Q & A with Ron Quintero
An industry leader in programs for sales & marketing professionals
Dear Top Producers -
I have heard that the MLS can be my best lead generator. What would be the best configuration of requested information out of the MLS to give the strongest lead list of buyers or refinancers?
- Richard Klingensmith
Ron Quintero's answer:
In response to your question, allow me to address several important factors you need to consider before spending time, energy and money pursuing a marketing campaign involving the MLS. First of all, your question is WAY too vague. The MLS is a treasure trove of lending opportunities for mortgage lenders; however, it requires specific focus on a narrow range of data. Just like any other marketing campaign, the more focused your goal and refined your data, the more you are hedging toward success.
Before I go into greater detail, I want to address that word “success.” I do not know your level of experience, but I am going to make a statement with which, at first blush, you may totally disagree. That statement is this: Success CANNOT be duplicated or copied. Success must be created, and each success is a one-of-a-kind masterpiece. Allow me a little space here to explain. Sure you can borrow a little piece here and a pinch from there, but in the end, it must be your own recipe. If success was as easy to replicate as buying a series of letters or creating some product to sell to the industry to make a quick buck, everyone would do it.
As a matter of fact, marketing the MLS is such a catchy hook, I’m sure some quick-buck artist will create a product to make that quick buck with total disregard toward creditability and the responsibility of the impact or set back they have on one’s career. If success was that easy to replicate, why wouldn’t the mega producers we hear so much about own 100, 200 or 300 branches of their exact same model? I used to buy and sell Century 21 franchises back in the 80’s and into the early 90’s. Every person who purchased one of those franchises had the same logo use, marketing resources, training, access to leadership, etc. Why were a few franchises fantastic successes and most of them miserable failures? What determines a business’s success or failure, or a campaign’s success or failure, is the leadership and management as well as determination and commitment toward making it win.
An example of using the MLS as a component within a campaign follows this article below. Phases 1 and 2 are pretty well explained, but before I get into Phase 3, allow me to expound on 1 and 2. When I consult/coach my client through creating this department or pillar within their business, I tell them we are only going to focus on one phase at a time. Phase 1 must be done, and it ONLY, for the first month. Once it is mastered, then the second month we add Phase 2. Now, as we are in Phase 1 and 2, we are data basing, getting ready for phase 3, but I DO NOT want them to go there yet. Why? Because they are learning, perfecting, documenting and creating procedures. They are getting ready for the professionals. Practice on consumers first before exposing what you do not know with professionals; they’ll know you are winging it and still developing it. Get some victories under your belt, get some testimonials and build some case studies before going after the professionals.
Last weekend, I spent two hours with one of my client’s telemarketing homes for rent. I dialed eleven numbers, I got five connects, one was a landlord in the mortgage business, one had a bad attitude and was hung up on, and the three others wanted the Total Cost analysis comparing their current mortgage against other equity and mortgage management options available on the market today. Three out of five connects is not bad.
So let’s say we have gone through Phases 1 and 2, we know what we are doing, we are comfortable with how we communicate a solution, we have done a couple or, hopefully, a few transactions, won a few raving fans, built the case studies, got the testimonials, you are the best thing since sliced bread, etc.
Before we go after the pros, let’s understand how they, the property managers (PMs) or Realtors®, offer management services in addition to their regular residential retail business of listing and selling. I have owned a property management department for five years that managed over 300 doors, so I believe I am qualified to speak to this. Most PMs charge either a flat fee like $100 to $150 per door managed, or what we had was a sliding scale ranging between 10% for lower rents and as low as 6% for higher rents depending upon the monthly rental income.
In the other White Papers I have written, I have addressed getting business from insurance, bankruptcy, divorce and CPA’s not by asking for referrals, but by positioning yourself as a tool to be used in their business. For example, some CFPs or planners receive a fee for their assets under management. Insurance people are out to build a book of business, then coast on the renewals and residuals. Property managers are the same way. You need to ask the property manager, “Have you ever lost an account because the owner wanted access to their equity?”
I again can tell you the answer to that one is YES. When I owned my real estate, escrow, mortgage, insurance, title insurance LLC and my property management companies, we were ALWAYS looking for ways to handoff business from one to another. It didn’t hit us for the first year that when a landlord contacted us and said, “I want to put the home on the market” to ask them “WHY?” It wasn’t until the second year we started to integrate mortgage management into the property management solution. We did not have anywhere near the sophistication of the Rate Watch or Equity Repositioning report, but we did update our Q&A (ah, the good old DOS days) to database what the rate was on their mortgage, the equivalent of the annual equity review and when rates dipped; we told them they could refinance and improve cash flow. We told them when the property appreciated and when they could pull cash out to purchase another, the equity multiplier strategy (mortgage multiplier strategy as well); we truly managed their property and mortgage.
With that foundation set, how can you, using Mortgage Coach, position yourself as a tool or be used as an asset for a property management firm? I’m not going to do all the thinking for you; you have to come up with it, and it must be your masterpiece, your creation, your passion, your NICHE!
OK, now for the MLS part of the answer, and yes, I am this long-winded on coaching calls as well. What you want to do is get into the MLS if this is your NICHE and pull up “properties for rent,” both current and in the past. Document who the players are - you will see a repeating pattern of who they are. You can create, as I have with my clients, the approach letter to the agent or PM discussing your scope of services. Keep in mind to keep your cards close to your vest and use the initial email, mail, or fax, whatever method of communication, short and brief. DO NOT attempt to have IT do the selling for you; it only gets you up to bat! Intrigue them on the initial communication; make them curious. DO NOT attempt to sell these services over the phone. Landing a PM or agent offering these services is the same as bagging a CPA, CFP or financial related professional.
By the way, this target is far more profitable for your business as well. Allow me to explain. Right now in the mortgage business, there is a big push for the Missed Fortune strategy. It’s been said that less than 5% of American households have a CPA. Reported last month, 23% of all single family residential properties are investor-purchased properties. Let’s say you have a client who owns a home which has appreciated.
There is more than one RIGHT solution, but I am from the real estate side, and I can say this with no reservations. Most of my wealth has come from my real estate holding, my businesses and in last place, my rate of return on life insurance contracts, mutual funds and bonds. (I own a few, some I wish I didn’t.) What I mean by more than one RIGHT solution is that the Missed Fortune strategy does not have to be wrong for this to be right and visa versa. In August of 2002, I purchased a home for $775,000. Two years and two months later, I refinanced, separating around $400,000 equity from the property, using part of it to buy another property (equity multiplier) for $1,850,000 and leaving $250,000 additional cash liquid for me to use. I have leveraged a $775,000, NO MONEY DOWN purchase two and a half years ago (recently appraised at $1,400,000) into additional cash in the bank, and on this sliver of my portfolio, I now have $4,100,000 of real estate assets.
Let me explain. I bought a new builder fall out in October of 2004. The home is the exact same floor plan and façade as the model. The model just closed for $2,700,000. I owe $1,700,000 on the newer home. I am currently refinancing, pulling out another $4-500,000. I am also refinancing the prior mentioned home and pulling out another $150,000, and people thought I was nuts to keep the property with an $850 per month negative cash flow for the last eight months. I’ll sell it when the lease is up and keep hunting. I do not share this information with you to brag or boast. I share it with you to 1) reveal the opportunities and 2) attest to the fact that I have done, myself, a variation of the Missed Fortune strategy with a real estate spin vs. insurance. By the way, I have all the documentation, appraisals and good faiths to substantiate this claim.
I can run the numbers for you, and there is no way extracting the equity and placing it into an insurance bucket in the short term or long term can or will out perform real estate as an assert class. Insurance does not have the power of leverage behind it. The growth through the insurance angle is all on its own shoulders. I ran a side-by-side comparison for my clients on a recent conference call. We used an original purchase of $200,000 that grew to $300,000, and in scenario A, we put the proceeds in the insurance bucket, and it now had $400,000 leverage working for it: $300,000 is the home’s value with a $300,000 mortgage and $100,000 in the insurance bucket.
In scenario B for the same client, we take the $100,000 in refinance proceeds, diversify, place $30,000 in the insurance bucket or back-up cash in the bank, nothing beats liquidity. Use $30,000 to buy the 2 nd or retirement property while rates are still at record lows for $300,000. Use $40,000 to buy a duplex or four-plex for $400,000 or even a single family residence. In scenario A, one has $400,000 leverage for future growth, and in scenario B, one has $1,040,000 as their leverage base and they are diversified! Yes, there is more risk in scenario B, but there is also more rewards. From here, you can apply 6, 8 or even 10% rate of return against scenario A and use half of that rate of return in scenario B, and because of the principle of leverage, you are going to win every time. What if the property value goes down? It’s not the time to sell. The same argument can be made in scenario A in leveraging your real estate to the hilt, and then the market drops. If the real estate market pulls back on its way to higher highs, both scenarios are negatively impacted.
Here is the real kicker for the mortgage person. You went from managing one $300,000 mortgage in scenario A to managing three mortgages or $1,000,000 of mortgages under management. You strip $100,000 out of a property and place it with another professional now better positioned in the client’s life because the mortgage person is managing the debt, and the investment advisor is managing their cash. Also, the mortgage person better hope that one day in the future, that professional decides to NOT offer mortgage services.
I already have all my insurance needs taken care of, so I am NOT going to place it in an insurance annuity that if I bail out of the strategy during the first several years, I can be dinged up to, if not over, 25% of that money for the insurance part of the contract. That’s right; there is a penalty for early cancellation of the strategy. In researching the MLS, you will find those individuals who own multiple properties (mortgages) for which you can manage and provide advice. Tap into the agents/brokers focused on that group as well. The reason I am going into so much detail is because before a person starts downloading data or tearing through the MLS and starts mailings like they are going to relive the frenzy associated with the refinance hey-days, have a plan. Develop a niche; the opportunities are endless, but one cannot be everything to everybody - FOCUS! Listed below are a few strategies I have developed with many of my clients. Before you pick one, you had better make sure that your marketing is aligned with your market!
- New Listing to Seller Strategy
- New Listing to Agent Strategy
- Tenant Occupied Strategy
- Landlord Direct Strategy
- Investor Broker Strategy
- Cancelled/Expired Listing Strategy
- Withdrawn from Market Strategy
- Pending Listing Strategy
We just returned from conducting the Mortgage Coach Summit in Denver, Colorado. I have clients in Denver with whom I have worked, and a couple of them are employing or integrating MLS tactics in the mix. Denver has been in a flat, and in some areas, back-sliding property valuation market. The economy there STINKS! Between the airlines, telecom and the dot-com meltdown, job growth and population growth has been shrinking in that market. The MLS strategies that work here in Southern California, will not work in Denver. If I were to parachute into Denver and set up shop, I would use the MLS to database every foreclosure buyer’s agent stud I could and go after them. While the regular residential, what I call institutionalized agent working with Mr. and Mrs. Happy wanting to sell for top dollar are hurting and complaining about the market, the foreclosure people are having a hey-day.
Using the MLS as a Component Within a Campaign
B. Selling Option ARMs to Landlords
Phase 1 Classifieds Section of your local paper Homes for Rent
Phase 2 Database all property managers in your market, Yellow Pages
Phase 3 Access to MLS agents and properties
Phase 4 Data Quick® Record Purchase
Phase 5 Direct Mailing
Phase 6 Live Seminars
Phase 7 Teleconference Seminars
Phase 8 Join Associations/Groups
Tools
- Mortgage Coach Rate Watch® Report
- Mortgage Coach Equity Repositioning ® Report
- Investor PowerPoint Presentation
- Investor Brochure
- Investor Website
Develop department through assistant use.
Phase 1
Classifieds Section of your local paper
First and foremost allow me to explain my background in this arena. I owned a property management company. The one call we did not want to receive from one of our clients was the one that said “I want to sell my rental to access the equity.” You need to understand that a property manager makes their money based upon managing doors and creating a residual income. When a few landlords decide to sell all at once, that lessens the cash flow for that department.
When I owned real estate franchises, an escrow company, mortgage company, real estate school and other businesses, I was always seeking solutions where one could feed the other. One idea was that if we could identify why the seller wanted access to their equity, we could refinance and accomplish the goal, and at the same time, retain the client.
One needs to adopt this mindset. When you see a sign or ad that states “FOR RENT” that means “PROPERTY IN TRANSITION.” We need to ask one big question: “WHY?” Why do they want access to their equity? Why do they want to create a taxable event (the selling of a rental piece of real estate) to access their cash? We provide an alternative.
Get the classified ads section and look under homes for rent/condos. Most of the time when they are advertising, it is vacant or will be – assume the landlord is paying advertising dollars and paying the mortgage, and therefore, paying attention to the telephone.
“I am a loan professional that specializes in maximizing landlords’ cash flow through the proper management of their mortgage and equity.” SHUT UP! Most of the time they will ask you something like “and how do you do that?” They just opened up Pandora’s Box for a lesson in option ARMs or whatever similar product types you are excited about.
The macro reasons for a person to invest in rental real estate are:
- Leverage
- Appreciation
- Cash Flow
This loan product allows you to take advantage of all three of those.
“By the way, is the property vacant or soon to be?” Master that statement! You are making them realize that you are currently experiencing negative cash flow or about to, the pain is either arrived or it’s about to. During the time the property is empty, the client can use the pick-your- payment program and use the lowest payment to experience the least pain, or negative cash flow. If the roof experiences a leak, then use the lower payment and pay for the repair, so you can lessen the pain.
You need to be able to speak intelligently to all three points above, leverage, appreciation, and cash flow, because those are the three areas landlords love to discuss.
“If you don’t mind sharing with me the dynamics associated with your mortgage – when you obtained that loan, the loan amount, interest rate and monthly investment, what I will do is put together a comprehensive side-by-side analysis of your current situation, disclose to you your available options, discuss the opportunity for a possible equity multiplying strategy vs. a dead equity strategy just so you have the facts, and you are completely aware of all your options, there is no obligation to act of the findings within the report however, once again, at least you are aware.” What is your preferred method of receiving the report, email or overnight delivery?”
“Once you have a copy of the report in your possession I would like to circle back up on the telephone or face-to-face to present to you some of the broad strokes of the brush and be available to answer any questions regarding any of the finer details, FAIR? As they say in basketball, no-harm, no foul, what do you have to loose?”
Now, if you are really good on the phone, you might want to continue to converse along the lines of…
“The mortgage product I am about to tell you about is the product that most of the insiders within the mortgage industry use for rental real estate. It allows you to pick your payment, so you can decide your cash flow and the profitability for your property.”
I don’t recommend that you try to sell the concept on the first call and without the potential client having a copy of a Total Cost Analysis in their possession, so you can walk them through the report and win them with a great presentation.
A few buss words you may want to integrate into you conversations might include:
EMP=Equity Management Program
MUM=Mortgages under Management
SEM=Strategic Equity Management
CED =Client Equity Development
In my market, Orange County, CA, the major newspaper is the Orange County Register. In the Register every weekend, there is no less than 400, and I have seen as many as 700 homes, being advertised for rent, homes “IN TRANSTION,” THAT WEEKEND! On any weekend, if you read through the ads and call on them as I have, you will discover that about 53% are landlords direct, and 47% are agents or property managers. By the way, in California, brokers and agents are required by law to disclose if they are an agent or broker in the ad; however, once you begin calling you will discover that about 10% of what you think is a landlord direct ad is an agent that is ignorant to or wanting to avoid the rules. There are several other publications in OC such as the Los Angeles Times OC edition, Penny Saver, Shopper, Thrifty Nickel and a few smaller, local publications as well. My point is that the Register is one of many publications, and I am sure my numbers are low.
What I want you to understand is that, in prospecting this vein of gold, there are two real targets. One is the landlord direct, and the second is the property managers. In my coaching companies, I recommend that we target, for the first month ONLY, the landlords. I usually do not teach this strategy to the typical commissioned split loan officer as I do not believe in hiring them. I teach my clients what we call the No-LO (LO=Loan Officer) model. We usually hire a person with good telemarketing skills to make the initial call, extract the pertinent information, and have a Mortgage Planner prepare the Total Cost report, comparing their current mortgage against available products on the market and schedule a time for the Mortgage Planner or Specialist to discuss the report with the potential client.
Once we are really good with the landlord, and we have a few Case Studies or testimonials under our belts, it’s time to introduce Phase 2 of the program.
Phase 2
Database and develop relationships with
Property Managers/Yellow Pages/Ads
Turn to the real estate section. Look for Property Management or managed properties. Database this information. Have an employee call and identify who they are. They need to identify the point person that has clients that need to have their real estate managed. Ask if they are email friendly; get the address and the fax number.
The second phone call is to give a positioning reason for you to take a mini presentation with you to a meeting describing what you do for landlords. How does the property manager make money? Have they ever had one of their clients call up and sell their property, thus losing the account.
Ask them to convey to their clients the following: If the home was sold, and there was equity, what would the client be looking to accomplish? As the mortgage expert, you can, depending on their position, help them get the equity and not sell, thus avoiding a tax event. Earn their trust over a few meetings to mail to their database for the repositioning of their mortgage product.
Communication Example:
Dear “Property Manager,”
My name is Bob Howe, and I am a mortgage consultant that specializes in maximizing the rental cash flow for landlords.
The reason I am sending you this correspondence is that from the advice I have given to landlords and property managers like yourself, they have benefited by:
Retention of doors to manage with alternative solutions provided.
- Prevention of creating taxable events such as liquidation of assets
- when they want access to equity.
- Implementing an equity multiplying strategy to increase the number of doors currently being managed.
With over 25 years experience in the real estate profession, I have discovered that many income property owners are benefiting from property appreciation but could also be helped with increased cash flow through a strategic equity repositioning loan.
I offer a unique loan product for landlords that many insiders in our industry are using for their rental properties. It is my understanding that the chairman of the Federal Reserve, Alan Greenspan, uses this versatile loan product for his own property!
I will be contacting you within the next day or two to discuss a meeting opportunity so that I can present the solution to grow your business and improve your client’s well being. I am offering my mortgage expertise to you and your clients and would like to explain this “unique concept” directly with you at your earliest convenience. My direct line is 949-xxx ext. xxx and e-mail bhowe@....com.
In anticipation,
Bob Howe
Loan Consultant
We go much deeper than this on the consulting. Again, you don’t need this information now as you will go into INFORMATION OVERWHELM and never get around to starting.
Phase 3
Access to MLS
Pull up homes for lease – call up Realtors® offering homes for rent. We go much deeper than this on the consulting. Again, you don’t need this information now as you will go into INFORMATION OVERWHELM and never get around to starting.
...
Phase 4 Data Quick® Record Purchase
...
Phase 5 Direct Mailing
...
Phase 6 Live Seminars
...
Phase 7 Teleconference Seminars
...
Phase 8 Join Associations/Groups
When you have this department developed, one to two employees will need to be on-board to manage all of the opportunities this campaign presents. What the lazy manager will do is share this idea with one of their FREE WILLED LOs and when that LO masters it, they will open up their own net branch, and the lazy manager will be back at square one.
As a disclosure, anytime I mention “COACHING,” I am not competing with Building Champions. Building Champions is a fine organization for many Loan Officers that addresses the business as well as the over personal aspects of a person’s life to become more balanced and to help identify why they do what they do and what’s important to them in their lives. Many people have sought out my services for “COACHING” and upon us having an exploratory conversation, I have referred many to Building Champions because what they needed was not what I do or offer. My client is usually the owner of a business that understands the difference between a “Mortgage Company” vs. that of a “Mortgage CO-OP.” I do work from time to time with individual agents that work in what I call a “business incubator” where the owner of the mortgage company is nothing more than a funding conduit for the business person working under their license, building their own business with the mindset to transition to their own shop. I am retained for project development, not typical coaching.
I hope this expands your mind and encourages you to really dig in, research and know where the market is. The MLS is a storehouse of opportunity, but you have to have a plan.
I hope this helps.
Ron Quintero
MakeMyPhoneRing.com
FinanceThisHome.com
MortgageLeadersEdge.com
© Copyright Ron Quintero. Any use of this material in its entirety or portions requires the written approval of Ron Quintero. No one may alter, modify nor distort any of the material contained within this document. Transmission, duplication or any alteration which includes email, web base transmissions, photocopying or any redistribution through any duplication process of this document without prior written consent, is a violation of copyright law and will be enforce at a penalty of $10,000 per infraction. Copyright protection subsists from the time the work is created in fixed form. The copyright in the work of authorship immediately becomes the property of the author who created the work. Only the author or those deriving their rights through the author can rightfully claim copyright. This correspondence may contain information that is proprietary or “non-public personal information”, as that term is defined in the Gramm-Leach-Blieley Act (collectively, “Confidential Information”). By accepting and reviewing the Confidential Information you agree to indemnify Ron Quintero, MakeMyPhoneRing.com and FinanceThisHome.com Inc. herein referred to as author, against any losses or expenses, including attorney’s fees that Author may incur as a result of any unauthorized use or disclosure of the Confidential Information due to your acts or omissions. If this correspondence is received by a party other that the intended recipient, you are requested to immediately notify us of the erroneous delivery and return to us all information so delivered to ron@makemyphonering.com or ron@financethishome.com.
|
