let's talk about that what's the foundation of this as far as the execution data harvest is is the first part you know going and getting all the contacts in that community whether it's through you know the property appraisers website or or some other sites that you can speak to but going and getting you know names addresses phone numbers email address any of that that you can you can get uh or the more of that you can get the better you know so once i've you know got my my information now it's you know deploying the asset which is you know direct mail uh phone calls you know those are the main two items that i would use in my in my uh as my arrows if you will you know to to attack this community and from a perspective of a direct mailer you know i would send them things that were you know just listed just sold you know things that are informational maybe that's not a postcard or something it's just an envelope with your statistics that we just talked about you modify those you know the the home sold the average price um days on market list price to sale price you put that on a you know on a piece of letterhead write them a couple paragraphs where you describe what's going on and uh and send that out periodically maybe some you know in addition to that maybe you rotate in some some things that are happening in the community or in the area just uh as a little little little land yap for them a little extra you know and and then and then making phone calls calling them and just checking in on them seeing how they're doing how they're enjoying their property if they're getting your information if there's anything you can do for them it's very simple you don't have to pursue it to the close on the first phone call just a matter of building rapport so back to your point from that you touched on earlier it's so that they know like and trust us and we get the at-bat when the time comes that's right yeah and i'll say this just from a data harvest standpoint obviously the the actual having the mailing addresses the correct mailing addresses is critically important i would spend some time there like you mentioned tax rolls or there's other through the mls even there's opportunities to get a neighborhood mailing list as far as phone numbers you know fort warren is a great one that you know our local mls provides or it's available i believe for people to purchase also i would say if you're looking at it from a standpoint of making sure that you're getting accurate information as best as possible the phone numbers you're going to refine as you're going through this but coal realty resource is another place to get phone numbers there's tons of activity i mean it does it's not hard to find the phone numbers now nothing's really that private um the the other thing i would say is the ability to find email lists is critically important if you can so if you're if you're going to farm your own community for instance odds are that your hoa has a contact list for everyone in the neighborhood take that information put it into a spreadsheet where you can do this use something like mailchimp do an email and it doesn't cost you anything and supplement that with the mailers uh i know we did this and it's been a situation where that's been very helpful because we're getting you know if you tablet correctly where it's like you know whatever live oak subdivision you know september sales report it's opened at a 70 clip in many cases when the industry average is 16 so the more personalized you can make the email the better um we've even had places where we've had people we've sold to in a neighborhood that give us the hoa listen now i'm not telling you to spam anybody you want to do that that's you know but i've never had anybody complain when we just added value so everything we're doing we're not even asking for business to be honest in those emails from that standpoint it's just here's our active pending sold here's an update on the average sales price it's sharing that document that you're talking about where they can get an idea that you really are the expert and then just being systematic a couple of things i would just say that are just you know and then we're gonna get into some creative ways to market in these neighborhoods every month something needs to go out every month the mailer needs to go out every month if if at all possible and email needs to go out every month call needs to go out now the calls there's a couple ways to do this there's no way that it's any better than if you talk to them on the phone this is not do you want to list your house what would what would you say that conversation would be on those initial calls it's just you know introducing yourself asking them you know hey i see you own a property in forest lakes how are you enjoying it yeah and let them talk people are excited to talk about their property at the beach you know most of them don't live here you know and then and then just after they answer that question say hey have you been getting what i've been sending you something like yeah okay well great um you know ask them if you know if they find it relevant if they enjoy getting it let them talk and then just kind of you know adjust to what they say and then just you know softly say something you know towards the end is is you know do you mind if i continue to to to send you things call your period i'm not going to bug you all right hammer yeah yeah this is not the way i do this i'll check in with you you know every month two months six months what's best for you right and and really tailor your approach to them and you'll find that they're usually very open to that yeah i would say this too i mean i think it all changed for me when i got to a point where um you know you and i grew up in the original time frame when we started it was abc always be closing and it's just that's tired it doesn't work anymore and so when i made the switch to where it was just i just want to talk to people i just want to see if i can help them today provide them information that's all it is there's no there's no pressure on me there's no pressure on them and i will tell you the second that i did that that's when everything began to switch to where those conversations begin to really move them down that know like and trust um and so once that happens i mean it's really just hey if you don't mind me keeping up with you i'll check in with you every six months hey i do an email report if you don't have an email address you know for them and just i do a monthly email report um love to keep up you that way if that's something that you're interested in most you know if you're cool they'll be cool usually so it's a way to reach out and really just start building that and you've got to understand it's the averages are it takes seven to ten impressions of someone seeing you before they recognize you so you have to understand that when you send your first mail around i know most people the first time they said i did it they send their first mail around they're like why have i got a response it's going to take some time it's going to take some repetition on the front end i would say this is another way especially if you've got time is to don't necessarily have to send them postcards like everybody else some of the most effective things i did was i would i would send them a letter and an envelope and hand address it now there are some things out there if you'll just google you know handwriting software where you can send in your stuff send out cards as one it will actually use your handwriting and cursive writing to do that that personalized will get it open a stamp that's put on it versus that and listen some people like well i don't have time for that that's fine if you don't have time for it but if you're trying to build and you're trying to build rapport i promise you those are going to open more and recognize more yeah it does and in addition to that just another creative kind of touch for that as i would write thank you cards yeah folks if i spoke to them on the phone right they took the time to answer the phone and talk to me i wrote them a handwritten note and put two business cards in there and it was as simple as saying hey thank you for taking the time to speak with me the other day you know if there's ever anything i can do for you your family or friends don't hesitate to contact me and close these two business cards sincerely price yeah and just so good and let me tell you some creative ways too because these are things really where you just take the next level because there are a lot of people that are sending mailers but they're not following up with phone calls that's the gas on the fire social media the next way is to really get involved in that community so here's some things that we're seeing uh right now i'm seeing in a number of different places a food truck night that you sponsor so listen if you've got 300 homes there everybody's that's going on have a night where you coop with the hoax hey listen i'd like to sponsor having this in here i'm going to take care of getting them there i'm going to provide desserts or whatever it is you're going to do or you're going to pay for you know half of the meals i mean it's worth it you know literally to do something like that to get yourself out there whatever it is for you and your budget deems but doing that and then have your whole team there brand it up be there and just be there just to meet people talk to people just say hello introduce yourself it's a great way right now another one is if it's a neighborhood that has a lot of children in it do a saturday where you've got an ice cream truck that comes and have it where you know literally you can be the one that's walking with it hand those out to those kids that families are coming out attach something that brands it up for you that's going to be taken back to the house or as the parents come out and introduce yourself to them set up for an hour to utilize that if you co-op it with the hoa then the hoa will get the information out for you which is you know it's almost like they're signing off on you being the expert in the person for the neighborhood if you find a neighborhood which is hard to do these days if you find a neighborhood that does not have a facebook community group set it up yourself be the administrator get it out let some of the owners or friends that you have in the neighborhood begin to share that everybody joins in it becomes the centralized spot for information for the neighborhood as the administrator you control the information i would not go in there blasting people with sales data but i would every so often say hey we've got a house coming on the market and we wanted to make sure everybody had a chance to pick their neighbor first so before we put it on the market next week if you guys know anybody let us know you're showing them activity but you're not slamming it on them if that makes sense um and then also hoa meetings um be willing to sponsor lunches be willing to say hey listen i know you guys have got this i would like to send a food truck and buy lunch for everybody at the hoa meeting something along those lines and i'm telling you when you get people want somebody that's involved in their community you know they they don't do business with a mailer you know and we used to talk about this where it was the you know people you know if you're looking at it from a standpoint of is everybody used to be i'm number one i'm this i mean you can do that for everybody people don't care anymore they you know it's the old maya angelou people don't care how much you know until they know how much you care so present yourself in a way to that neighborhood go in there and do those things listen i want to wrap this up and just kind of put a bow on this in a real kind of practical way the biggest thing is you got to pick the right neighborhood do it for 12 months have it that way some of the best people will take three neighborhoods they'll do the same messaging the same program for for nine to 12 months and then they'll figure out this one's a winner i'm gonna keep that i'm gonna plow one here and i'm gonna get rid of those that aren't or this one these two are good whatever it is be knowing that you're in a neighborhood where there's opportunity first you gotta be in the water to catch the wave find the right waves the second thing is know everything about the neighborhood know it backwards and forwards and then lastly make sure that you're presenting yourself in a way that is helpful to those people direct mail phone calls being a part of the neighborhood if you do those things man we've seen it i mean every single time we've ever done this it's not it's an if-then proposition anything you'd like to add as far as farming and the need for it i mean no i mean just just do it just just pick the area deploy the things we've talked about here today and you will be successful i think you said it i mean it's an if then if you will do these things then these things will happen and we've done it time and time again where we've approached new communities and deployed these tactics and we've gained market share every time we've been consistent with it it doesn't work a one and done or a two and done you gotta commit to the process if you will it's tried and true it will bear fruit i will say this too you know we talked about running the numbers on the first year a minimum of gaining ten percent you know we've done this you and i've done this where we're getting 40 50 of a neighborhood within 14 months and the numbers get stupid then so it's really just the execution of finding the right places listen guys i hope you got something out of this if price or i can help you don't hesitate to reach out we'll talk to you soon you

Channel: Jimmy Burgess

Views: 5,873

Rating: 4.9085712 out of 5

Keywords: Real Estate Farming, real estate farming strategies, realtor farming ideas, real estate farming a neighborhood, real estate farming ideas, real estate farming tools, real estate farming tips, real estate coaching videos, real estate agent at 18 years old, real estate agent part time, real estate agent beginner, real estate training for new agents, real estate marketing plan for listings, real estate training course, Jimmy Burgess, Real Estate, real estate agent coaching, realtor

Id: R7F5XWVMFeo

Length: 21min 20sec (1280 seconds)

Published: Sun Nov 29 2020