It is estimated around 30-40% of real estate agents will go out of business during the next recession.
Why? Because they do not know how to pivot when the market changes.
On my YouTube channel, I talk about 4 main niches to go after when the real estate market shifts.
Short Sales, REO’s, BPO’s & Property Management. You can also check out all of those videos pertaining to these target markets on my YouTube Channel.
So, what is my team doing now in 2020? You got it. We are marketing for short sales and property management.
Why property management? You will find that when the real estate market flattens or decreases, many people cannot sell based on their equity position. With closing costs tacked on many would have to come to the table with a check at closing.
Leasing their property is an easy alternative. And there are many real estate investors out there who just want better, more reliable property managers.
Also be sure to stay to the end as I give you a solid tip that we are doing right now to get multiple rental listings from the same investors.
Also, if you like real estate, investing, passive income and financial freedom, then you may want to consider subscribing. I’d appreciate a thumbs up to support this channel!
Ok. When the last downturn in real estate, I had a meeting with my sister who was already leasing property out for our investors.
I said, people are unable to sell right now and I think we should scale this right now. At the time we had only around 15 properties under management.
However, in less than a year, we created hundreds of thousands of annual revenue to our bottom line from property management.
There are so many benefits to property management including:
- Create a predictable residual income. Think about it. If you are charging a 10% property management fee and your average lease rate is $1,500 and you have 20 properties that will equate to $3,000 per month, every month.
- Property management will lead to the creation of real estate sales from it. (Landlord Sells. Landlord Buys. Tenant Buys).
- Additional profit center for property management maintenance. If you have the right partner, consider opening a maintenance department. Have 1-2 handymen part of your team who you can even outsource. You or your partner put forth the work to check out the issues beforehand. Hire the appropriate contractor or handyman. Then confirm the work has been satisfactorily completed. This is peace of mind for the landlord and you can charge 10% for this on the gross bill. Many landlords have no problems with this arrangement as at the end of the day, due to our relationships, we get better (bulk) rates due to our volume. So they would be charged around the same amount without the maintenance fee in most cases without us and without the oversight.
- You can eventually sell your portfolio. That’s right. Where there is revenue, there is opportunity to flip the business. For example. Let’s say you grew your property management division to 100 properties. And let’s say after all costs you netted $250,000. You could potentially cash out $750,000 if this was valued at 3 x net.
How can we get in front of these people?
Well, it is fairly easy once you have the right data source.
- If cold calling, you can use a system like RedX. Cold call GEO areas and ask if they currently are leasing their property. If they are, ask if you can send them information on what you do to manage properties. The link below will waive their $149 sign on fee for REdX!! Explode your business right now!
- You can cold call For Rent By Owners from property signs, Craigslist Ads and other online ads marketing their properties for rent.
- Data for mailing can come from internal systems provided by your MLS / Board, a wholesale printing company or your property appraiser office.
- And one of my favorites is specific mail marketing for lease listing inventory. For example, my team is currently mailing owners who own 3 or more properties in certain zip codes over a certain appraised value. This goes for the same for multi family 5+ unit apartment complexes. This is a great way to get multiple units from one investor. To date, our largest property management deal was a 41 unit apartment complex. However, that project came from one mailer to owners of apartment complexes which cost us around $650. This project resulted in several thousand dollars a month for a couple years. And we tracked it to about 5 real estate sales as well from the tenants. That property has since changed hands and we no longer manage it.
If you are a real estate agent interested in making property management part of your niche by building a predictable business, then check out the video below.
** All of my DAILY GEAR for Real Estate **