Sharon Vornholt joins us to talk about two huge topics: building your team, and creating a marketing plan. Virtual Assistants may or may not make sense for you. Acquisitions managers may not work for you yet. We discuss the importance of having a clear marketing plan, using direct mail, a simple website, and more. Don’t miss this episode!
Mike: Hey, everyone. It’s Mike Hambright with FlipNerd.com. Thanks for joining us for this episode of The Expert Interview Show, where I interview leaders and entrepreneurs from across the real estate investing industry. If you’re new to the show, welcome. You’re going to enjoy the show for sure. If you’ve been around for a while, you listen to us regularly or a member of FlipNerd.com, we appreciate you and welcome back.
If you’re not a member of FlipNerd.com yet, you can setup a new account in probably about 15 or 20 seconds. So just go to FlipNerd.com. This is episode number 290 with Sharon Vornholt. Sharon is a real estate investor, an author, a blogger. She’s a fellow podcaster. She’s got her hands in a bunch of things and has a lot of experience she’s going to share with us today.
In fact, we’re going to spend the first half of the show, for those of you that don’t know, we’ve changed our format in 2016 here. First half of the show we’re going to talk about a topic. Specifically, we’ll talk about team structure. Sharon and I were talking about those personally beforehand, just how we do things using virtual assistance or staff or what you have to do on your own. We thought this would be a great topic because real estate investors talk about this all the time.
The second part of the show for our members is we’re going to focus on creating a marketing plan. It’s one of the things that Sharon teaches a lot to her students. Those that follow her know that she’s really big on having a marketing plan because in this business if you don’t have leads, if you’re not marketing then you don’t have a business. So we’re going to talk about creating a marketing plan in the Taking Action segment. But let’s go ahead and get started. Sharon, how are you today?
Sharon: I’m great, Mike. Thanks for having me on again.
Mike: Great to see you again. We’re talking about beforehand about team structure. I’m big on virtual assistants. I know you are. I also have some staff. I think sometimes folks get caught up with virtual assistants, assuming they can outsource everything.
There’s a bunch of stuff that they can’t get out of the way on which I struggle with that, to be honest, with some things. I don’t know how to delegate some things. Like this show, I couldn’t obviously outsource that. You couldn’t outsource your show.
So I think a lot of people understand conceptually what they could do with their business but there’s hang ups somewhere that end up allowing them to probably not be as efficient as they might be able to. You agree with that?
Sharon: I agree with that. I think people get hung up on the fact that there’s one way they have to do it. Each business is unique. You and I talked about this before. Your business model is different than my business model. I told you I had a model where I called it “the mouse to feed.”
I invested part-time for about 10 years and I had another business during that time for 17 years. When I decide to invest full time, that was my one criteria to not start out with, I call them “people to feed.” It is challenging and there are things that you just can’t outsource to a virtual assistant.
Mike: Why don’t we talk about, maybe we could share each other’s experiences with virtual assistants and staff. Why don’t you say this? You had a really successful home inspection business for a long time and you made this conscious effort to where you just said, to not have in-person staff. There are probably a number of reasons why. Why don’t you talk about why you didn’t want that and maybe some of the things you learned from that?
Sharon: Well, I wanted more freedom. It’s a big responsibility, for one thing, if you do have other people to take care of, to feel responsible for their income. I had an office and I had a full-time person who happened to be my daughter. She worked with me for all those years and then we had inspectors. So it got to be where . . . well, as you know, when you have staff, a lot of dollars are going out. So I made a conscious decision to go a different route.
One of my competitors asked me if they could hire my daughter away from me. So she went part-time for a while and then we all agreed it was a great opportunity for her. It was one more step in my direction to just be having pieces out there, having team members but not necessarily sitting in my office.
I was lucky that she still did a lot of things for me. Some of the things that you would have an assistant do, she still did for me and I still paid her to do those things. So that was a big advantage.
I use virtual assistants. I’ve had an intern. Now I’ve got another investor who’s also an agent that’s helping me with the real estate side which has been great.
Mike: Okay. One of the things that I think . . . so I have, gosh, we have three or four virtual assistants and a handful of staff in my office. Then in terms of virtual, I mean, I have a bunch of other virtual people.
In fact, the person that creates this very show that does all the editing stuff is in the Ukraine and have a full-time web developer. He’s not a virtual assistant but he works virtually because he’s probably a thousand miles away from where I’m at. So it’s interesting how technology enables you to do more and more virtually. But there are some limitations on that for sure.
Some of the stuff, especially web development and things like that, even video creation, if you want to discuss a video, you have to render it and then find a way to send it. Have the person open it up and say, “No, I want to change this.” It creates a lot more potentially duplicate work and duplicate effort in there as well.
Sharon: It’s hard. I got really lucky with my virtual assistants. I had one that I thought was going to work out well. He was in the Philippines. I think he was never seen again after the tsunami, so I’m not sure what happened to him. But in that process of having my work stuck with . . . I was using someone off of oDesk which is Upwork now, I think is what it’s called, they found me a gal who was just great. I got incredibly lucky. She’s been with me about three years now.
Sharon: Then when I needed someone with a more skilled, like a very skilled person, the person that does all the podcasts and editing and all that sort of thing, he’s in the Philippines. But he actually has an MBA so he’s a very educated guy. The downside is he has a full-time job so I have to work around his schedule.
Mike: Yeah, in some ways that works, in some ways it doesn’t. I mean, I guess one of the things about the Philippines is it’s, depending on where you’re at from either plus 13 hours usually, so it’s conceivable that they could do work during their hours and then work during my hours a little bit as well.
Sharon: Yeah and I think if you want an assistant, it’s very difficult to have someone overseas.
Mike: Yeah, I agree with that.
Sharon: I think they need to be here and if you’re going to have someone answering your phone, they can be anywhere in the US and still be answering your phone. So there are times and tasks where it’ll work very well for the person not to be physically even in your state. But other times, you need someone who’s outside your door. You need somebody much closer.
Mike: One of the things that we found whether it’s staff in our office, certainly with virtual assistants or virtual staff that are elsewhere is I think this is where a lot of people fail with VAs because I’ve talked about VAs and I’ve talked to people that “I hired somebody and it just didn’t work out.” I usually just say, why didn’t they work out?
It usually leads back to probably something that the person that hired them did wrong which was, in my experience, you have to be, and you can do this with, say Filipino-based or Indian-based virtual assistants, is you have to be very checklist oriented. These are exactly what you do. Don’t leave things open to interpretation because it’ll get interpreted in a way differently than what you meant.
In my experience, fortunately, in real estate, there tend to be a lot of things that you do over and over and over again. Second Wednesday of each month, do this. Every Tuesday, do that. Our business is very checklist oriented anyway. But I think people need that direction, otherwise they’re not going to be efficient.
Sharon: I think there’s two parts to that. I think you have to hire a virtual assistant just like you’re hiring somebody to sit in your office. What I like to do is if I’m going to search someplace like oDesk, rather than putting a job listing out there because then everybody has the skills you’re saying you need, is I search for the person. So I think you get a better quality person from the get-go. Then once I’ve narrowed it down I do a Skype interview.
Now that’s the first piece, I think, is to hire well. Take your time and hire someone and you have to be compatible just talking to them and liking them.
Sharon: So the second part is exactly what you said and for lack of a better name I created what I called a “task pocket.” Now one of the first things that I outsourced, and very quickly you find out some things we know that not everybody knows, like my VA did not know what Craigslist was.
So I typed up an overview of the job. Then I took it down to, “Here are the steps to doing the job,” to, “Here are the exact ads I want you to use.” Then I shot a screen capture video with a tool I love, Screencast-O-Matic, which is free. I went through the entire process.
Here is what Craigslist is. Here’s how you get there, Craigslist Louisville. Here’s where you go. Here’s what you do and here are the things to watch out for. I just created one of those task pockets for everything she was going to do. Now we’ve been doing this long enough now that I can say, “Hey, would you do this?”
Most the time she can say yes. But if it’s a completely new thing she’s never done then I do the whole process over again. The upside of that is if she ever leaves, I’ve got the training materials and I can hand that to someone else.
Mike: Absolutely. That’s really key because a lot of the burden is on you to create that training, all the burden is. So if you can use it over and over again. In fact, I actually have a new office manager starting here today. We had a bunch of training. We’re like, “Go watch this. Do this. Learn about the business.”
We had created some other trainings before like on real estate investing or whatever. There were some things we created for her and there were some things that we created in the past that we were able to recycle about how to do certain things. It makes the process a lot easier. When you have assistants in your office or even virtual assistants, entry-level type roles, they tend to be more turnover.
So if you’re planning for the future of, well, if somebody turns over, I can share this with them again. I think that’s awesome.
Sharon: I have been lucky, but I do try to create a personal connection with my VA. I give them a Christmas bonus. I know when it’s their birthday. They’ll email me and say, “Hey, my son just won an award.” So I think that we have a relationship.
Mike: I think that’s great. In my experience, I don’t know what yours is in the Philippines in particular, most VAs that I’ve had are very loyal. They very much want to please the person they’re working for. They really want that stability. I think it’s a good thing to have a relationship.
Sharon: Well, they want the work. The other piece of it is you can get someone for a couple of dollars an hour. Their wage over there is what, about $2.50, $3 an hour. If you double that, you’ve got a very loyal VA and you still have a drop-dead, inexpensive person to do your work.
Mike: Yeah, to the point to where I have, one of my main assistants, she regularly is working way more than 40 hours. I’m like, “Don’t get burned out.” She’s like, “I love this. I love my job. I don’t have anything else to do anyway,” things like that. If somebody doesn’t like their job, they’re not going to do that.
Let’s talk a little bit about what folks can do maybe differently than what they’ve tried with VAs or staff in their office. I think, here’s one challenge, you talk to a lot of newer real estate investors. I do too.
I think a lot of challenges, they hear things like, “Well, I’m going to hire a virtual assistant or assistant in my office,” or “I’m going to hire a buyer, an acquisition manager type person.” The challenge is they’re not running a big enough operation to support any of those people.
So sometimes they forget that they can’t keep those people busy. So maybe you could take a minute to talk about how folks aren’t doing enough volume to keep full-time people, whether it’s salespeople or virtual assistants or admins, how they might be able to overcome that.
Sharon: Well, I think you have to pay for performance. Most of the people that I know that have acquisition managers, they pay per deal. They work out per deal so if that person doesn’t work and they’re not getting any deals, they know pretty quickly there’s a problem.
If that person is not putting deals together, let’s say I have a marketing setup. The leads are coming to my phone. If nothing is turning into a deal then you have to stop and ask that person what’s the problem because they’re not going to get paid until they do something.
That’s pretty much universally how . . . I know a number of people who run big operations who have one employee, one actual employee which is an assistant. Everybody else they figured out how to pay for performance. Now whereas virtual assistants, I think people need to understand you don’t have to hire them full-time. You can pay them by the hour by the task, bid a job.
Sharon: That’s one way you can start at. If you have a budget of $20 a week, you can get somebody to work for you, a top-notch person who works four, five hours for you. That may be enough to keep you afloat.
I think it all goes back to when you’re thinking of outsourcing, think of the lowest level jobs that you do that you can get rid of to leave yourself in the position to do the things that only you can do. For most people, I think they think they want an acquisition manager, like you said, when they don’t have enough deals.
They are the acquisition managers. They [inaudible 00:14:45] all the other stuff and then when they get the deal flow up, then it’s the time to start figuring out, how can I pay this person?
Mike: Yeah, that’s great information. The key is, like you said, with VAs you could start small. I think with acquisition managers or buyers or salespeople, it’s hard to do that if you’re not doing enough volume because that means that they’re working for somebody else, too. Like, are they going to be available when you need them? That’s always a challenge.
Sharon, so are you ready to talk about Taking Action and specifically how folks can create a marketing plan for their business?
Sharon: Yes, and this is so important. I’m glad we’re going to talk about this today because things have changed. It used to be that if you were a realtor or you were an investor, they would call you up and have you come look at their house. Then you would get the deal or not. But now the whole buying process has changed. You need to do things a little bit differently.
What I have found typically happens now is that there’s a job loss. There’s a job transfer. There’s a trigger of some sort. Then the seller goes online. Then they start to vet you. They start to see who are the top investors. They start to check those people out. If they’ve gotten a marketing piece from you and they find your website, that’s a doubly good thing.
So they have a whole process that they go through before they ever pick up the phone. Marketing is just crucial today. But you need understand in their mind they’re no longer just calling the first person and making a deal. They’re going to have checked you out before they ever decide to pick up the phone and call you.
So you want to make the cut. How do you do that? Well, you have to be really good at marketing. Now I tell everybody you have to have a marketing plan. You just have to. That always starts with deciding what strategies you’re going to use in your business unit.
People that are marketing in some big cities like if it’s inner-city neighborhoods, and I use that to just point out that bandit signs work really well in certain areas. Where I am and in my market they don’t work so well. So you have to choose, what are your marketing strategies? I think everybody should be doing direct mail. Everybody needs a website. Some people may want to do bandit signs, I think.
This is where your website used to be way down on your list. I think it needs to be way up on your list.
Sharon: Some people do ads. I know some companies do TV ads. Most of your small investors they can’t do that. So they’re going to need to do maybe do Craigslist ads. There are so many different strategies that they can use in any business.
But choose three to five strategies and decide that you’re going to work on those all the time. Now once you’ve gotten your strategies, the next thing is to start breaking those down into steps rather than to go through a million things.
So I’m going to use direct mail as an example. We’re going to assume you’ve never done direct mail. So what are all the pieces to direct mail? Well, first you have to know who you’re going to mail to. Is it going to be absentee owners? Probates? Foreclosures? Pre-foreclosures?
It could be tired landlords, high equity deals. You have to make a decision. I tell people I love probates but they’re a little bit more labor-intensive. Absentee owners are a good one to start with. So you choose your niche.
Then you want to decide how to get a list. How do I find these people? That would be maybe step two. You’re going to get your list. Then you have to decide what am I going to mail to them? Am I going to send them a letter or a postcard? Go on down the list.
Am I going to do this in-house? Am I going to do outsource it? But you see where I’m going with this. You have [inaudible 00:19:01] every tiny little step down. That’s just direct mail. Now for your websites, same thing.
Where am I going to get this website? What’s step A, B, C and D? So you have to do that for each one of your marketing strategies.
Mike: We’ll talk a little bit about with direct mail specifically and some other things, too, probably more so than your website, just the importance of consistency. So you said you’re talking about building a checklist of the steps you do. But I think what you were implying there and inherent to that is that you need a checklist because you’re going to do that over and over and over again.
Sharon: Right, you need a checklist. I’m a great big fan. I’m a visual person. I use the 12-week year format which helps keep me focused. But I also use a great big wall calendar. So once I have all of my steps down, then the next thing I’m going to do is I’m going to walk over to my calendar and I’m going to write down every month when I . . . because you need to mail monthly, every month to every niche to every person.
So I put it on my calendar, this is the day I’m going to order my mail. This is the day my mail should go out. I will go through and do that. At minimum you should have a 90-day plan. Some things like REIA meetings, networking meetings that you might attend on a monthly basis, they should be just scheduled out for a whole year. You just need a big calendar.
So once you have your steps, consistency is everything. But life gets in the way and you forget. So that’s why I will tell you this will change your business if you do this. Put it on a calendar and you do that for each one of your strategies. Now networking you know is a powerful strategy. People go, “Oh, I don’t have time to go to meetings.”
It is so important and it’s not like you’re not working, whether its REIA meeting or whatever it is, that needs to be on there, too.
Mike: Sometimes, things I found, and I advise people on this before, even if you don’t have . . . REIA club meetings are a great everything to go. But even if you don’t have specific standing meetings, it’s to have a goal to meet a certain number of people a month or a week or whatever.
Just keep it simple and say once a month you want to meet with five people that could impact your business. You could even say, well, I want them to be realtors or I want them to be inspectors or I want them to be whatever. That might be, just have small goals that in the process of whatever I’m doing I need to be checking off the number of people at a meeting in a certain area.
Sharon: Well, and I’m a big believer that in addition to doing real estate related things, you should have at least one other networking thing you go to. Now some people go to BNI meetings for women. NAWBO, the National Association of Women’s Business Owners is an awesome group to belong to.
Whatever it is, you need to put yourself out there to people that are [inaudible 00:22:07] investors and say, “Hey, this is what I do.” You need to get really clear on saying, “I’m not a real . . . ” [inaudible 00:22:13] “Well, I’m a real estate investor.”
But you want to say how you can help people. I’m a real estate investor and I help a lot of people out of tough situations or whatever your elevator speech is, whatever it is. You need to be able to tell them very clearly and very quickly what you do because you never know who you’re going to meet. Many passes away or they know someone that has a house. Always be prepared to pass out your business card.
Mike: Absolutely. Let’s talk a little bit more about the marketing plan. You’re a big believer in direct-mail. I think that’s always a great place for everybody to start. But what else can people be doing that balances between you can do it when you’re getting started but doesn’t break the bank. Like you’re not going to, say if you’re brand new, start running television commercials obviously.
Sharon: No, I think direct-mail is the place to start. For free you can go on to Craigslist. You can use a service like If This Then That, which is free. That will scrub Craigslist for keywords like must sell, motivated, price reduction. Then you can send them, if they’ve got a phone number in there, you can send them a text. You can send out 10 text everyday to people and say, “Hey, I’m interested in talking to you about your house,” and give them your phone number.
If they’ve simply got an email you can send out 10 emails. You would be surprised how many people will just pick up the phone when you’re getting started. Because you’ve reached out to them they’ll call you. That’s a completely free strategy that you can do. Back to REIA if you go to REIA, there are a lot of people there selling deals. When you’re brand-new they’ll often will offer to finance them for you.
So I still like the REIA. But I think direct-mail . . . the other thing that I really think is non-negotiable is the website. Now you know you can get a great looking website for $49 a month. You can make your own but don’t do that because I’m the poster child for having pretty websites that didn’t generate leads. I wanted to do it my way like Frank Sinatra said. But go with a product where people have tested it.
They know things are placed on the page for a reason. They’re SEO optimized. You will start getting leads. All you need is one deal and you’ve paid for your website for years. So people, not only is it your new business card but it’s back to the way sellers think. Sellers are looking for information so if you have on your website information that they can come back to, they’re more likely to remember who you are.
Mike: I think even buying houses or selling houses now, especially selling, let’s say a few years ago people did with electronics, right? I mean, there was a time where you would just do one thing. I would go to Best Buy and try to buy something. I never do that now. If I’m going to buy something, I always Google it. I do a search. I do a little research online, watch a YouTube video, whatever it might be.
It’s so easy to research stuff online these days that inherently if people are trying to sell a house and they go out and they can’t find you, they got a piece of mail but they can’t find you, you don’t have a web presence, they’re going to find other people in the process. So you generate a lead probably for somebody else.
Sharon: Your mail pieces need to have your website on there. Websites, even a few years ago, you can get away without having it. Today it is absolutely not possible to be viewed as a real legitimate business person without a website. You can do that pretty affordably. It starts to build your brand. It builds your credibility.
There are all kinds of little things you can put out there. Anybody that’s going to be moving, how about putting up a resource for all the utility companies where they can just print it out, helpful tips. There are all kinds of things you can do. One thing you should do is develop a connection with them. You might do that with a video. “Hey, I’m Sharon and this is what I do. I’ve been working in the Louisville market for 20 years.”
It doesn’t have to be really fancy. They just have to get to know you and it has to be like, “Well, that Mike, he looks like a pretty nice guy.”
Mike: I am.
Sharon: I know, but they won’t know that if they haven’t seen your picture or a video is even better because they can get a sense of who you are. [Inaudible 00:26:52] with a smart phone you can have a video in a minute.
Mike: That’s funny. I met somebody recently. “Hi, I saw your videos.” They’re like, “You look thinner in person.” I said, “Well, you know, they say it’s the camera. Even if it’s a webcam it adds 50 pounds.” That’s 50 pounds, I think.
Let’s talk about the marketing plan here. Let’s talk about the budgeting side of that because I think a lot of, especially newer investors, they don’t know what to spend. They’re thinking more about the business in terms of what do I have to spend, in terms of . . . there’s really a kind of disconnect between what I have to spend and what your expectations are for the business.
As you know, after you’re in the business for a while you can kind of reverse engineer what you need to spend to get a certain number of leads and you know out of the certain number of leads what you’re conversion to a contract is. So you can start to figure out, it takes me, just going to use some basic math to keep it simple, $100 a lead and I close 1 out of 20. And therefore, I need to spend $2,000 in advertising to buy a house, whatever that media might be, whatever that is.
But I think a lot of people, their whole marketing plan is based on what they can afford to do and it’s totally disconnected with what the outcome is going to be.
Sharon: Well, and that’s the next thing on my list. Once you’ve gotten your strategies and you got your steps down and you got it all scheduled, you’ve got to think about your budget. You are absolutely right. You have to start where you are. But where you are might not be quite enough. I’ve talked to investors that have given up cable to have that $89 a month to put into direct-mail.
They have decided to start running and given up their gym membership. It comes down to some choices. But, like you said, I think everybody’s statistics are a little bit different. But, in general, the general consensus is with direct-mail if you’re getting a two or three percent return rate in today’s market, you’re doing pretty well. So what does it mean? If you have to talk to 20 people to get a deal and your return is two percent, well, then you just figure the math out.
You’re going to have to do a thousand mail pieces to talk to 20 to maybe get a deal. Okay, so how much does a thousand cost you? Well, it depends. I have a friend whose orders her cards in bulk. Then she’s worked out a deal with her sister to actually . . . she puts labels on them and she sends them out. So she does it for about the price of a stamp and her sister makes something when she does the deal.
If you can send out bulk mail of about a thousand, you can do that for about 43 cents a piece or something. So if you could give do that, that would be . . . I don’t know. You’ve got to work your numbers. But I think if you want a deal a month, a thousand mail pieces is about where you have to be. Then over time you start tying in with your networking, your website. All your leads won’t have to come from direct-mail eventually.
But in the beginning that’s just pretty much it. That or if you’re in an area where you can do bandit signs, that’s kind of an individual choice again.
Mike: Which, of course, they’re illegal in some areas.
Sharon: Many areas.
Mike: Yeah. Great. Well, what else do you want to cover today? Anything else you want to cover about, I guess, from a taking action standpoint, what people can do to prepare their marketing budget or that they need to do as part of the process we haven’t talked about yet.
Sharon: Well, I think you need to realistically figure out how can you come up with some money because I want you to think about the big picture. You may have to struggle for a few months to get a deal. But once you get a deal, just say on the low end you wholesale it. You make $5,000. Don’t be tempted to go buy something with it. That money should go straight into your bank account and you should be thinking, “Okay, I can market this many months with that money.”
It only takes a few deals to be on that track. So lay out your strategies. Get your steps. Figure out where you’re going to get the money to mail a minimum of a thousand pieces a month. That’s what I think everybody’s first goal should be. You can do that.
You can print letters off your computer and stamp them. You can get postcards. There are all sorts of ways you can do it economically. So that’s a step. Now who are you going to send them to? I think out of state absentee owners is a great place for people to start.
Now if you’re in a big state like Texas you can also do radius searches. You can say go out three hours from where I am and then give me everybody that’s in Texas plus everybody that’s not in Texas. If you’re in Kentucky, you can get anywhere in two-and-a-half or three hours. I found that it’s about three hours. It has to be about the pain in the butt factor where people want to just get rid of a property. That’s what I found.
Mike: Awesome, Sharon. Well, thanks for sharing that info with us today. If folks want to learn more about you or reach out to you, you got your podcast, why don’t you take a minute to tell us about your podcast?
Sharon: Well, I have a podcast. It’s on iTunes, “Let’s Talk Real Estate Investing.” You can also find it on my blog, all the shows are on my blog. As I do each one I put a little post up about that person. I try to have smart people on like Mike Hambright so that you get some good information out of each show. Louisville Gals Real Estate Blog and “Let’s Talk Real Estate Investing” podcast.
Mike: Awesome. We’ll add links for both of those down below here. Sharon, thanks so much for being with us today. Thanks for sharing your knowledge and your time with us.
Sharon: Thank you, Mike, for having me.
Mike: Absolutely, have a great day.
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