Selecting a single target market is a key principal to the 8-Profit Activators as fear of missing out makes most people try to target as many people as possible. Selecting the right group can make all the difference as your message resonates with those people. It gives you someone to focus on as you create points of engagement. It is both an art and science though, and it’s good to remember that being too specific could be costing opportunity too.
Today we're talking with Brad Lazarus. I met Brad more than five years ago when he was one of the people at the very first Breakthrough Blueprint event I did in London.
Today Brad owns a property investment company in the UK and we had a really great discussion about Real Estate, and the psychology behind what's going on in the minds of people who have a problem and need to sell a house. Specifically investors, or those who own investment properties which is Brad’s target market.
You'll notice in this conversation we started out going into a very specific target audience, crafting a solution specifically for those people. But then, when we took a minute to back up and look at the higher level, macro view of the business to see what's actually going on, where the transaction is taking place, and what Brad's role in that transaction is, we came upon a really elegant and much broader opportunity for what he's doing.
Sometimes taking a moment to look one ring out, a level up from the micro focus of the specific problem you're trying to solve, can reveal an even bigger opportunity, and create an opportunity for even more people.
I think you'll really enjoy this episode. It seemed to go by really fast.
Brad: Dean, how are you?
Brad: Yeah, I'm very good, thank you. Good to talk to you.
Dean: It's good to talk to you. It was nice to see your name come up on the list here.
Brad: Good. I'm pleased. Yeah, I saw you last time in a bar in London. Do you remember?
Dean: That's right, as I do.
Dean: Relaxing in bar in London, as I do.
Brad: I didn't want to judge, yeah.
Dean: That's so funny. I'm excited to chat. We go way back. You were at the very first Breakthrough Blueprint I did in London.
Dean: ... a rainy November of 2012, I guess, something like that.
Brad: Yeah, I think it was, with Gavin, who subsequently went to every single one after that, who I speak to weekly.
Brad: Yeah, good friend of mine.
Dean: Just saying, you're absolutely, you're welcome back. We come back all the time in June, so put it on your calendar.
Brad: Yes, absolutely. Yes, it is in there. Yeah, Gav always reminds me of it as well, so yeah, I'll look forward to that for sure.
Dean: Awesome. Catch me up because there's been a lot of changes in stuff you're working on, so tell me everything you got going on and what kind of evil schemes we can hatch today.
Brad: Absolutely, for sure. The business that I really want to talk about today it's in your, the realms of real estate. Obviously, in the U.K. we refer to it as property, but essentially we are a property sourcing business. The bottom line is we source property deals, and we package them up, and we sell them to investors for a fee.
Brad: Yep. That can be anything from the types of deals that we're looking for, we could get them through estate agents, but we tend to like to go direct to the vendors, to the homeowners, or we'll go directly through to the landlords. Each deal, there's generally a property problem that is involved in the deal. It's the reason that the seller might want to sell for below the market value. The landlord might have an issue with the fact that he's always going into tenant arrears, he can't maintain the property for whatever reason.
There's always a problem around it, so what we do is we have a tool box, if you like, of property solutions, creative property solutions, and we'll apply, we'll talk to that vendor, that landlord, and we'll look to see what the problem is and then try to apply a solution that gives both parties a win-win.
What I really wanted to see if we could try and focus on today was, in the U.K. at the moment there's been a lot of upheaval in the buy-to-let market, so essentially investors buying property to let to tenants for long-term cash flow investments essentially. What we see happening, so there's a lot more regulation around it now, so what we see happening over the next few years the belt is essentially going to be tightened on landlords, and the bottom line is a lot of them are going to have to pay a lot more tax, and they don't quite realize that at the moment.
What we're looking to do is essentially look to see if we can target them as an audience and then look to help them with one of our creative solutions essentially. Yeah, that's the bottom line.
Dean: Okay, so that's the big picture here. Let's take it to a specific situation then. Let's take right from the top here. Who is our, in Profit Activator One, our specific target audience, and what is it that we're going to do for that person?
Brad: I would say that the audience really is ... Well, the audience could be a landlord, but it could also be a homeowner. I think I really want to focus on the landlord as I see that's where the opportunity is for us. This is a landlord. Let's give him a rough, let's say call it avatar, so he might be a dentist or a doctor, for example. Over the years, he's been buying maybe three, four, five properties for his retirement, for his pension, to top up his pension income. Now all of a sudden, the government have decided that they want to tax him on the full rental income that he's achieving on that property rather than the rental income after interest costs of his loan.
He's then going to now find himself, let's say he's the dentist, he's going to find himself in a scenario where he's earning ... I don't know. Let's say he's showing 85,000 pounds a year income, and he was getting maybe 10,000 a year from his property, so he was showing 90,000 on his tax return. Now, instead of showing 10,000 from his property income, he's going to be showing maybe 25,000 or 20,000, so he's going to potentially go up into a higher-rate tax bracket. That's going to happen with a lot of amateur or let's call them semi-pro landlords or property investors.
Dean: Okay. Is that a new development? Is that something that is coming or is now already enacted, or when does it take effect?
Brad: It was in the budget maybe 18 months, two years ago, but it's a tapering-up effect, which is really going to start in April probably next month, and then slowly the loan, the mortgage interest relief will slowly erode away, if you like, up until 2020.
Dean: Okay. Over three years, phased in?
Dean: Okay. What is going to be the solution to that? Everybody who bought a rental property ... I guess it's any rental property, right, if they bought it prior to ... When did you say it starts, April of this year, April 2017?
Brad: Yeah, around about, yeah, in the next month or so, yeah.
Brad: I should also say as well that it's not entirely, that might not necessarily entirely be the reason why they have a problem. The normal kind of landlord stuff also applies, right?
Dean: Yes, I got it.
Dean: Yeah, but that's something that they may be wondering or they may not know about it, but let's say that that's ... Everybody who bought an investment property before April 2017 is going to be in that situation. Nobody is grandfathered in. It's just the way it's happening, right?
Dean: Okay. That is going to affect 100% of the landlords right now who have a mortgage on their property.
Brad: Yeah, I would say yeah. Essentially, yes, if they bought them in their own names, if they bought them private. If they bought them inside a company structure, then these rules don't necessarily apply. The normal taxation rates of the company would apply, so 20% corporation tax, essentially.
Dean: Okay, perfect. Okay. Is that, I'm hearing part of the solution here, right? Is that part of the solution?
Dean: Of course. Well, it's very unlikely that somebody's going to own 15 properties in their own name anyway if they're at that level, right?
Brad: Possibly, yes, yeah. That could be the case, yeah.
Dean: Yeah, making all the right moves.
Brad: Exactly, making all the right moves, doing all the right things, thinking they're doing all the right things, but a lot of them don't have their ear on the ground to the latest property regulations. For a lot of them, the first time that they're going to hear about this is when they have a meeting with their accountant to talk about getting the books together for the end of the year.
Brad: That's the distinction I think between the let's call it the amateur landlord, if you like, and the professional landlord.
Dean: Okay. Then, what are the availability of lists and being able to identify these people? Are you able to get a list of people, of landlords who own properties in their own name?
Dean: The privacy is different, right? Yeah.
Brad: Exactly, yeah, but there is one list that you can get, which is an HMO list of landlords. HMOs are houses of multiple occupancy. It's where you turn a three-bedroom house into a five or six single let, so you turn a single let into a house of multiple occupancy where it's six lets, let's say, so six rooms are rented out individually as opposed to the house previously. You need a license to do that. That's where those lists are, but those lists tend to be quite hammered by property sources and investors looking for deals because it is the only list that exists.
Dean: Right. If you've got those people, what's the catalyst here that's going to create the momentum for somebody to recognize they have a problem or to have something that they want to solve or a result that they want to get?
Brad: The catalyst. Well, I suppose in terms of the tax changes, that may be the headlines in the news, imminent, implement, that the changes are imminently coming, the conversation with the accountant maybe. The other catalysts are around this idea of the general issues associated with being a landlord and maintaining properties yourself.
Dean: Yep. A lot of those things, whenever there's a change or a government type of regulation or something that can be involved, one of the things that we've often done is do a public notice type of announcement, like say a public notice, "If you own investment property prior to April 2017, read this," like this kind of calling out to that person. We've done that same thing with a lot of different scenarios where you're calling out to that person and then saying, sounding that every time there's a change, it's a catalyst.
We've done a lot of that with Social Security, for instance, here, where if we were saying, "If you or your spouse plan on collecting Social Security after April 2017, read this." It's really calling out to the people saying essentially things are changing. People want to know, "How's that going to affect me?" You get a chance for people to raise their hand, and you almost create the guide or the handbook to the new rule changes and how to benefit from them, if you were saying, "Here's what's going to change, and here's some of the solutions," almost packing it up kind of thing, packaging it up as a consumer awareness guide in a way.
Brad: Yeah. We played around with the idea of ... When we were trying to generate leads from sellers, we created a website called The Property Advice Service, which we had a .org domain to it and put some useful blog content. It's like a Citizens Advice Bureau for property, that type of thing. This is almost in line with that to a certain extent, isn't it?
Dean: ... that they would, yeah, leave their contact information to download or to get this guide. It's so effective if you can ... We've been doing a lot of this with postcards. I think even with that list, if you say the HMO list, and you're saying that they get hammered by people, what would be the kinds of things that they would get from that if they were to get something in the mail? Who's hammering them, like you said?
Dean: "We'll buy your house."
Brad: Exactly, "We'll buy your house, or we'll guarantee your rent," because one of the strategies is that the investor will guarantee the landlord's rent and then they'll look to add value to the property by doing a light refurb on it to increase the market rentable value of it and then take the margin on it. There's those.
I think what tends to happen in the messages that tend to go out in property investor circles in the U.K., what I've noticed essentially as a marketer, is everybody's just targeting the acute pain. They're all just going straight ... The marketing piece, the message on the marketing piece is really just targeting the jugular from first go. That's where I see the opportunity is in. You always talk about the idea of a bundle of 100 leads, and the idea of taking 50% will never be interested.
Brad: See, I've been listening to you over the years, Dean.
Brad: 50% will never be interested, and then 1%, no, maybe 10% will want to take action now. Then, your opportunity is in the educating and motivating the other 40% that remain, right?
Brad: I think what happens in property in this country in terms of looking for property deals is that investors really only are targeting the 10%. Their message is there just to attract the 10%, and I think for me the opportunity is in that 40%.
Brad: Yeah, roughly. Yeah, generally speaking, yeah.
Brad: Yeah. You can see multiple property license holders.
Dean: Okay. There you go. You've got that thing. You'd also be able to see which ones are individuals versus LLCs, right?
Brad: Generally not. You can make an assumption.
Brad: You could make an assumption based on the address, because if the address is the name of a company and an office address, you could make an assumption of some sort possibly.
Dean: We're just trying to stack the deck that that's the way. I think that there's that opportunity to use that, "If you invested in a multifamily property before April 2017, read this," and go on and talk about the changes that are happening, and they can get the free guide. That would be one approach to engaging in a dialogue with those people, but I want to push the pause button for a second and get to the rudimentary thing, because we got into a very specific scenario of why somebody would be there.
Let's go out macro now a little bit and see where do you make money, and what's the actual transactional thing? We picked one very specific flavor of how that happens, but essentially what's the core of what it is that you benefit from?
Dean: Yeah, your business. Yeah, where do you make money? Let's look at that as opposed to looking for this one micro thing of how that actually happens. The fundamental thing is anybody who wants to sell their property quickly. It doesn't have to be an existing landlord, right? You're just looking for people who want to get rid of their property.
Brad: The property owner, yeah.
Dean: Yeah. Regardless of whether they're a landlord, right?
Brad: Exactly, yeah. Essentially, we make money either when we keep the property for ourselves and keep it in an internal portfolio, but more often we will package the deal up and then offer the deal to another investor, who, if they want that deal, they'll pay us a commission to take the deal. Essentially, it's like an off-the-shelf property deal for them. That's what’s generating the lead. We're doing the analysis on whether the deal is the deal. If it's not one creative strategy that we can apply to solve the problem, we'll look to the tool box and find another one.
Whichever one works to give a win-win for a potential investor and the property owner, we'll go with that one and, as I say, package that up and pass that to the investor, who will then pay us a fee for it.
Dean: Okay. There's something, it's an interesting thing that you're packaging the ... When you say keeping it to yourself, do you have a fund? Do you hold properties yourself as part of a group, or when you were saying that keeping them yourselves, what are you speaking about?
Brad: Yes. Occasionally, we'll keep a few. For example, depends how much cash is required or whether we need to borrow in order to control the property, if you like, whether that's buying it or controlling it. There may be an opportunity whereby we can just control the property for a certain period of time, guarantee a certain level of market rent for a landlord, as I mentioned before, add value to the property, and then put it back onto the rental market, and the uplift is our profit. That's one way of being able to keep it for ourselves.
The other is we can look to finance partners. We can look to do a flip deal essentially, whereby we'll get our team of builders onto it, but in the meantime, we've had to buy that property with joint venture private finance and maybe some bridging finance, some short-term loan finance, for example. Then, we can do the work on the property, flip the property, sell it, take the profit, pay the bridging loan back, pay the private finance back with interest, and that's how we're also able to keep the deals for ourselves.
Either way, the same solution, so you could package up a flip deal and pass that to an investor as well.
Dean: Right. That's an interesting thing. I just was talking with somebody about a company here in the United States was just getting some traction called Opendoor.
Dean: Have you heard about them, or do you know?
Brad: No, no, go on, yeah.
Dean: ... "Bold" and started "The X Prize." Okay, just for people who might be listening and not know who he is. One of the things that he always talks about and we spend a lot of time looking at the impact of things like robotics and artificial intelligence and machine learning and 3D printing and autonomous cars and all the things that are shaping the near-term future, things that are inevitably coming. I always look at things like that through a real estate lens because that's been my background for so long.
As a real estate agent and serving and working with real estate agents, helping them to make more money, so I'm always curious about how this digital revolution is really going to affect the real estate world. I came away from the first of those with this comfort in thinking that the real estate industry the reason that it hasn't been more disrupted by digitization is because at its core, it's a emotional thing.
You can't digitize the last hundred feet of a real estate transaction. It's always going to be a negotiation between at least two completely irrational people negotiating the market value of the only property like this one in the world right now. That's really what it is. There's no commoditizing real estate. Every single property is different. Every single owner's situation is different, the conditions of the property, all that stuff.
I left feeling pretty comfortable that if a real estate agent was to focus on the listing side of the transaction of the business, that would be a pretty safe haven for them. There's always a way to usher people through those stormy waters and help calm those seas. Now, this year, I heard about this company Opendoor, which is a venture-funded tech-based, AI-enabled real estate company that will buy your property.
They're operating right now in three markets: in Phoenix, Las Vegas, and Dallas here in the States. Essentially, if you have a house and you want to sell it, you can fill out a form on their website, and they'll make you an offer in 24 hours. They'll say, "Here's what we'll pay for your house." You can close in three days, or you can close in whatever you want to close if you need to match up a closing date or something.
I thought, what really struck me about that is that they've taken the irrationality out of one-half of the equation, because they're a rational buyer. They've got money, and they've got algorithms that show what this house is worth, so they've got a logical framework to what they'll pay for a property, and they'll come in and do an inspection, say, "This needs to be done, this, this, this." Then, the seller will either do the repairs or pay the money for the repairs.
They'll charge a fee... They charge a 6% fee for the experience they call it, and then somewhere between a 1% and a 6% risk fee based on the condition of the property, the location, all sort of algorithmic factors that indicate that you might have to hold on to this property for a certain period of time. They have to build in a risk factor for that.
Then, it struck me that what they have they've removed the irrationality from one half, but then I thought that now they have to find a real buyer still, but they've removed the irrationality out of the selling side of it now when they're a seller, that they've got the property. It's completely staged, fixed up, repaired to be at the optimal state of repair, because that's where your business is in assessing that gap, right?
You look at a property that's in trouble or a situation, or it needs repairs, or it needs updating, and you look at the current market and you know that if they did this, this, and this, that it would be worth this much and command this much in rent, which means that that would increase the value of the property to meet certain cap requirements so that people can get a return on their investment. You're playing in that arbitrage, right? You're playing in that gap.
Brad: Yeah, and I think fundamentally the difference between maybe an estate agent or what you'd call a Realtor is that gap's probably smaller than a property sourcer because the investor he wants value in the deal. He wants value in that property that he's acquiring, whereas a homeowner doesn't. Their value is in living in it. Right?
Brad: ... and then they're putting in ... Both sides?
Dean: Yeah. They're basically saying to you, they're saying based on an algorithm that this ... They're only buying properties in a specific band. They only buy single-family properties built after 1980, three- and four-bedroom detached single-family homes in a certain price range.
Brad: That's what the algorithm can cope with almost, right?
Dean: Yes. It can say that with certainty, with very little, because it commoditizes it in a way that you can say this is the thing there. Now, where it ends up becoming really interesting is then when they're the seller, they basically put in ... They're not over-improving the property. They're bringing it up to the optimal state of repair, not making it perfect, not making it where there's still work to be done.
They're doing the things that have the most weight, the things that make the biggest difference, and they're selling at the optimal price, but now the properties are open from 6 a.m. until 9 p.m. A buyer can go and look at the property whenever they want with a code that they'll send them while they're at the door, that you can use this code to open the door and go in. They can look around the property, do whatever they want to do, and then if they want to buy it, they can make an offer.
They're removing the Realtor and all of the pomp and circumstance from it in a way, the journey of it. They're not going to come to your house and do the whole listing presentation to compliment you on your house and walk through and have tea with you and get to know your emotional needs for the move and all that kind of thing. It's like, "This is what your house is worth, and this is what we'll pay. If you want that, we're happy to do it in three days or whenever, and if you're not, then that's okay, too. Good luck."
Dean: Yeah, the seller side, yep.
Brad: Yeah, the seller side has to be motivated in some way other than just because they fancy selling and wanting to move. I think this is, the example here, this Opendoor example is a great way of targeting ... It's really appealing to people that fancy moving because they want to move because it's time to upsize, not because they have to because there's a pain of some description there. Am I right in thinking that with this?
Dean: Well, but it would be great that ... I think it upgrades to that, that it's also a blessed relief for somebody that has to.
Dean: Yeah, do you see what I'm saying?
Dean: That, it's an easy thing. It's an option that's available to them, that they know that within 24 hours and three days, "I could be rid of this problem."
Brad: "I could be rid of it," but I think everybody knows, do they not, that there's a payoff for the speed?
Brad: The payoff is the fact that, yeah, you're going to have to lower the price of your home, right?
Dean: That's exactly right, and that's the thing. They take it that you're going to take off that 6%, which would be what a normal real estate transaction would cost, and then in addition to that, pay somewhere between a 1% and a 6% additional discount on that property for the urgency of it or the risk.
Brad: Okay, right. Right, so the value, if you like ... In my model, if you steal some of this model, if you like, and put that into our model, the value's in that six to 12% almost.
Dean: Right. That's exactly right. That's what is happening there because that's the thing. If you look at what somebody could do is they're going to ... Traditionally, if they want to sell their house, they would either have to find a buyer themselves at the full retail value of what the house is worth. That would be the very best scenario for somebody, right? If they had somebody who was willing to pay full market value for their property and they didn't have to use a real estate agent to find that person, they're going to net the most money from that property.
Since most people don't have that, they choose that they're going to have to go select a real estate agent to help them and go through that knowing that they're going to have to pay that real estate agent 6% of the sale when they find a buyer. They'll expose it to the whole real estate community, which is set up to find these buyers, but it may take a long period of time for that to happen, because they may interview three or four real estate agents and then decide to go with the real estate agent that gives them the highest estimation of what they think it could sell for, which often they would tell them that price just so they can get the listing, right?
Dean: Yeah, so they end up with the property on the market for a long time. Then, they have to reduce the price and then time's going by and they're continuing to make their mortgage payments for three, four, five more months as the property's sitting there on the market. All that adds up, and when you take the equation and say, "I could bypass all of that, still pay the 6% that I would normally pay to the real estate agent, and I could bypass all that other risk for an additional 4%, say, so I'm getting 10% less than 10% off of what the retail value of the property is, and I get it in three days without thinking about it," that's what we're talking about.
There's a company here in the U.S. called CarMax, and they do the same kind of thing for cars. I had a Mercedes SL500, and I had ... I run into a situation where I had a Porsche 911, I have my BMW X5, I had my SL500, and I'm sitting here with three cars, and I want to get rid of one of them. Rather than go through the process of trying to find a buyer for my SL500 ... Retail value at the time for it would have been say 35,000 if I had found a buyer, a private buyer. Trade-in value would be 27,000, let's say, if I were to trade it in on something, like just take it and drop it off at the dealer.
Then, CarMax, I went in there, and their offer was $32,000, so it was more than a trade-in but less than what I could've gotten if I had sold it myself, but I got the money instantly. I was happy to pay 10% premium for that because it was just a hassle. Even just the time to place an ad or to go through that hassle was worth more than $3,000 to me.
Brad: I'm trying to figure a way of taking that type of a model or specifically the real estate model we just talked about, and essentially what I think I can see happening with this Opendoor path, if you like, is the seller is motivated to the point where they don't want to deal with a Realtor, and they're willing to reduce ... But, they've been educated and motivated towards that point, right, at that stage. They know what their options are.
Dean: Who does? The people who go with the Opendoor, you mean?
Brad: The seller. Yes, exactly, yeah, because it's quite a new model for them, isn't it?
Dean: It is a new model.
Brad: That's what I think our model shares with this is the fact that actually it's not immediately apparent what the solution is.
Dean: Right, exactly. I think that when you bookend the thing, like the ultimate scenario, if we take if we're a seller, is that they have a retail buyer who's ready to buy right now. That would be the best-case scenario. On the seller's side of you finding those people, your ideal is you find somebody who's got a problem so big that they're willing to take a discount on their property to get rid of the problem.
Brad: Yeah, they're willing to take the payoff in some way, yeah.
Dean: Yeah. That is on a spectrum. If you look at somewhere on the poles there, somebody's either they've got a buyer who's ready to buy it right now, which means they have no need for you, or they're in on the other end of the spectrum at their wit's end and would just, they would do anything if they could get rid of that property tonight, right?
Dean: Somewhere between those two poles is where every person who's thinking about selling their house or going to sell their house in the next 12 months is.
Brad: ... yeah, whereas the Realtor is obviously in the middle of verging towards the left.
Brad: It's all over the U.K., yeah.
Dean: Okay. Of all of the people who are going to sell their house in the next 12 months in the U.K., they all fit somewhere in that circle and on that pole, right?
Dean: Okay. Now, when you look at the opportunity here, just look for the common things, what they all really want to know is, "How much is my house worth?" That would be a question that they would all be interested in if they had a way of ... They're gathering their research. They're gathering their thoughts around this. If I start to think one of the ways that the magic formulas that I've discovered for the Realtors is that offering the report on Winter Haven lakefront house prices is something that somebody would want as evidence, as research, as facts when they're gathering all of their information, that it's a data point that would be useful for them in the negotiation with whoever is going to be buying their house.
If you had that, if you own a lakefront house and you had access to the March 2017 report on Winter Haven lakefront house prices, that's going to give you knowledge that would be helpful no matter who you sell your house to, whether you have a beautiful home, no problems, but you're looking for a retail buyer, or you're living in this lakefront house and you're in trouble, and you have a problem, or you own that lakefront house and you've been renting it as an investor, and you are in trouble and you want to sell it, you're equally going to be interested in knowing how much the house would sell for, for what the prices of those are.
My out-of-the-box thought for you would be what if you did that as a lead generation type of thing, do a direct mail to specific type of properties and offered the March 2017 report on whatever the types of properties are? Then, when people respond to evaluate and cherry pick the ones that have a problem that you would be a solution for, and if that's not the solution to then sell those leads to a traditional estate agent.
Brad: Right, exactly. Yeah, no, that's ... Yeah. That's I suppose what I think we've got to the point here where you need to monetize ... Is there a way of monetizing all the leads if you can't find the ones with the pain? If you put a message out there appealing to the pain, you're really going into the world of convincing, right?
Brad: If you pull back from that and actually you provide the informational resource as you've described, that means you're going to get a lot more leads. Now, our stumbling block initially was, well we don't want those leads. We only want the ones with the pain, but actually if you can shift the business model slightly, yes you can refer them on to a Realtor, an estate agent, but you can also then potentially offer the property on the open market for them, and that still keeps you in a dialogue.
If it doesn't sell after six months, you're in a situation where, okay, well let's look, do you really need to sell now after six months? Well, let's look at this other solution for you other than just selling it on the open market.
Dean: Right. Yeah, that could be, too. Right, absolutely.
Dean: ... where you're selling it for less than what you owe and negotiating with the bank?
Dean: That was happening in 2008, 2009, 2010 when all the properties were going down, down, down. The thing was that the very best way to find those people was to offer the report on whatever the house prices were because they're going to raise their hand themselves. Now, you're in that conversation with them.
Brad: Okay, so just thinking back to this digitizing the sale process the Opendoor scenario here, what they ended up doing was actually they chose a single target market based around the type of property.
Dean: Yep, they chose a market, they chose, yeah, Phoenix, and this type of home, single-family detached homes.
Brad: In order to narrow the focus a little bit, we would almost be looking to do the same thing in terms of maybe the house price guide wouldn't be for the whole of Leeds, which is a city. It would be for a specific type of home, because those are the homes where we see the deals.
Dean: Yes, that's exactly right. That was going to be my next question to you is to see what would be the things. If it's multifamily, like if you're focused on things that are multi-unit properties ... I say that differently than what you were describing them.
Brad: What do you mean by multifamily homes? I'm getting the idea that we've got four families living in one home, no? That's not it.
Dean: Right. Multifamily meaning one dwelling with four flats.
Dean: A block. Is that what you call it?
Dean: There you go, a block.
Brad: Yeah, we'd call that a block of flats, yeah. You'd have four two-bedroom apartments in one building.
Brad: A block of flats.
Dean: Block of flats, okay. It's all funny. It's like you guys speak a whole different language.
Brad: I know. It's become very apparent in this conversation, yeah.
Dean: ... yeah, of blocks and offer the March 2017 report on Leeds block however you would word it, block prices.
Brad: Yeah, price guide for blocks of flats, two-bed blocks of flats, so two bedrooms for example, yeah.
Dean: Anybody who has one as an investment or is thinking about selling one would definitely be interested in knowing what the prices are.
Brad: Okay. Again, it's hard to ... We can only target the landlords through that license list of HMOs. The other way of being able ... It's, for example, Facebook ads, it's relatively easy to target landlords, easy-ish I should say. It depends how interactive obviously they are in terms of their interest targeting and what have you, but obviously we're then calling out with this guide let's say on three-bedroom terraced houses.
Brad: ... as investment properties, for example. That's how we could call out to them, right?
Dean: Exactly. That's what I'm talking about.
Brad: ... in terms of who we've attracted, because we've gone for landlords in terms of our market?
Dean: One of the greatest blessings for a situation like this for your Profit Activator Three is market data. You've got market data that's constantly changing. Each month, there's new adjustments to that. "This is what's sold. This is what's available," and so it could literally be a combination of curating those, an article or two articles, and, "Here's what's happened in the market this week." That's really as simple as it needs to be. It doesn't need to be much more than that.
I've been amazed by ... I've been working with a gentleman in Toronto that has a app for real estate searching, and it's one of the most popular ones in Canada, but we started sending out a flagship email to all the people who've downloaded the app and just every week an email goes out with just two articles, a picture and a headline with a link to the article that are curated articles and the super signature, "Here's what to do now," and, "Find out how much your house is worth. Click here. Join us for a daily tour. Click here, or get a free home loan report."
That is as simple as it could be. What you need to figure out is what is the cookie that's going to be the thing that you can offer to somebody that gets them to raise their hand that somebody take them the next step. It could be the evaluation to find out a pinpoint price analysis on what their house, what their flat or property could be worth. It could be a room-by-room review or something to show what to do, how to optimize what they could get for it.
Dean: Anything where you have to opportunity to be a market maker is really the thing because on the other end of that, what I would really be encouraging you to do is to be looking at creating, you're getting all the money in a row. Like I said to them, that the very best thing that could happen to them is that they have a retail buyer ready to buy their house right now. Since they don't have that, they have to go to a real estate agent who, most of the time, a real estate agent is going to say, "When we list your property, here's what we're going to do to take it out to market and go find the buyer."
What makes even more sense is, if you can, while you're finding people who are looking for, who own the properties that are thinking about selling, if you are, at the same time, finding people who want to buy those properties or lining up capital, lining up investors, lining up people who want to take over those properties, you can create the dream come true on each end.
Brad: Yeah, and that's your phrase "the market maker" has always been in my head as we've developed out the model for this business. We have that. We have investors that have qualified, we've qualified with proof of funds, but now as I'm thinking that, I'm thinking, well, actually now we go all the way back to Profit Activator Number Two, or no, choosing the single target market, back to the specific region that ... We're essentially sourcing properties to order.
Dean: Rather than just specifically looking for the problems that you're anticipating because of we're trying to milk more gravity out of this graduated tax change then is maybe the real pain. That's probably not the real pain that's going to move somebody into action.
Brad: Yeah, it's the trigger that that causes, right?
Dean: Yeah, I think so. It's part of the chain reaction, but there's certainly going to be other issues more than just the tax situation of it.
Brad: Yeah. Okay. This idea in the education and motivating element, this idea of highlighting the pain is almost unnecessary. This idea of are you suffering with maintenance issues? Are you getting a call at three in the morning from a tenant who's locked out? It's almost irrelevant really, isn't it?
Brad: If it's going to happen, it's going to happen. They don't need to be reminded of it.
Dean: Yeah. Just focus on the cheese, right?
Brad: Yeah, focus on the cheese.
Dean: What would be the cheese that they really want? The cheese is they want the money. They just want to get rid of it.
Brad: Or, they want the solution to it.
Brad: Yeah. Okay. Good. Thank you, Dean.
Brad: Yeah, no, it's good because I feel as though I've got a thought process and a system for narrowing down the audience.
Dean: Also a potential way to make a profit generating your own leads.
Brad: Good stuff. Thank you very much. I'm thoroughly enjoying these podcasts, I have to say. It's been a real honor to be part of this one, I have to say. Thank you.
Dean: Awesome. Thanks. I am enjoying them myself. It's always fun to hatch evil schemes.
Brad: Absolutely, yeah, and I hope to see you in June.
Dean: Yes, absolutely. I'll be there.
Brad: Thanks, Dean. All the best. Bye.
Dean: There we have it, another great episode. I really enjoyed those kind of big conversations. We covered a lot of ground in that, looking at the digitization and how that's changing everything and seeing fundamentally where you could maybe take the irrationality out of whatever the transaction is that you're doing in your business. I think that Brad's got a really great opportunity here. I'm looking forward to catching up with him again in London in June.
If you're in the U.K. or in Europe and you'd like to get together with us at the end of June, I'm doing a Breakthrough Blueprint event right by London Tower Bridge. This'll be the sixth Breakthrough Blueprint I've done in London, and we got a really great community over there, and we'd love to have you join us. We'll spend three days, small group, 10 to 12 people, focused 100% on hatching evil schemes for your business and doing just like what we do on the More Cheese, Less Whiskers Podcast but over three days.
If you'd like to join us, just send me an email dean@deanjackson.com. Put "London" in the subject line, and I'll get you all the details. Look forward to connecting with you.