The Wrong Math in the Real Estate Space
I am your host, Zach Hammer—Founder of Real Estate Growth Hackers. Welcome to The Real Estate Growth Hackers Show Episode 030 – The Wrong Math in the Real Estate Space.
Today’s special guest is Luke Andrews, he is a Real Estate Agent, Leader, Investor, Best Selling Author, Speaker, Business Coach, and Real estate sales director.
In this episode, Luke shares some of the lead sources mistakenly discredited because of two short-sided views.
Here is a rundown on everything we talked about today:
What the Real Estate Industry Needs to Know & Hear
According to Luke, the industry needs to understand the market is changing on a daily basis. What worked five years ago definitely is not working today because the market is ever evolving and shifting.
One thing Luke found out is the agents who have been super successful have different personality types. They were not firm believers that everybody has to fit into one disc profile.
By implementing those, he has observed the following:
– Agents have grown their sphere of influence significantly.
– Agents have worked with mentors, leaders, coaches, or teams who helped them compete in today’s market.
– Agents have not been afraid to work with investors.
Many agents ignore either one of these because they either say, “That’s not my core piece of business”, or they’re just intimidated by the math, the numbers, and the process. Therefore, they have shied away from it.
Luke is trying to teach all his agents the need to work with investors and be able to speak intelligently because as the market shifts, investors are going to become more and more important.
A Simple Strategy to Keep up with the Sphere
Luke’s favorite strategy to keep up with the sphere is getting himself on a cadence and a rhythm of reaching out and checking in on people. He has something set up where he gets a reminder when it has been a year since someone bought their home and a reminder to run a quick RPR report for his clients.
He sends simple messages to his previous clients for free, which cost him nothing but a little bit of time.
Other topics we covered on the show:
- The kind of results Luke generated in the real estate industry. [05:07.30]
- What is the lead source, and why are people mistakenly discrediting it when they shouldn’t? [11:27:32]
- How does lifetime value work? [20:26:71]
- Luke dives into the details of the other two keys to the sphere—coaching and investors. [31:22:62]
- Luke talked about the courses he created. [38:54.55]
Do You Want to Stay Connected with Luke Andrews?
Please check out their social profiles below.
- Website: https://LukeAndrews.Teachable.com
- LinkedIn Profile: https://www.LinkedIn.com/in/salesandnegotiationcoach/
We Have Resources for You!
Also, Luke mentioned these items on the show. You can find them on:
[00:00:00] Luke Andrews: One, we need to understand that the market is changing on a daily basis. So what worked you know, five years ago, definitely isn’t working today. I mean, really what works six months ago, isn’t working today because the market’s ever evolving and shifting. And so, you know, one thing that I’ve found is I try to the agents that I’ve had that have been super successful, they’ve all been kind of different personality types.
[00:00:24] You know, we weren’t always a firm believer in that everybody has to fit into this one disk profile. You know, if you’re familiar with the Tony Robbins disc profile. We believe that you don’t have to do that, but they’ve all kind of have similar traits and qualities, and they’ve all been successful in a couple of key areas.
[00:00:41] And one of those is they have grown their sphere of influence significantly. They have worked it very, very well. You know, number two is they have gotten either with mentors, or leaders or coaches or teams that really help them compete in today’s market. Again, not what was popular five, 10 years ago, but what is going on in what works today?
[00:01:04] And finally they have not been afraid to work with investors. That’s something that is super key that I’ve found for all of my folks to it’s really, not only helped give them a leg up on their competition, but has also kept them afloat when the market has slowed down. I think working investors is super important.
[00:01:25] Zach Hammer: You are listening to the Real Estate Growth Hackers show.
[00:01:29] Welcome back to the Real Estate Growth Hackers Show. In today’s episode, we’re gonna be talking about a concept with Luke Andrews called the wrong math and why real estate agents are leaving money on the table by having two short sided a view of their lead sources.
[00:01:43] Okay. So we’re gonna be diving into that in just a second, but Luke, why don’t you go ahead and say hi to everybody and and let us know a little bit about your past, how did you come today to be talking to us?
[00:01:54] Luke Andrews: Sure. Well, you know, hello, everybody. And Zach, I first wanna say thank you for, for having me on it’s very much a, a privilege for me to be here.
[00:02:03] You know, for me, real estate is, is something that I somewhat fell into. You know, six or seven years ago, I was in a corporate role. I was kind of in that, that corporate rat race, that nine to five business wasn’t super happy with it. And my wife was looking to make a career change and she wanted to move into real estate.
[00:02:25] And she jumped in. She was very successful early on. And you know, I was, I was doing the commuting from downtown out to the suburbs, every. And one day she said, you know, it would be fantastic if just on your way home, you’re passing by all these listings. Anyway, if you could just show houses for me and I wouldn’t have to go out at five o’clock.
[00:02:45] So I decided to get my license part-time just to be able to help her out. And it was something that I had a little bit of an interest in. Anyway, I had some friends and we were talking about getting into real estate investing and I thought, you know, all of these things were very symbiotic. They went hand in hand, right.
[00:03:01] And. I just loved it. You know, it’s from the, from the very start, it was something that I got super passionate about. The issue that I ran into is every time I would go to make that move full time, leave that corporate job. I would get a little promotion. For a little raise and it was like, I just felt stuck. And my wife.
[00:03:21] Zach Hammer: You got the golden handcuffs.
[00:03:23] Luke Andrews: That is right. And my wife, obviously in real estate, you know, she didn’t have health insurance, she didn’t have a 401k plan. She didn’t have any of these things. And so we’re giving up this security and then they’re continuously just offering just a little more money.
[00:03:35] But what I realized it was just these small little stairsteps, even five, 10, 15% per year. Was just gradually stair stepping up. And I realized that the only way to truly make this a success and to, you know, provide the purpose and the fulfillment I was looking for was to just, you know, cut that cord and jump in both feet.
[00:03:57] I couldn’t be halfway in halfway out any longer. And so one day I, I finally said, Hey, I told my Boss. I gotta go. And he said, well, we were actually just getting ready to increase your bonus structure. And man, I just decided to scratch my head for a minute. And I said, you know, I appreciate it, but I’m not that guy.
[00:04:17] I’ll stick around. I’ll give you guys eight weeks. That way, it gives you an opportunity to find somebody new and I can kind of help train them and show them what I was doing. I didn’t want to just keep ’em high and dry. These were the people I cared about, but at the same time, I knew I couldn’t stick around forever.
[00:04:33] And I’ll tell you, those were the longest eight weeks of my life. Just waiting to get out into this new chapter, this new adventure.
[00:04:41] Zach Hammer: I bet. I bet a lot of people listening can can relate to that. I know, you know, the reality is that real estate, for many people, isn’t their, you know primary first career that they got into.
[00:04:52] Right? Like most, most kids don’t grow up thinking, you know, what I wanna do when I grow up is be a real estate agent. Right. There’s a few, there’s a few that do that. But yeah, for most people, it tends to be a you know, a second or third career after they’ve already done something else. So there’s a lot of transition that happens for people, for sure.
[00:05:07] What. So, so you’re, you know, you’re in your real estate role now, you know, full time after given that, given it that eight weeks, what was your journey like to today? What kind of results have you been able to generate? What what was your path to get there?
[00:05:20] Luke Andrews: Sure. Well, I had a pretty, I had a pretty fast start and I was fortunate.
[00:05:24] So the broker that I went to go work for he was, he’s someone that I’ve known since I was five years old. I mean, we’ve known each other 35 years. He grew up in the business. His dad was an insanely successful agent, his uncle, a very successful broker. I knew he was doing things the right way and he happened to be in a phase where he was looking to grow his team.
[00:05:45] And he realized that as he was bringing new agents into the business, something he was passionate about, he didn’t have enough hours in the day to be able to dedicate to all of these people, everything that they deserved, everything that they, they needed. And so, we created, essentially, they were almost like two sales manager positions and I had grown teams in the corporate world.
[00:06:07] And so it was something that I was able to consult on and, and help out with quite a bit. And because of my background and experience and having some real estate experience being part-time for a couple years. I was able to step in and kind of to fill that role. But as we’ve gotten bigger, as we’ve grown, as we’ve gotten larger, I’m realizing I don’t have enough hours in the day to be able to dedicate to all these new agents coming in.
[00:06:30] So now I have four sales managers underneath me who take on some of that kind of initial onboarding process shadowing the quick little Got a minute questions. What does this line mean on the contract? That kind of stuff. I still do some production. I’m trying to do less and less. I’m trying to, you know, kick more back to my team.
[00:06:50] But you know, my true passion has always been in the leadership, the teaching, the learning, the growing the, you know, an agent asked me like, Hey, how would you handle this situation? And I give them a script in a word track and they try it. And then they come back super excited because it works. Those are the things that I’m super passionate about. And this role really gives me that opportunity to be able to do it.
[00:07:12] Zach Hammer: Perfect. Perfect. So what are some of the, you know, during this phase of coming into real estate full time and, developing up that skillset you know, if you had to boil down at least a handful of key ideas that you’ve learned that you think are kind of different from what most people are talking about. What are some of your key takeaways at this point that you think the real estate industry needs to know and needs to hear?
[00:07:36] Luke Andrews: Sure. Well, I mean the key takeaways, and then one, we need to understand that the market is changing on a daily basis.
[00:07:43] So what worked, you know, five years ago, definitely isn’t working today. I mean, really what works six months ago, isn’t working today because the market’s ever evolving and shifting. Right. And so, you know, one thing that I found is I try to. The agents that I’ve had that have been super successful, they’ve all been kind of different personality types.
[00:08:02] You know, we weren’t always a firm believer in that everybody has to fit into this one disk profile. You know, if you’re familiar with the Tony Robins disc profile. We believe that you don’t have to do that, but they’ve all kind of have similar traits and qualities, and they’ve all been successful in a couple of key areas.
[00:08:20] And one of those is they have grown their sphere of influence significantly. They have worked it very, very well. You know, number two is they have gotten either with mentors or leaders or coaches or teams that really helped them compete in today’s market. Again, not what was popular. Five 10 years ago, but what is going on and what works today.
[00:08:42] And finally they have not been afraid to work with investors. That’s something that is super key that I’ve found for all of my folks to that’s really not only helped give them a leg up on their competition, but has also kept them afloat. When the market has slowed down, I think working investors is super important.
[00:09:04] And so many agents ignore it either because they say, A that’s not my core piece of business or B they’re just intimidated by the process and the math and the numbers and the process right. That they’ve shied away from it. And I’m trying to teach all of my agents that they need to be working with investors and being able to speak intelligently there because that, especially, like I said, as the market shifts, and we’re kind of moving into a new space where maybe we’re slowing down a bit, investors are gonna become more and more important.
[00:09:34] Zach Hammer: Yeah, and I think that’s key, you know, one of the things that you talked about, the idea that there isn’t like one exact disc profile that seems to be, you know, incredibly successful in real estate. I’ve seen the same thing. One of the concepts that I talk about is the concept of the real estate agent archetype.
[00:09:51] And there’s a few different ways that real estate agents get business. And what I found is that everybody sort of has their own bucket where they sort of lean into, it’s kind of like the disc profile where they may lean more one way or than another, but they kind of makes a match.
[00:10:06] And one of the big things that I see as a struggle for people in the real estate industry is you hear about somebody getting success with one method and you feel like that’s the only way to have success. Or you have to have that kind of personality, but the reality in real estate is there’s nearly an infinite number of ways to get business.
[00:10:22] Right? You gotta be creative, you gotta be adaptable. And so yeah, that real estate agent archetype concept, you know, there’s prospecting, there’s networking, there’s conversion conversion type stuff is like, you know, landing pages and converting leads that way. And then there’s what I would call marketing.
[00:10:35] And marketing is when you put out information and then get warm inbound interest coming back to you as well. And so, through a mixture of all those agents tend to be able to find sort of a bread and butter area where they feel comfortable, they feel confident but you don’t need any single one of them, if that makes sense, you don’t have to be the person who’s.
[00:10:55] Luke Andrews: 100%.
[00:10:55] Zach Hammer: Yeah, exactly. And and so, yeah, that’s awesome to hear that you sort of found the same thing that different personalities have a massive amount of success in this. So now let’s go ahead and dive in into kind of this foundational concept that we talked about at the beginning of the, of the show here.
[00:11:11] So tell me a little bit more you know, you’ve discovered this idea that really a lot of agents are looking at an opportunity in the wrong way. Right. They’re looking at at the opportunity and they’re running the math the wrong way to determine, Hey, is this a good lead source for me?
[00:11:27] Right. Because they’re thinking about that in too short of a view. So why don’t you walk me through that a little bit? What are we talking about there? What’s the lead source and, why are people, you know, mistakenly discrediting it when they shouldn’t?
[00:11:38] Luke Andrews: Sure. This has been an area where I have had to coach and coach and coach agents through because as the market is shifting and changing many of our big lead sources where they used to really just be a true pay to play where it’s like, Hey, I’ll pay out $3,000 a month. And you give me a certain number of leads in a zip code, and you know, whether those were great leads, bad leads. I closed 10 or I closed zero. I’m paying out the same each month. Well, the larger lead sources, you know, kind of started with the Zillow flex programs. They are moving to a referral based model.
[00:12:13] And lot of agents had had some struggles with that. You know, a lot of pain points. Because they start doing this math. And for instance, I’ll give you a very specific example. I had an agent that came to me and said, okay, well, I’ve got this $400,000 Zillow flex lead, and I’m looking at it saying, okay, well, if I’ve got a 3% commission and well, and I’ll preface this by saying I’m in a Heartland market, right.
[00:12:37] Where my average home price is less than $250,000. So a $400,000 buyer is a pretty big one for us. I realized some of your agents listening in Vancouver, Beverly Hills are like, oh, well, so $400,000 slum words over here. But they’re looking at this $400,000 referral and they’re saying, okay, well, if I get 3% and that’s 12,000 and you know, a $12,000 commission and I gotta pay out a 35% referral fee and they’re doing the math and they’re like, they’re looking at what they’re having to give up.
[00:13:12] And I said, okay. And I had gotten tired of being inundated at that point. So I decided to take a different approach. And I said, okay. I was like, well, forget that one. I got a $260,000 buyer over here, you know, still above our average price point, no referral fee, nothing. You want it. And they’re like, hell yeah, I’ll take those all day long.
[00:13:31] And I said, okay. I said, so you’re doing the math, but you’re doing the wrong math. And here’s what I mean by that. Cuz they looked at me really puzzled and I said, okay. I said, if you look at the commission dollars, a $400,000 buyer with a 35% referral fee is the same as this $260,000 buyer that I’m giving you with no referral fee except one, if you believe the studies that say we are the average of the five people that we spend the most time with a $400,000 buyer hangs out with other $400,000 buyers. Right? So that’s two referrals are they’re $400,000 buyers, a $260,000 buyer. Nothing wrong with that, but they’re gonna hang out with other $260,000 buyers, right?
[00:14:14] Those are the referrals. And then looking down the road when it’s 3, 5, 7 years down the road and they go to sell instead of selling a 400 and buying a six or 700, you’re selling a two 60 and buying a 400, right? So you’re taking this really short sided approach, not to mention for newer agents who are out there.
[00:14:39] This market is getting pretty tough because the strong market that we’ve had has just brought in so many new agents and I’m imagining people, all of your listeners are experiencing the same thing that their agent count in their market has grown significantly in the last two to three years. So now we’re competing more.
[00:14:57] It is getting tougher out there. And so when you’re a brand new agent and it’s harder to get things done, your costs are seemingly endlessly high, especially if you’re having to buy leads. This is a way that, yeah, you may get a little less on the front side, but you don’t have that guaranteed output on a monthly basis.
[00:15:17] So you’re bringing your cost down, which is gonna help you stay afloat a little bit longer, help you stay in this business a little bit longer. And then you avoid the pitfalls and the statistics of 90 to 95% of agents are out of the business within five years.
[00:15:32] Zach Hammer: Right? Yeah.
[00:15:32] Luke Andrews: How do we prevent that?
[00:15:35] Right. And that makes a ton of sense, cuz the reality is, you know, just like anything there’s always that balancing act and sure you want as high of an upside as possible, anytime that you could get it. But man, if you could still lock in a good upside and basically remove the downside risk, right?
[00:15:52] You know, the outlay of cash in order to do it, there’s a lot of value there and, yeah, the reality is I think a lot of agents have a misguided view of what kind of getting started in real estate looks like where they think that the model is, you know, continually paying to acquire leads, continually having those front end systems and, you do to a degree.
[00:16:16] But what I found is that most agents, if they set this up right, you do your marketing, you do your paid lead acquisition, whatever your strategies are to get you know, new inbound interests coming in. But really you are just doing that for long enough until you build up a strong enough powerful enough sphere that you could just work your sphere for the rest of your life.
[00:16:37] And that will take care of everything that you want. There’s a handful of people that might have really big aspirations to build massive teams. And they’re gonna need to figure out how to acquire leads constantly and all that, but the average agent getting in that wants to, you know, build a really good income for themselves, take care of their future.
[00:16:54] Be able to grow their own wealth through you know, just a great income, man, you spend a number of years building your sphere. And then you can just ride that sphere into the future because it will, it will grow. You’ll you’ll make new contacts and those contacts will be related to those people in the sphere.
[00:17:10] So it does replenish itself as long as you’re taking care of it. And yeah, that taking longer.
[00:17:15] It’s a super cost effective way to grow your sphere. It is so cost effective to be able to do it that way. And I hate to say it and people can think whatever they want about Zillow. I know that if you can go on to any real estate Facebook group and you just type in just a capital Z, and you’re going to get so many polarizing comments and opinions, but it’s not just Zillow any longer, they just happen to be the first, you know, we’re being asked to pilot a lot of programs in our market for new lead sources and they are all at this referral fee model, every single one of them.
[00:17:50] So, you know, whether it’s Zillow or somebody else, if you’re wanting leads in the near future, you need to get on board and, understand this and, be able to just wrap your head around it and be able to say, okay, this is what I’m gonna have to do until, like you said, you get to the point where your sphere has been built big enough, but the only way to really build your sphere that much is to take the leads on the front side.
[00:18:11] And this is the most cost effective way to go.
[00:18:15] Zach Hammer: Right. And on that end, I mean, that really, it lets people know what are the skill sets that they should be working on? What are the things that they should be working to build themselves up for the future. And I think so often, agents get really misguided to exclusively focus on the front end, shiny tactics, which they have their place they’re useful. Right? Like figuring out how to get leads off of different sources. It’s not at all you know, something that you shouldn’t do but you gotta know it’s placed, right?
[00:18:45] You have a path to generate leads on the front end, but you really just as important, if not more important need to have those backend processes where you’re keeping up to date with your sphere and you’re staying in touch with them and you’re nurturing them long term and not being part of the statistic where what is it, the average person that works with a real estate agent you know, to buy a home set like 80 to 85% say that they would gladly use that agent again.
[00:19:09] And yet only 10% of people actually do. And the reason is most likely because they just forgot about them and somebody else became top of mind by the time they were ready to sell. Right. So doing the work to keep up with the sphere and, and make sure that you’re finding those referral opportunities.
[00:19:25] You’re finding that repeat business when they’re ready to sell just by staying top of mind. Right. And having that long term strategy, that’s the thing that most people seem to be missing and they’re stepping over dollars to pick up pennies, trying to chase the new shiny stuff all the time.
[00:19:40] Luke Andrews: A hundred percent. You’re exactly right.
[00:19:42] Zach Hammer: Yeah. Yeah, absolutely. So, okay, cool. So, you know Zillow definitely is one of those companies that real estate agents just love to hate, but think you’re right. I think the reality is to Zillow’s credit. They did a fan fantastic job creating a portal that the average consumer likes to use.
[00:20:02] Right. They like searching for homes through Zillow. And so they’ve captured that front end interest. And as a result of doing that, they have definitely seen. It is in their interest as a company to be able to take advantage of more of that piece of the pie by doing the referral, rather than just getting paid directly for the leads.
[00:20:18] And so, yeah, they’re taking the opportunity and they have the interest, so they get to, you know.
[00:20:25] Luke Andrews: Exactly.
[00:20:26] Zach Hammer: Right. So yeah, that makes a ton of sense. So, okay. So basically the idea here is that whether it’s Zillow or whether it’s any of these referral type lead sources.
[00:20:37] The key thing that we want agents to think about and understand is that you can use this as a way to build a sphere that the, what’s the word that I’m looking for? The net value. There’s a word that means like somebody’s.
[00:20:53] Luke Andrews: Lifetime value?
[00:20:55] Zach Hammer: Yeah, lifetime value kind of works for what I’m saying. We’ll go with that one. So, yeah, but the lifetime value of your sphere is increased by leveraging the higher end leads than you might be able to generate on your own using something like a Zillow flex. Is that the right idea?
[00:21:09] Luke Andrews: Exactly. And, you know, the numbers that I have ran and I had somebody tell me this when I first got into the business and I’ve kind of kept track of it throughout the years. And it’s really held true is that if you take the size of your sphere, you take 10% of that number and you should roughly get that mini sphere transactions on an annual basis.
[00:21:30] Right. So if you’ve got. Simple math, a hundred people in there. You should get 10 transactions out of that. Now that may mean three buy sells, you know, two referrals and then two people that just buy or just sell something like that. It’s not always a perfect science, but it should be about 10%.
[00:21:48] So if we know that to be true, then we need to be growing our sphere. Absolutely as much as possible, because at this point there’s no sign of a point of diminishing returns where that starts to slow down. And so if we can continue to grow that sphere and do it in a cost effective way now, I know some people will say, well, it’s not cost effective when you gotta pay out 35%.
[00:22:12] Well it’s cost effective, especially for the newer agents to where you’re not having to pay out money with no guaranteed income on the backside. At least if you’re paying out the referral fee, you know you have some income coming in to be able to cover that cost. And then they buy and sell down the road, that becomes your lead.
[00:22:30] You’re no longer paying those referral fees, you know, as long as it’s met, whatever criteria that that lead source sets forth. But these are great, great opportunities. And then there are great opportunities to start gaining referral.
[00:22:43] Zach Hammer: Absolutely. Absolutely. And yeah, I mean, that’s, that’s the key. And to your point I don’t know if you’ve ever read the book, The Ninja Selling, it’s a fantastic book. It’s right in line with everything that you’re talking about here, I’d recommend checking it out. Larry Kendall, I believe is who it’s by. But in there, he lays out kind of the basic math for what you could expect to generate from your sphere and the idea you can actually run this any market.
[00:23:06] In any market, you could run these numbers and you could say, okay, what is the approximate turnover rate in my area? Right. So to find the turnover rate, you look at of all of the, you know, inventory that exists, what percentage of those sell every year, right? And then that gives you your turnover rate.
[00:23:24] And in most places, it’s an average of about 10. Like you’re saying 10% but even better than that for every, you know, if your turnover rate is 10%, that means there’s a buy side in the sell side on either side of that. Right. So there’s technically you know, for every 10% of turnover, there’s, you know, two deals per percent or whatever does that make sense?
[00:23:44] And so when you look at what you could get from your sphere theoretically there’s approximately 20 deals for every hundred people because there’s two sides, right? That if somebody’s gonna buy, somebody’s gonna sell. Now, with that, you take off a little bit because not everybody in your market is gonna be buying and selling in the same market.
[00:24:03] And so you look at about 15% and that’s about right. So about 15% of whatever you have in your sphere is realistic to expect for how many deals that you could do. And again, you could adjust those numbers just by looking at what is the turnover rate in your area, because that’s really, what’s gonna determine it.
[00:24:19] If you got a list of people that live in your area, turnover rate’s a little bit higher, a little bit lower, you could get really clear on what should I expect from my sphere. And chances are for most people it’s drastically higher than they realize it is, right? It’s a lot more. And so they’re ignoring the people on their list in order to chase after people who have never done any business with them, but it’s actually a lot easier to just stay in contact with these people.
[00:24:41] Call them up, say hi. Follow up with them and find those deals that are already there.
[00:24:45] Luke Andrews: Well, yeah, I mean, I told you, I came from the corporate world and my role was in strategic marketing and data analytics. And you find out that it’s five times more expensive to acquire a new customer than it is just to keep the existing customers that you have.
[00:24:59] So that’s why, again, we talk about one of the key things that we teach our agent is staying in front of their sphere. It’s how do you grow it? And how do you stay top of mind? Because if you go through, I’d be willing to bet that if you write down a list of your sphere and there’s a hundred people on there and you go through that list that at the end of each year, and you follow them on social media, you give them a call, whatever you’re gonna find that.
[00:25:23] A few deals slipped through the cracks for one reason or another. And it could just be because, you know, when you met them or when you got into the business, everybody knew two agents, three agents. Now, everybody knows seven, right? Everybody knows seven real estate agents that are out there.
[00:25:41] And so, we have got to find ways to stay in front of our sphere. In addition to being able to grow. Cause you can grow it as big as you want, but if you’re not effectively staying in front of them, it doesn’t really mean a whole lot.
[00:25:54] Zach Hammer: Right, right. Yeah. On that note, I mean, I’d love to hear. What are what are some of your top favorite strategies for how you keep up with the sphere? How do you, how do you keep it nurtured? How do you stay active? What are some of the strategies that you like to have your agents employ for that?
[00:26:07] Luke Andrews: You know, we do a lot of sphere based events for our agents. You know, we’ll host big events and allow them to come through and, invite their sphere. And sometimes it’s, you know, we actually just got done with one this week. It was a concert where people from our brokerage were actually part of the band. And we put on a concert at a local brewery and all of the money went to children’s miracle network. Right, which is it helps sick kids, it’s like make a wish, but it all stays local. Right. You know, we’ve done movie nights where we’ve rented out theaters or, you know, just different events, different things. Those are great, but they’re expensive.
[00:26:47] They cost money to be able to put on what doesn’t cost money is just getting yourself on a cadence and a rhythm of just reaching out and checking in on people. And you know, I have something set up to where I get a reminder, you know, every time it’s been a year since someone bought their home.
[00:27:04] And I have a reminder that says, Hey, you know, run a quick RPR report to figure out, you know, what their new home value is. And then just let them know, do a quick calculation of how much value did they gain in this last year? You know, how much association did they have send it over just as a, and not even as a, Hey, would you consider selling at this point, but just a, Hey, just wanted to check in.
[00:27:28] I gotta know, I can’t believe it’s been two years already. Can you believe what a great investment you made in that house? It’s already picked up 15% in those two years. And just in an excited congratulations kind of way. And you never know what kind of conversations those spark in terms of, oh, geez, I really had no idea. Maybe we should consider selling since we have that equity or my neighbors were just talking about, they’d like to sell, but they don’t know if they have enough equity. What do you think about their house? Are you willing to talk to them?
[00:27:57] These are all actual conversations that I’ve had from sending out these simple messages and those are free. Those cost me nothing, but a little bit of time.
[00:28:07] Zach Hammer: Right. Yeah. Tho those are great strategies. The thing that I love about events no matter the kind of event that you’re doing. So like, you know, I’ve heard of similar things, movie days, picnics in the park, going out to great restaurants, there’s all sorts of stuff that you can do on the events that are cool.
[00:28:21] But one of the things that I think people miss is that the event is not only successful if you get a bunch of people to it, cuz you may not have everybody come. But if you leverage the event as an opportunity to reach out to everybody and have a conversation and say, Hey, I’ve got this event coming. That’s where I see people missing the ball most of the time is that they focus too much on the event itself thinking they gotta get everybody there. And don’t realize the event is just an excuse to be able to talk to everybody. Right. To be able to say, Hey, I got this event0.
[00:28:56] Luke Andrews: I couldn’t agree more.
[00:28:58] Zach Hammer: But yeah.
[00:28:59] Luke Andrews: Perfect.
[00:29:00] Zach Hammer: Go ahead.
[00:29:01] Luke Andrews: Oh, no, I was just gonna say I could not agree more. That’s absolutely perfect.
[00:29:05] Zach Hammer: Yep. Yep. And then yeah, on the idea of, you know, just having anything of value to reach out with. So I think the yearly report of their home value that’s perfect. But a anything that is something that that person could perceive as valuable that could be.
[00:29:20] You know, reaching out because there’s a you know, there’s an article that you found that you know is relevant to them, right? Like take good notes on people. Find out when their birthdays are, find out when their anniversaries are, find out those kinds of things that, you know, to follow up with them.
[00:29:34] One of the strategies that I heard that was actually excellent. Was if you take notes of that, like, if you find out what their wedding anniversary is, what their spouse’s birthday, like those kinds of things you could do things like calling the husband a week before the wife’s birthday to say, Hey, I know your wife’s birthday’s coming up.
[00:29:52] Wanted to give you a helpful reminder and just check in and see how things are going. And use the FORD system, ask about family, occupation, recreation, and dreams, and find out what’s going on in their life. Because those types of things will also start to reveal things that are going on in their life.
[00:30:10] Right? Like, they find out that they just got a promotion at their job, or they’re considering taking a job in a different location. Those are all indications that they might be starting to look to sell, even if they haven’t thought about it yet, or, maybe, you know, they’ve got kids graduating.
[00:30:26] And so now they’ve got the empty nest they’ve got all sorts of things, right? Like you just hear about life events and those life events are often indications that other things are coming up that might indicate the need for a real estate transaction. And that lets you know, Hey, maybe I should follow up with this person a little bit more often at this point.
[00:30:41] But you only do that if you take the time reach out to people, find those excuses and, they’re not hard, right? Like birthdays, holidays, all of that kind of stuff. It’s not like it has to be super complex. But yeah, the key is taking the time and knowing your sphere well enough to be able to do that kind of follow up meaningfully.
[00:30:59] Luke Andrews: Exactly.
[00:31:01] Zach Hammer: Awesome. Awesome. So, okay. So we talked about the wrong math and we talked about why real estate agents are often leaving money on the table by discrediting something like really any referral based program. But Zillow flex is definitely one of those. We talked about how people can be better engaging and activating their spheres, some strategies for follow up and making sure that people are getting activated there.
[00:31:22] I know when you mentioned that you have kind of this triangle of different ideas for how real estate agents are successful. You touched on some of those ideas to start. And we dove into the sphere so far, but you talked about coaching and as well as investors, right? Those are the other two keys to the sphere to the triangle.
[00:31:40] Do you wanna dive into those a little bit more? Why are those so important? What should people be looking for on that front?
[00:31:45] Luke Andrews: Sure. Well, and like I said, learning how to compete in today’s market it’s so unbelievably important. So that you’re up to date with the newest, the freshest and the best skills.
[00:31:56] I mean, there are some things that are gonna be tried and true over time, but you know, that doesn’t necessarily mean that it’s working right now. Right, it’s not working today.
[00:32:05] So staying in touch with, I’m a firm believer in having a coach or a mentor or somebody, even if they’re virtual, even if it’s not someone that you’ve ever actually met in person, but just finding somebody that your personality, your styles match up, somebody that you look up to, that you can follow and, take some tips and tricks.
[00:32:24] And adopt and adapt what they’re doing to make it work for you and your market. Right. But investors, like I said, investors are something that I work with my agents on a whole lot, and there’s a couple of key purposes for it. Number one, I tell them investors are the ones that are gonna keep you fed when the market slows down.
[00:32:43] And that could be a big market shift or slow down, you know, we’re talking like an overall market shift. You know, that’s the time investors start shopping when things are on sale, but even if the market is still relatively hot and we don’t see that big slowdown coming. You know, things will still slow down during the holidays at the end, kind of from that thanksgiving to new year’s timeframe, things really start slowing down.
[00:33:06] Well, that’s what I found when investors start heating up and one, right. It’s because they’re looking for deals. They’re not having to compete as much. And two they’re looking last minute tax breaks before the year’s over.
[00:33:19] It’s like, shoot. I made too much money this year. I gotta go out and I gotta buy something to offset this. You know, number two, we talked about, if we are the average of the five people that we hang around with investors tend to be higher net worth individuals who probably hang out with other high net worth individuals.
[00:33:36] So that’s where your referrals are gonna go. You’re going to pick up more investors. And then finally investors have to have places to live themselves. And if they’re higher net worth individuals with friends who are higher net worth, you know, the referrals that you’re gonna get there for their personal homes are probably going to be pretty nice buy sell sites. Right? Right.
[00:33:57] So you’ve got all of these different things and then there’s a bonus. I’m a firm believer that we, as agents should be investing in property ourselves. I feel like you should be invested in something that you believe in. I don’t think it should be your only investment deal or your only retirement savings, but I think it should be a big part of it.
[00:34:19] Much like a fortune 500 CEO is a lot of their compensation and retirement is gonna be tied up in company stock. I think that, you know, us as agents should be heavily invested in the market as well. And by working with investors, you are getting access to great deals and you’re getting to see how great investors work, how their minds think.
[00:34:39] And so that can actually, if you’re smart and you pay attention, that will actually help you in your own personal financial journey. Be able to make better decisions down the road. Those are all just key things that I’m trying to teach my agents. Plus there’s so many agents out there who are so deathly afraid of working with investors.
[00:34:57] And again, I don’t know most of it I found is just they’re intimidated by the process. They feel like they understand it or know it. So they shy away from it. So it just gives you a leg up. It gives you that extra skill set, that extra tool in your toolbox that most agents don’t have. And then that just sets you apart even further.
[00:35:17] Zach Hammer: Right. Yeah, no, I love it. I think you know, real estate, especially, you touched on this briefly in a way, but real estate especially is really hard for a number of people because it’s one of the few, maybe not one of the few, but it’s a type of sales where the lag time between potential repeat business is long, right?
[00:35:38] So when you sell somebody a house, they’re most likely not going to be selling that house or doing another real estate transaction. Again, it varies by person five to seven years, I think is what the average is right now. Right? So you know, five to seven years to wait to build up repeat business can be difficult, right?
[00:35:57] You should, and you should have those fear tactics in place that we talked about and all that, you definitely wanna have it. But what’s great about investors is investors are one of the few types of real estate that you can work with where you find a person and build rapport and you get repeat business consistently, right?
[00:36:14] It may not be every month. It may not be you know, super duper consistently, but it’s better than every, you know, five to seven years. Right? So you can find that type of person where you find that one person and get those deals consistently rather than needing to have that five to seven year span between when you do that next deal with them.
[00:36:32] And just like anything, most sales period is about relationships. And so by going after investors, by finding investors and building those relationships with them, you’re a lot more likely to have the same effort where you might expend it on going after traditional real estate.
[00:36:49] You know, just the consumer buyers and seller. The same effort to generate those relationships versus generating those investor relationships. You know, it’s a much more leveraged activity to go after investors. So that makes a to of sense.
[00:37:01] Luke Andrews: It make easy deals because they’re much less emotional. It’s like, Hey, do the numbers make sense? The numbers make sense then great. They, they buy. If they don’t, they don’t.
[00:37:11] Zach Hammer: And I think that’s part of, what’s funny about it to me too, is that the the traditional consumer real estate transactions are much more emotional and that’s what people are more comfortable with.
[00:37:21] They’re more comfortable with like, I’m buying this for myself, for my family, for my life. And similarly I’m selling this that I invested for my own, you know, life and family and all that. They’re used to the emotions around that because most people get that and investors are like the exact opposite.
[00:37:36] It’s like, as long as it checks these boxes, I’m good. Like, they’re easier deals. It’s just more front end work of at least understanding the deal better. Right. There’s more to make sure that you know that you’re bringing the right properties, that you’re finding the right properties, all that kind of thing.
[00:37:55] And be more creative there, but yeah, I love it. Yeah, investors as a great group to go after, it fits very much in line with your view about the sphere as well. It’s a great group of people to have in your sphere that you’re working with. For sure. So yeah, so again, those three elements of the triangle is focusing on building your sphere making sure that you have a coach, that’s keeping you up to date on what’s going on in the market today because it is constantly shifting and what worked last year is likely gonna need to change to be what works this year.
[00:38:20] And then the third one was to be working with investors and making investors a core of your business to get that repeat business, to get that high end sphere. Really, it sorta amplifies everything else that you’re talking about doing there.
[00:38:33] Luke Andrews: Yep.
[00:38:34] Zach Hammer: Awesome. Awesome. Okay, cool. So that’s some awesome information. Now, on that end, you know, you mentioned people need to be getting coaches, but I know one of those ways that people could get a type of coaching is through training, through courses. It’s one of the things that I offer as well at Real Estate Growth Hackers, but I know you’ve got some great information for people as well.
[00:38:51] Do you wanna talk a little bit about how you’ve captured some of what you’ve worked on and what you’ve learned in the industry and, what you’ve created as a result to that?
[00:38:59] Luke Andrews: Sure. You know, when I got into this business and I started leading and mentoring and realizing that’s where my passion was, I decided I was going to do everything I could to change the world through real estate.
[00:39:12] And, you know, there was this concept that I had heard at one point, and it was from a pastor and he was talking about something. He called spiritual grandchildren which were basically, it’s not who you tell it’s who they go out and tell. Right? So you kinda get this ripple effect and this massive impact.
[00:39:31] And I thought about that and I said, well, how do I have, you know, how can I get this scale that I need to really get this out on this? You know, have the most possible impact that I can. And so I had a mentor tell me at one point he was like, you gotta create courses. You just gotta take what, you know, you gotta create courses so that you can get it out there.
[00:39:50] Cause you can’t possibly have one on one conversations with everybody. You can’t coach everybody, teach everybody. And I don’t offer coaching services other than my agents that actually work for me. So, I started creating courses a couple years back and I kind of stopped for a little while because I thought, ah, this isn’t any good, this isn’t any good.
[00:40:11] And then I just, I finally got it dialed in several months ago and it has been really impactful for a lot of people going through and just trying to teach the things that I am teaching agents right now that has made them Uber successful over time.
[00:40:26] Zach Hammer: Awesome. Awesome. Yeah. And I mean, so we’ve got, I see a number of them in front of me here. So some of these courses you’ve put together dynamic negotiation, the real estate agent growth blueprint, the 21 day jump start. We’ve got your two keys to success to them a 30 day real estate MBA as well. You got a lot of great information in here. I think definitely anybody who’s listening to the show, check it out.
[00:40:48] We’ve put together a special link for you guys that you could support our show in the process. If you wanna check out what Luke is up to and you could go there by going to RealEstateGrowthHackers.com/LukeAndrews in order to see what he’s up to see those courses. And if you buy anything if you buy any of those courses, you will be helping to support the show in the process.
[00:41:06] And because Luke is so awesome they actually set something up for you guys as well. So that you could get a little bit of a discount because you know, real estate growth hackers listeners are so valued that we wanna get them everywhere. Right? So you wanna tell them a little bit about about what you’ve set up for people.
[00:41:21] Luke Andrews: Sure. So I actually had it set up that if you go utilize that link, that Zach’s putting in the show notes. And if you put in the discount code hammer, 50% off anything that you purchase. So discount code hammer. It’ll ask you for that code as you’re going to check out, pop it in, it will be 50% off. Anything that you do.
[00:41:42] Zach Hammer: Awesome. Awesome. So, yeah. So thank you for doing that. The Real Estate Growth Hackers listeners. I’m sure we’ll appreciate it as well. Just like you mentioned. You know, in this industry, you gotta do what you can to make sure that your buddy goes as far as possible.
[00:41:53] So any little bit could help on that, right? Yeah. But yeah. So feel free everybody check it out. RealEstateGrowthHackers.com/LukeAndrews in order to check out what he’s up to. I think if you’re looking for a good place to start it looks like the the 30 day real estate MBA is kind of a great path to take some of what we just talked about, but it’s laid out more in depth and, more step by step is that, is that correct?
[00:42:15] Luke Andrews: It is, and it’s completely an audio course. And it’s just designed to be listened to one day at a time. And it’s short on a daily basis, you know, five to 12 minutes per day with most of them kind of in that seven to eight minute mark, something that you can just download, listen to in the car or the walk.
[00:42:31] Or run wherever. And it’s designed just to be quick and action packed and action oriented. So it just gives you little steps that you could take on a daily basis to really just jumpstart where you are.
[00:42:44] Zach Hammer: Awesome. Awesome. So If you wanna check that one out or any of the other courses that Luke has offered here, whether you’re listing when this is released or in the future.
[00:42:52] Go ahead and check them out. RealEstateGrowthHackers.com/LukeAndrews. Again, that link will be in the description. Use the code hammer to get 50% off, just like it sounds H A M M E R to get 50% off and check it out. So, yeah, Luke, thanks so much for coming on to Real Estate Growth Hackers.
[00:43:09] I’d love it if you could you know send this out with just, what are some of your last thoughts for real estate agents that you wanna leave them with here today?
[00:43:17] Luke Andrews: Sure. My thought right now is to just keep moving. It’s one of those things. I had a conversation with an agent the other day who said, you know, I’ve gotten into a point where I’m sleeping in and you know, I’m sleeping through meetings. Then my days are shorter because I’m not getting up until nine or 10 o’clock and it’s like, Hey, just because you have flexible hours in this business does not mean that they are optional hours.
[00:43:50] And a lot of people get into this business because it’s flexible and it’s quote unquote, easy money just because it’s flexible hours does not mean it’s optional hours. You still have to get up. You still have to get moving. You still have to take those steps that you need on a daily basis to be successful. Otherwise you will be one of the statistics.
[00:44:07] Zach Hammer: Yeah, there you go. True words for sure. You get out of this business, what you put into it, treating it seriously. It’ll treat you seriously as well. Right? So yeah. Powerful words. Thanks so much, Luke, for for coming on. Great information here.
[00:44:22] I hope everybody goes out, takes advantage of this. Leverage the power of growing your sphere. Do it in a way that has such a minimal risk to you on the front end, where you don’t have to outlay cash before you’re even sure that you’re gonna get business. It is a fantastic strategy to use, to try and grow your sphere that way.
[00:44:38] Check out what Luke is up to with his course is again at RealEstateGrowthHackers.com/LukeAndrews and otherwise, thanks for showing up. Thanks for listening. Go out get some great results of your business and we’ll see you on the next one.
[00:44:49] Luke Andrews: See you.
[00:44:50] Zach Hammer: Thanks for tuning in to the Real Estate Growth Hackers show. Remember done is better than perfect to turn the marketing ideas and tactics you just learned into real growth for your real estate business. Visit us at RealEstateGrowthHackers.com. If you like this episode, consider sharing it with another real estate professional who could benefit from the information, or maybe you’d like to subscribe to the show to never miss an episode, and you can leave a rating or review on iTunes with your biggest take, helping this show to reach and help more people just like you.
[00:45:12] Thanks again. And we’ll see you on the next episode.
Real Estate Growth Hackers Founder
Zach Hammer is the co-founder of Real Estate Growth Hackers. Over the last 36 months Zach and his team have managed ad budgets well over $100,000, generated over 25,000 real estate leads, and helped create over $50,000,0000 in business revenue for their clients. Zach is also a highly sought after speaker and consultant whose work has impacted some of the top Real Estate teams and brokerages across the country.