JF1140: How To Close $50 Million In Real Estate Sales WITHOUT Internet Leads with Brandon Nelson
Brandon has been able to build a successful brokerage after getting started in real estate as an inspector. Now his team and himself are on track to close over $50 million in sales volume this year. Brandon is not a fan of internet leads, his brokerage is able to do all that volume just from repeats and referrals. Brandon shares a couple other little secrets for sending out mail and networking that he says work great. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
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Brandon Nelson Real Estate Background:
-Broker/Owner of Brandon Nelson Partners real estate firm
-In 2017 they are on track to close $50MM in residential sales volume
-Realtor for 11 years, was a home inspector before that and a general contractor before that
-Their team is made up of 7 agents and 1 admin
-Based in Bellingham, Washington
-Say hi to him at http://www.brandonnelson.com/
-Best Ever Book: Be Obsessed or Be Average
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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluff.
With us today, Brandon Nelson. Brandon, hello.
Brandon Nelson: Hello, Joe. How are you?
Joe Fairless: I’m doing well, nice to have you on the show. A little bit about Brandon – he is the broker/owner of Brandon Nelson Partners, a real estate firm. Imagine where he got that name from, right?
In 2017 they are on track to close 50 million dollars in residential sales. He has been a realtor for 11 years, was a home inspector before that, and a general contractor before that. Based in Bellingham, Washington. With that being said, Brandon, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Brandon Nelson: Sure. Let’s start with the beginning – I’m a seven-time college dropout; I tried that again and again and again, it wasn’t for me… [laughs] I spent most of my 20s as a dirtbag kayaker. I met my wife during that time, we were just in the white water and stuff for that whole decade… I never really made more than about 5k or 8k a year until I turned 30 years old. Then I got married, moved from California to Washington state, and I had been a carpenter for a few years; when I got up here, I saw the hourly wage for carpenters was about half what I was used to making, so I enrolled in a technical college four-week home inspection program, and just finally found a college environment that worked for me.
I drank from the fire hose for four weeks, opened a business at the end of that time – that was in 2004 – and I was booked ten days out for the next three years.
I learned a lot, doing about 700 home inspections, and then one day someone said “Hey Brandon, you’re in real estate somehow, right? Can you help me buy this house?” and I went “No, I can charge you $400 to inspect it…” [laughter] So that night I jumped on RealEstateLicense.com and had my license about a month later…
In my first year I sold two houses, I moonlighted as an inspector for that first year; my second year I sold seven houses, and then my third year I moved to a big national franchise firm and I was the number one guy in 2008. Since then it’s been 11 years, I’ve never gone backwards. I joined KW for about a year and a half just to kind of see what the team building culture and systems look like; it wasn’t a fit for me to stay there, but I left there two years ago and started my own firm.
Now there’s eight of us here at the firm, and like you said, we’ll do maybe about 120 sites this year. I’m bumping that 50 million — we’ll probably do 55 million or so this year.
Joe Fairless: Sweet. Help me get a bearing for where Bellingham is – is that near Seattle?
Brandon Nelson: North of Seattle. We’re about half hour from the border with British Columbia, so we’re an hour and ten minutes North of Seattle.
Joe Fairless: Okay. So you did 700 home inspections, and then you became an agent… What lessons did you learn from them that you have applied to what you do now?
Brandon Nelson: Oh, it was invaluable. If getting a license were really properly done — like, it’s such a ridiculously low barrier of entry to get into this business, right? You’ve got a huge amount of responsibility and liability, and you can literally get a license — you can blow through the 90 hours in 15 or 20 hours on these online programs… So if my kids wanted to get into real estate and really take it seriously, I’d say “Great, I want you to go take the technical college home inspection program and then go apprentice or do inspections for a year.” You learn your product. Bottom line – you learn your product.
Residential construction has not changed or evolved more than fractionally in 150 years. It’s just like it was done a century ago; it’s very simple, there’s 8 or 10 different elements repeated again and again and again, and once you have been through several hundred homes in your area — now, there’s different microclimates around the country obviously and different species of wood destroying insects, and [unintelligible [00:04:55].11] here but not there, and various things, but once you learn your market and you learn what materials are used and what patterns affect it with ventilation and stuff like that, the confidence you can go into a showing or a listing with…
When I walk into a house, my radar is on — I’ll never be able to turn off that inner inspector… So I walk in – I don’t even have to think out loud or take notes, I can immediately come back to the table and say “Alright, we’re gonna talk about the market, we’re gonna talk about the process of selling your home, and in that I’m gonna tell you what things the buyers and the inspectors are gonna find that are gonna be surprises later, and I’ll show you how to repair or mitigate those.” So it’s a huge, huge value-add for my clients.
Joe Fairless: How do you build a company with that mentality that doesn’t have the home inspection program certificate?
Brandon Nelson: It’s a good question; we are careful with putting that information out there too broadly… At first when it was me and one buyer’s agent and an assistant – or for a while it was just me and one buyer’s agent – it was first and foremost in my bio: “Hey, former general contractor (that’s what I did before I became an inspector – carpenter), former inspector, now realtor, so you get all my expertise…” It’s easy to just say “Hey guys, full disclosure here – I’m not an inspector, I’m not doing an inspection, but I do have years of experience, so you’re gonna get that knowledge.” The problem with it was that it’s not that there was an expectation and I needed to be always inspecting, it’s that my buyer’s agent didn’t have it, so they would want me to come and look at the house… So we just decided to kind of hide that, until and unless it became necessary.
The obvious question that you ask, like “Isn’t there a conflict of interest or a liability thing?” – I’ve never (knock on wood) in 11 years had it rear its head where someone has come back and said “Hey, you said you had this knowledge and you missed this thing.” I’ve always just been very upfront – “Guys, I’m here to represent you as a realtor; you will still hire a home inspector”, but in the back of my mind, I’m the most knowledgeable guy on the property.
Joe Fairless: As far as your team goes… I think you said your kids — if you had kids, or if your kids were to do this, then you’d say “Go do the home inspection program”, so clearly you value that mentality. Do you have your team do any of that type of specific training?
Brandon Nelson: Yeah, what we do is we go out, previewing homes… When you’re a realtor, previewing homes and seeing homes is the gym workout of being a real estate agent; it’s what keeps you in shape and in tune for your job. So we go out and look at homes together, and all of my agents can tell you siding type, roof type, heating system type, mid-efficiency furnace or high-efficiency… They learn to identify and speak to all those things, so that they can educate the buyers.
Do I put them through a full-blown apprenticeship program with inspectors like I’m describing? No. But they go out with me and we go through those things until they have it, until they know it. And they are leaning on me a bit; we have seven agents, one admin, so the other six agents other than me — I’m getting daily phone calls from them, a lot of times on-site of the property or a snapshot… “Hey Brandon, can you say what’s going on here?”
And Joe, I don’t wanna put a tremendous amount of weight, I don’t want you to think that I’m this inspector who also has another hat as a realtor – that side, it’s really just a background thing for me, and calling on that background makes up maybe 5% of my day; it’s not a huge, huge thing. But we’re a very, very high touch — over 80% repeat and referral business at my firm. I’m on the phone with my attorney on average probably once every ten days.
We’re a very high-touch, high-quality firm here, and so having more than average knowledge and being able to do more than just put deals together — there’s a tendency in this business now, especially with… I’ll just say it – anytime there’s a KW around and people start seeing that culture, the mantra is “Get a listing signed and hand it off to your team, and go on and get another one” or “Get a deal signed around and hand it off to your team.” It works fantastic if your team is world class, if they really know what the heck they’re doing. If they don’t, then it lowers the overall quality of the industry, and the reputation of realtors begins to suffer. There’s a lot more of that than there is real high-quality, high touch stuff going on.
Joe Fairless: You said 80% of your business is repeat and referral business; other than performing, do you have any tactical things that you do to encourage the repeat business or referral business?
Brandon Nelson: Absolutely. We keep a database, and the number one most important thing, whether you’re an investor or a realtor, keep a database of all the people you’re in flow with. The grocery store test – if you’re gonna pass them in a grocery store and you would stop and talk to them or say hi, then they go on your database. We mail that database a very highly laborious to put together but very effective newsletter on a regular basis, we do two handwritten cards per agent per morning – our assistant pre-addresses them and pre-stamps them, just puts them on our desk…
It’s a small town, 87,000 people in the city of Bellingham. It sounds sizeable, but it’s a very small town, and my wife and I are outdoor athletes in this town, we’re very well known – that has become a huge part of my business. And honestly, that’s why the business carries my name, it’s because it’s the rainmaker team model. There’s a lot of times I wish I could get away from that, but everybody knows me in this town; I set a Guinness World Record on a local lake here, a kayaking record, and my wife and I constantly win a lot of the big races around here, ocean kayak races and multi-sport stuff. So we leverage that.
And again, we do really five-star work for our clients. A lot of times we’ll get a referral – somebody will say “Hey Brandon, you’ve been referred to me by five or six different people in town, so I figured you’re probably okay…” When you’ve got that kind of reputation, you’ve gotta leverage it.
Joe Fairless: You said you keep a database – do you know what system you use?
Brandon Nelson: Follow Up Boss. We use two, actually; I subscribe to Curator – I’m not sure if you’re familiar with that platform at all…
Joe Fairless: No.
Brandon Nelson: We have a Curator website, all our leads go through there following to Follow Up Boss. But I wanna be careful to point out – we don’t do a lot of internet lead gen. I don’t particular like internet leads, not in the traditional sense. I’m so spoiled by referrals, people calling ready to do business, that I’ve really just not taken to the whole 12-month incubation of a lead. But we use Follow Up Boss for internet stuff, and then we also use a $99/year system called RealtyJuggler just to manage our mailing database, because it’s the only CRM we’ve been able to find that lets you link a husband and wife together in one address.
Joe Fairless: Common sense, right?
Brandon Nelson: Yeah, exactly. It’s funny you’ve got these super high-end systems that have not yet introduced that simple tool… So we use those, too.
Joe Fairless: And as far as the newsletter goes, you said it takes a lot of time, a lot of hours to put together… What do you put in it and how frequently is it sent out?
Brandon Nelson: My dream has always been to send it out monthly, but it’s never happened. On average we send five or six a year. Here’s how it looks like – the key piece of content for that newsletter is a Q&A with a local well-known, an influencer-type person, a well-known athlete, artist, businessperson, or a whale that we wanna get in with; maybe a big business owner, or somebody high up at the university here.
We do a Q&A with them, and then the newsletter looks like a magazine, so we put them on the cover… Grace, our assistant, is an incredible graphic designer, so she puts these together. So the cover of it looks like a magazine you’d see on a newsstand, and it’s got them on the cover. Then there’s a 5-7 question Q&A interview where I write the questions and they just e-mail back the answers. We feed in four, five more pictures of them… So that’s the key piece of content.
Then we have a lower third of the second page where we write — a lot of times it’s a how-to, or maybe it’s about financing, or just something kind of real estate, but it’s education, it’s not sales. We do two sidebars, because the newsletter printer we use, which is — I’ll tell you what the printer is; it’s GoBigPrinting.com. So we send these out at the tune of about $1/piece. They have a template, and it has a three-inch flap off the right-hand side [unintelligible [00:13:16].10] You get two extra sidebars the full height of the newsletter; we do a lender case study. We have two preferred lenders in town and they take turns sending us a case study with an unusual loan they just closed, and then on the other side we do what’s called “Entrepreneur’s Edge”, where we do another shorter Q&A with a local business, and then on the back we always answer the question “How’s the market?” The number one question realtors get, “How’s the market?”, so we take a different spin on that question every month and we answer that.
So between compiling or curating all that content together – it takes a while, you need a certain lead time and everything to get it together, and on average we get about six of those every year. Then we leverage that out – we take a screenshot of the cover, we put it on Facebook, we tag that person that we interviewed, and we’ve get 300-400 likes on those, they get shared multiple times, and tons of tons of people say “Oh my god, you’ve made it! They finally featured you!” They think it’s a real financial magazine, right? So that’s cool. And then we’ve got five or six pieces of reusable content to repost to our blog, one every five days or so. It’s a really high leverage piece, but I got a ton of people say “Brandon, yours is the only newsletter we read; we love it. You put so much time and thought into it.” I’ve been doing that since 2007 and it’s kind of a great, great piece for us.
Joe Fairless: Bravo! You have inspired me to do something locally. I host a meetup, and we get around 30-40 people, but I’ve got probably close to 200 e-mail subscribers who have attended the meetup. I have a lot more e-mail subscribers in my larger database – about 5,000 – but for this particular meetup in Cincinnati I’ve got around 200, and I’ve been wondering “How do I grow this?” The Q&A with a well-known person… And you’re actually mailing these out – I didn’t realize you were mailing them out until you told me GoBigPrinting.com, I was like “Oh, he’s mailing these out!” Even better. I love this!
Brandon Nelson: Oh yeah, absolutely. I’ll tell you, anytime you hear someone say “Oh, print is dead”, or anything is dead (fill in the blank), you wanna look at that. Everybody’s getting away from it, you wanna go towards it.
Joe Fairless: Yeah. It’s such a crude way of saying it, but I’ll say it – anytime you can infiltrate people’s homes with your stuff… That’s one of the reasons why I do a book, because I sign the book, I send it to my investor, and… No one throws out a book. They might give a book to someone else, but no one’s gonna throw out a book, you keep it.
Brandon Nelson: You’re absolutely right.
Joe Fairless: I love this, thank you for sharing that. And then I want to ask one more follow-up question on the repeat and referral business – you said two handwritten cards per agent per morning… How do you prioritize who has written two?
Brandon Nelson: It’s up to the agent, so if there’s a compelling reason to get in touch with someone. Facebook makes it easy; Facebook is a digital stalking platform. You have your database in front of you; we keep two layers of our database: the hotlist and the warmlist. And let me qualify that everything that I’m sharing with you is what I learned from Ninja Selling. I don’t know if you’ve heard the name Larry Kendall.
Joe Fairless: No.
Brandon Nelson: The Group is in Fort Collins, Colorado; it’s a real estate firm called The Group. They are the highest-producing per agent firm in the country, many times since 1990 or so. You find a firm like that, you wanna know what they’re doing. They don’t do online lead gen, low conversion stuff; they are high touch, and they’re doing handwritten cards and everything. I’ve gone to Fort Collins to train with them, and I follow their teachings really closely.
So how do I prioritize? We basically have our hotlist – those are people we’re sort of working with actively, and our warm list is people who are gonna buy or sell in the next 12 months, even if they don’t know it. We know that because their life is about to change; their youngest is gonna graduate school, or whatever it may be. So by looking at those two lists and going through them, we’re wanting to touch those people consistently, again and again, and then once we’ve been through them, then we can look at the rest of our database.
But you’re basically saying, “Hey, did I run into someone recently? Did I see someone’s kid accomplish something on Facebook recently? Is it their birthday?” We use a technique called The Great Retrace by Michael Maher; he’s a real estate coach. What The Great Retrace is is when we get a referral, of course we send out a handwritten card and a $20 gift card to the source of that referral, but then we say “Who did that source come from?” and we send a card to them, and then we trace it all the way back – “How did we meet that person?” Sometimes there’s five or six people in that chain. Every one of them gets a card. “Hey, remember that person you introduced me to two years ago? Well, they were so happy they just referred me to a client, and I just wanted to reach out and say thank you again.”
Now, not everybody’s gonna need a $20 gift card, but that sort of touch is — nobody sends handwritten cards anymore, so there again, we’re differentiating, and it’s a super high touch. Also, when we close a deal, we’ll take the review — we’re big on collecting online reviews, and that’s something you’ve gotta be doing these days.
I think we have 209 five-star reviews on Zillow right now… So when we get a review, we will take it and we will share it with the referral source. A lot of times we’ll print it, cut it out, color-fold it, put it in a card and mail it saying “Hey, I wanna make sure you know how well your referral felt about us. We had a great deal together. Thank you so much! Keep them coming!” Something like that.
One more trick though, Joe. If there is a kid in the house that you’re mailing to, don’t address the envelope to the parents, address it to the kid, every single time. It is ten times more powerful for a kid to get a piece of mail than for mom and dad to get a piece of mail. So you say, “Hey Joey, do me a favor – your mom and dad are working so hard, I know they are so proud of you. I saw they put your thing up on Facebook about the soccer goal you had last week… Do me a favor, give them a big hug and tell them thanks from Brandon. And by the way, here’s a $5 ice-cream cone for that great goal that you had.” Dude, those kids are never gonna forget that, right?
Joe Fairless: [laughs] Done and done. I’m smiling ear-to-ear. These are lessons that can be directly applied to help everyone’s business, so I’m very grateful for that. Thank you for sharing.
Brandon Nelson: Yeah, absolutely. How many people, Joe, are out there buying the next IceColdLeads.com subscription? This stuff is so high conversion.
Joe Fairless: I hear you, yeah. And you grow it organically; you’re a living, breathing case study for how it can continue to snowball. Well, Brandon, based on everything that you’ve experienced as a real estate professional, what is your best advice ever for real estate investors?
Brandon Nelson: Best advice ever for real estate investors… I’m gonna say really the mantra that changed my life is “You are the average of the five people you spend the most time around.” It’s a law of nature, like gravity, so start taking that seriously. Get really clear on your goals, what you wanna do, and then look for the team of those 4-5 people to surround yourself with. And I don’t mean checking in with them once a month, I mean put yourself in close proximity to the people who are doing and who can help you get to where you wanna be.
Joe Fairless: And how have you done that with your business?
Brandon Nelson: I’m really careful with the hiring that I do. There’s an old saying my buddy Steve used to say when we were contractors – “Brandon, you pay peanuts, you get monkeys.” [laughter] I have really taken it seriously; I’ve probably hired and let go just as many people as I have — I’ve only been around for two years, but I’ve hired and let go probably 6-8 people in that time. The people that we have boiled it down to, if the tables were turned and I were to go to work for any of these people, I would do it in a heartbeat, they’re that good.
My first hire, my buyer’s agent, in her first full-time year she closed 47 sides and made 207k herself on a 50/50 split with me. That’s the caliber of people that I’m able to hire. The team that I have right now – god, they’re just phenomenal people.
So I do that, and I also buddy around with a local friend of mine, Tyler, who owns an insurance firm. He’s making in the low six-figures, 300k-400k/year, so he and I can speak the language to each other. He’s a big-time real estate investor. He and I brainstorm on stuff a lot of times when I spend time with him… And I’ll be honest with you, I also spend a lot of time — I first heard your podcast, I wanna say it was with Pat Hiban; it was either Pat Hiban or Bigger Pockets. That’s how I learned about you, and I have since become addicted to your show. It’s taken my vocabulary and my understanding of a lot of investment concepts and terminology to a whole new level, and I wanna say thank you so much for that.
Joe Fairless: Oh, great! I’m glad to hear that. I have already purchased Ninja Selling by Larry Kendall, because I’m constantly learning as well, and anytime I hear a book from a Best Ever guest that influenced them… And you said you flew out to Fort Collins and trained with them, but I’m gonna buy the book and then I’ll go from there, so thanks for that recommendation.
Brandon Nelson: Yeah, absolutely. Read the book, and then on NinjaSelling.com they have these $20 webinars of everything that they teach live, and you can watch on a webinar. You can watch it four times for $20; it’s the best value in the business. But if you treat yourself some time, Joe, and go to Fort Collins, that’s the only place you can take the Ninja Installation from Larry himself. It’ll blow your mind how effective, but also what an incredible salesperson and teacher Larry Kendall is.
Joe Fairless: Are you ready for the Best Ever Lightning Round?
Brandon Nelson: Let’s do it!
Joe Fairless: Alright. First, a quick word from our Best Ever partners.
Joe Fairless: Speaking of books, best ever book you’ve read?
Brandon Nelson: I’m gonna break away from the norm here, I’m gonna say Grant Cardone, Be Obsessed Or Be Average. It’s like a nine-hour motivational talk that I can listen to just again and again.
Joe Fairless: You kind of sounded like him; you sounded just like his voice when you mentioned the name of it.
Brandon Nelson: COME ON, MAN! [laughter]
Joe Fairless: Best ever deal you’ve done, either as a real estate agent or investing yourself?
Brandon Nelson: I thought a lot about this question – I’m gonna say the best deal that I’ve done has been the hiring of these people; these people consistently make me 400k-500k/year, so it’s [unintelligible [00:24:22].08] I mean, I’ve closed some deals where I made $30,000 in commission, but nothing has compared to year over year making six figures and watching my agents making six figures buying homes, opening other businesses, all because they’re part of the firm… So that’s my best deal.
Joe Fairless: What’s a mistake you’ve made on a transaction?
Brandon Nelson: Here’s two of them – I flipped two houses, and yes it works, but dang it, I wish I would have kept both of those houses. I flipped a house — I bought it for 156k, I put 28k into it, I sold it for 240k, I made a buck. That was in 2010. I just relisted and sold that same house for those clients for 400k… It’s just like, “What?! Man…”
Flipping houses is to have a job, and I’ve got a job, you know? I’ve got a real estate firm that throws off good money. Owning and holding – that’s wealth-building for me.
Joe Fairless: Did they put any of their money into it to increase that value, or was that just natural appreciation?
Brandon Nelson: Nothing visible that would have changed the needle. That was just the market appreciating here in Bellingham.
Joe Fairless: Best ever way you like to give back?
Brandon Nelson: My company – we’re way into the outdoor sports scene here, so we sponsor local events and races. This coming weekend it’s the Lake Whatcom Triathlon, and we’re the title sponsor of that. My kids are also Waldorf School attendees, and we’ve given almost 5k in additional money on top of their tuition to Waldorf school this year.
Joe Fairless: And how can the Best Ever listeners get in touch with you or your company?
Brandon Nelson: Www.BrandonNelson.com. It’s all right there.
Joe Fairless: Outstanding. Well, Brandon, thank you for being on the show. I have more than a couple takeaways that I’m immediately going to implement in my business. I interview a lot of people, and I’d say 10% of the time I can have multiple takeaways I immediately implement in my business, and this is one of the times… So I appreciate that.
One of the takeaways is the mailing a newsletter our, and walk through how you do it and what you have. Mine obviously will be different – I’m not a real estate agent, I don’t have a brokerage, but I have investors, so putting together something like that, and/or do something for a local meetup to continue to grow my influence locally. And then additionally, those cards – the one tip about addressing it to the kids, give your parents a high five, buy yourself an ice-cream, whatever it is… Holy cow, what an approach! It’s such a thoughtful way of just adding some lightness and levity to someone’s life. Because it’s one thing to receive a card — we love cards, for the most part; we love receiving them. I hate mailing them, but I love receiving them. But then it’s another to have something that’s kind of playful and thoughtful sent to me, because that’s a different level. That truly stands out.
Thanks so much for being on the show, among the other insights that you shared with us. I hope you have a best ever day, Brandon, and we’ll talk to you soon.
Brandon Nelson: Thanks, Joe. It’s been an honor. Take care, bud!