1. Agent Mechanics
SPECIAL REPORT:
3 KEY REASONS
WHY EVERY AGENT
MUST HAVE
A PROPERTY
MANAGEMENT
DIVISION
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2. Agent Mechanics
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© 2010 by REI Training Corp. All rights reserved.
Published by:
REI Training Corp.
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3. Agent Mechanics
SPECIAL REPORT
3 KEY REASONS WHY EVERY AGENT
MUST HAVE A PROPERTY MANAGEMENT DIVISION
What you will learn in this Special Report:
• How to explode your real estate sales
• How to achieve more personal freedom
• How to realize continuous and predictable cash flow
Every real estate sales person uses some kind of prospecting tool. Some items that come to mind
are print advertising, community outreach, social networking, door knocking, and farming.
All of these can be effective; but none of these can explode your sales, help you achieve more
freedom, and realize continuous cash flow like using property management as a bolt-on to your
existing real estate sales business.
BENEFIT #1 - EXPLODE YOUR SALES
Although we all call this property management, you should always be looking at it as a lead
generation tool for sales.There are a number of reasons that
Huge customer loyalty:
What happens when you have a client who’s home won’t sell, but they need to move? Is it
possible they may decide to rent that home instead of selling. So who do they turn too? You.
But you don’t do property management, so you refer them to another company. That company is
going to bond with your seller. And when it comes time to sell, who is the seller going to turn
too? That other company.
Doesn’t it make sense that it is you that should be handling 100% of the real estate market place?
Shouldn’t it be you getting paid each month while the seller waits for the market to rebound?
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And do not forget that you can bond with tenants as well. Maybe you have a buyer who’s credit
is not as good as it needs to be in order to buy. Place that tenant in one of your rentals, help them
with their credit repair, and keep them informed about the market.
Who is the buyer going to use when it comes time to buy? You. Why? Because they have
grown to know, like, and trust you. They couldn’t think of using anybody else.
Finally, what about investors? In today’s marketplace there are many investors out there. Why
not promote yourself as the “go to” resource for investors in your market? You can sell the
investor the property, manage the property, and then resell the property down the road. Imagine
the amount of money that you could make over the course of that relationship. What kind of
difference would that money make to you and your family?
No longer prospect cold leads:
When you cover 100% of the real estate market all calls become warm leads. Unlike your
colleagues, when you contact “expired listings” or “for sale by owner” customers it is with a
completely new message. You cover 100% of the real estate market place so no matter what they
do you have them covered.
Leads call you:
When a property owner calls to inquire about renting their home you already know they want to
take action. The only thing you have to determine is if they really want to lease, or would rather
sell with you.
The same situation is true with tenants calling on signs. Do they really want to lease or wouldn’t
they rather buy? Do they know about all the special financing options out there that could make
them homeowners?
Double your referral database and sphere of influence:
You will be receiving calls from the other 50% of the marketplace that you don’t currently cover.
Those callers are customers that are now in your database.
You will also be able to go out the marketplace and re-promote yourself and your newly
expanded business. If you were looking for a great reason to call on your past customers, here it
is. You will be the new go-to resource in your community for all things real estate.
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Expandable into new markets and territories:
Property management is an excellent way to expand into new territories and markets. Say your
the king of West Town real estate and you want to go be the king of East Town real estate. But
East Town has already got a king. This is a great way to fly in under the radar.
You put up a couple lease signs, when someone asks you what kind of experience you have in
East Town you say, “I do lots of real estate transactions in East Town. No one knows more about
East Town than I do. If you want to invest in East Town, there is only one way to invest in East
Town and that’s through me.”
BENEFIT #2 - ACHIEVE MORE PERSONAL FREEDOM
When we talk about real estate, having freedom, it’s not a word that comes up very much. But
that’s one reason we got into this business, for the freedom. One of the nice things about the
management business is that it pretty much runs itself.
Build a team:
Show of hands. How many people have a staff? Great, they’re going to run this business for
you.
How many people don’t have a staff yet? Great, you’re going to have plenty of extra money to
hire one. And the added benefit? They’re going to do some of the other work you’re doing on
the sales side now. That’s even more freedom for you.
You’ve heard from many experts that there’s a difference between working in your business and
working on your business, right? If you’re working in your business, you’re the employee of
your business, right? Did anybody get into this business to be an employee? No, we got in this
business to be owners. We’re the boss. If you want a transition to being a boss, you’ve got to
start working on your business. So that means you’ve got to go get people to work in your
business.
When I was an agent, when I was hiring my first assistant, I was absolutely scared to death to
know I’m going to have to come up with $15 an hour for that person. What if I don’t sell a
house this week? What if I don’t sell a house for three weeks? Am I going to spend three months
training somebody during the summer when it’s busy and then in December not have a sale for a
couple of months and now all of a sudden have to lay this person off?
When you’re managing properties, getting the monthly cash flow, it’s paying for that assistant.
So now, if you don’t sell a house for a few months, do they still get their paycheck? Absolutely
and you get the benefit of having them do your other work.
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So now you can be a more effective agent. Are you more effective processing paperwork or are
you more effective converting leads into sales? Well leads into sales, right, because that’s where
your talent lies. If I could give you 10 to 20 hours more time per week to prospect, would you
make more money? Of course you would.
Do you have a buyers agent? Would you like to have a buyers agent, or an additional buyers
agent? Your buyers agent is now also your showing agent.
If you’re not in a position where you do a lot of business yet, you’re going to be. If you had a
showing agent, you could have that person show the rentals because a good showing agent is
always previewing property, whether it’s for sale or rent or if it’s a model home, it doesn’t matter,
they need to be learning the neighborhoods.
Second, you don’t have to pay them anything because what happens is, these people that are
calling in, they’re going to be buying a home at some point. Your showing agent is supposed to
be building relationships with them anyway. When that caller buys a house from them, that’s
when your showing agent really gets paid. They now have an incentive to convert callers into
buyers.
Also, these rental properties give your showing agent a fantastic opportunity to do open houses.
Across the country, open houses are still huge. So your showing agent, could they or could they
not, hold a very nice home on 123 Cherry Street open for a rental? Absolutely they could. If
somebody wants to buy a home from them when they get in there, is that okay? Probably. If
they want to rent that home, is that okay? Absolutely, that’s their job.
So now you have an assistant being paid for, and if you wanted to, you don’t have to, if you
wanted to, you still have the income to pay your showing agent a salary.
Continuous flow of leads:
Because you have a continuous flow of leads you have the freedom to grow your business, or
even get away from your business temporarily. Another way it gives you freedom is these
prospects that you’re talking to, you know when they need to move. You don’t have to wait for
somebody to call you and say yeah, I’m moving in the next week, come on over and put my
house on the market. So you can plan accordingly around your sellers that want to sell. You
know what needs to be done, when it needs to be done.
So, if you want to go to Costa Rica for a week, and you know Mr. Smith’s lease is up a few
weeks before that, you know you need to call and set the appointment to list that home for sale
before you go. Now you can easily plan your time and are still available to do what you want
with your family.
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By the way, the smartphone is a very valuable tool. We use web based software to manage our
company. So whether I’m in California or Costa Rica, that tells me what I need to know. And
that helps me achieve more freedom too.
Remember back when we used to mail a letter, then we faxed it. With the mail we used to have
like two or three days to respond. Then the fax gave us like a day. Now we have e-mail and the
expectation of instantaneous communication.
So, one of the things we use to achieve more freedom in our daily business, but make people still
feel like they’re being contacted, we use auto responders. If someone communicates with us
about a rental through our website, I want to see this house or I want to know something else or
how much is my house worth, they get an auto responder immediately. “We got your message,
we’ll call and talk to you shortly. Meanwhile…” or, “Thanks for the request, we’re going to do a
quick market analysis for you and let you know. Give us 24 hours, meanwhile make sure you’ve
seen the virtual tour on my website, drive the neighborhood, ...”
Do you think that, other than answering their question, do you think that’s the last contact I’m
giving them? No. They get automatically enrolled in my drip campaign and for the next 12-
months, they’re going to receive information by, from, and about me.
This is just one method that you can use when you get back to your office, in order to stay in
better contact with your clients. Make them feel like they’re being contacted. Meanwhile, am I
in my office? No.
And by the way, they’re pretty impressed when they get a quick response back from you. I’m
with my family at the lake, watching the kids swim and I’m still impressing the hell out of
clients.
Business prospects for you:
The management business actually prospects for you. How does it do that? Here are just a few
ways: your website, print advertising, social networking, car advertising, for lease signs just to
name a few. Every place you advertise sales, you could say “and management.”
Does it make sense that everywhere you have a sign hanging you are buying braincells? And
does it make sense that the more signs you have in the community, the more successful you
appear? And is it reasonable to assume that people are going to call off your signs?
For us, those signs are bringing in business. We give our staff the right scripts to convert tenants
to buyers and owners to sellers. The business is actually prospecting for us, and it can do the
same for you.
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BENEFIT #3 - REALIZE CONTINUOUS AND PREDICTABLE CASH FLOW
There are a bunch of ways to use property management to generate continuous leads: website,
print advertising, community outreach, sphere of influence, social networking, flyers, mailers,
signs and riders, open houses, door knocking, expired listings/FSBO/FLBO, and car signs. And
what do continuous leads lead to? Continuous cash flow!
Let’s talk about the different ways to make money in this business because there’s more than you
would think. What are some of the ways that you think you can make money in property
management?
Management fee income:
Let’s just say you were proactive and got 25 homes times $1,500/month times 10% is $3,750 a
month. Could you could pay your assistant’s salary with that? Of course.
Okay, great. So, if an extra $45,000 a year sounds good to you, raise your hand. Alright, well,
that’s not good enough.
MLS:
Let’s say each home is $1,500 a month and we’re going to get 3% of a year’s lease. That’s $540.
How many times could you do that? Maybe a couple of times a month? Should we put $1,080?
Okay. $1,080 times 12, that’s another $13,000 a year.
Do you think an extra thirteen grand could pay for an awful lot of your advertising, website, 800
numbers, long distance bills, things that you’re not currently doing now? Could this pay to wrap
your van, to put stickers on your cars? Absolutely.
Lease only:
No matter how smart using a property manager is, there are still people who want to be their own
landlord. We get a minimum of $1,000 to find a tenant for a property. So if we’re doing two a
month, that’s $2,000 a month, $24,000 a year.
Is this number looking a little better? We’re up to $82,000 now. Great, we’re on a roll, you like
this? Yeah, okay. Now what else?
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Marketing/advertising fees:
Do you think your showing agent might be trainable to go put these people’s homes on the
market if you’re in the Bahamas? We’ve got a full-time person that does it for 250 bucks a pop.
We average ten new properties a month. But let’s say that you get two new full management
properties, and two lease only properties a month. That’s four properties. And, let’s say you did
it yourself. That’s another 24 grand.
Now we’re over $100,000 a year. Raise your hand if this number is getting a little better. Raise
your hand if you made more last year in real estate.
If you never sold a house next year, could you live off an income like this? This is what we’re
talking about, this is what’s going on. And we aren’t done. What other sources of income are
there?
Eviction protection plan:
What are owners most scared of these days? Eviction. You’re going to enroll them in your
eviction protection plan. We charge $15 per owner per month. Let’s multiply that by the 25
homes from earlier and that’s $4,500 per year.
What are we going to do with that? Oh yeah, that’s our vacation for our family in Cancun.
Alright, now what else?
Vendor income:
What if you charged 10% on top of every invoice for maintenance and repairs. They’re doing
$3,000, we’ll get $300. That’s another $3,600 a year.
What else?
Late fees:
There’s another couple of grand. Now we’re well over 100 grand a year. You see how you could
make a good living at this folks, without ever selling a house. Take all of that out of the
equation; take real estate out of the equation. Could you live off this? Yes. Now, add whatever
sales you did last year, double it, that’s what can happen to your business next year.
And we haven’t even talked about rent protection plans, inspection fees, renewal fees, and re-
keying fees.
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Some of these things we have been talking about, could you probably implement that? Could you
call for a lease by owner? Could you call a for sale by owner? Could you run an ad? Could you
put a sticker on your car? Could you do some of these things? I thought so.
Alright, forget it; let’s say you didn’t do any business last year. Let’s say you’re generating ten
sign calls a month. We’re contacting 20 people a month. There’s 30 contacts a month. We’re
sending out 100 mailers. Do you think maybe we could get five leads?
On top of the over 100 grand a year that you’ve made, how many additional sales that you
wouldn’t have otherwise gotten, are you going to get? That’s where this whole thing comes from;
they’re going to double your business.
If you start doing 100% of the business, you’re business doubles. So if you sold 20 homes last
year, you’re going to sell 40 next year. That’s it, plain and simple. You’ve got twice the leads,
twice the database, twice the sphere of influence, twice the everything. It’s pretty logical that
you’re going to sell twice as many homes.
With less effort, absolutely no overhead, plus a tremendous income. Would you agree that this is
a better real estate model than 99% of the models out there right now? Is there any reason you
wouldn’t or couldn’t do any of this?
You think you won’t have time for it? It won’t take you anymore time. I just showed you how
you’re going to have more time and your staff will be taking care of your every need.
You think you don’t have the money for it? It pays for itself. I just showed you how the income
from your management business not only pays for itself, but also pays to support your real estate
business.
The person responsible for your management website and advertising is also doing your real
estate website and advertising. The person responsible for your management showings is also
doing your real estate showings.
The management business is putting money in your pocket, financing your staff, and giving you
more free time. It couldn’t get any better, but it does.
Have you always wanted to do passive advertising, or print advertising, or postcards? Do you
think those kinds of things would help you sell more homes? This 100 grand a year can do a lot
of mailings, can do a lot of print advertising, can do a lot of house advertising, can do a lot of
whatever you want. You see folks, this is the way you do business.
It took us three grueling, expensive, mistake making, lawsuit threatening, you name it, years to
get where we are. But what if I told you you could have this business up and running in the next
30 days. We did this and it took us three years and we can show you how to do it in 30 days.
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ABOUT AGENT MECHANICS
At Agent Mechanics our goal is to teach you how to explode your real estate sales, achieve more
personal freedom, and realize continuous and predictable cash flow. Agent Mechanics offers a
myriad of training product. Our Agent Cash Flow Secrets series teaches you everything you
need to know about starting, running, and operating a successful property management business.
In addition, our patented Fast Track Day can have you up, running, and making money in less
than 30-days.
Agent Mechanics lead trainers are Mike Bjorkman and Scott Taylor. Mike Bjorkman has been a
real estate agent for 20-years. He is also a real estate broker and investor. Mike has completed
over 4,500 real estate transactions and has been in the RE/Max 100% Club for last 15-years. In
addition, he is part of RE/Max’s Top 1% in the Nation, a RE/Max Hall of Fame Member, a RE/
Max Chairman Club Member, and a RE/Max Platinum Club Member. Along with his business
partner Scott Taylor he currently manages over 200 residential properties.
Scott Taylor, A.K.A. America’s #1 Landlord Resource, is the author of The 15-Minute Landlord
and a recognized expert in real estate investing. In addition to being a real estate author, lecturer,
and trainer, he is also the co-owner of the property management firm SCV Leasing in Santa
Clarita, California. He owns many rental properties in several states. Scott brings depth and
clarity to owning and managing rental property through his writing, speaking, and teaching. He
has a knack for describing complicated ideas in simple ways that makes learning fun and easy.
You now also understand:
• How using property management leads to increased customer loyalty
• How to build a real estate team that pays for itself
• How to make over $100K a year in real estate before even selling one home
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