JF1380: Providing The Service He Wishes He Had As An Investor with Alex Goldstein
Alex was a real estate investor who “took his lumps in 2008”. He realized that he was not getting the level of service he wished he had been getting from his realtor partners. Now, as an agent, Alex is able to provide a high level of service for his clients, which are mostly high net-worth individuals or families. Hear the strategies he uses to be a top producing agent. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
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Alex Goldstein Real Estate Background:
- Top-producing real estate agent
- Has acted as investor, developer, and principal in over $50 million of land, commercial, and residential real estate transactions
- Author of three real estate books
- Based in Scottsdale, AZ
- Say hi to him at http://www.luxeaz.com/
- Best Ever Book: Man’s Search for Meaning
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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 fluffy stuff. With us today, Alex Goldstein. How are you doing, Alex?
Alex Goldstein: I am doing fantastic. Thank you so much for having me on the show, Joe.
Joe Fairless: My pleasure. Nice to have you on the show. A little bit about Alex – he is a top producing real estate agent. He’s based in Scottsdale, Arizona. He has also been an investor, a developer and a principal in over 50 million dollars worth of land, commercial and residential real estate transactions. He’s written three books. With that being said, Alex, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Alex Goldstein: Sure, Joe; it would be my pleasure. My background – I started in investment and development, and built a pretty significant business in a lot of different property types. As a lot of people did, I took my lumps in the downturn, and one of the things that I recognized was that the level of service I was receiving from the agents who represented me was not really up to snuff… So I got into the agency business and started representing other people on their deals, so that they could receive the kind of service that I wish that I had.
Today, my primary focus is on helping high net worth families with their real estate needs, and I’m unusual because of my background, having experience in so many deal types… I work on both residential and commercial, so I have people with their primary residence, their business office location and income property.
My typical client is more concerned with protecting their wealth and sleeping well at night than on getting really aggressive with their investments.
Joe Fairless: As a real estate investor versus an agent, I imagine – but maybe this is an incorrect assumption – that you can make more money investing versus being an agent. If that’s the case, then why choose to be an agent versus an active investor? And perhaps that’s not correct, I don’t know.
Alex Goldstein: Yeah, I suppose in the grand scheme of things you can’t become a billionaire by becoming an agent… With a few exceptions – somebody like Gary Keller – but that’s really more about building a business than being [unintelligible [00:03:13].26] per se.
Generally speaking, there is a cap, but you can certainly make an excellent living as a real estate agent, and it really comes down to what aspect of the business do you most enjoy. I really do like working with people, and I like helping people with their transactions, and helping them to get the best results and to not make big mistakes… So I really enjoy the position that I’m in.
Joe Fairless: Cool. So you mentioned that your focus is on helping high net worth families with real estate needs. How do you meet high net worth families?
Alex Goldstein: Well, I do get referrals from past clients. I’m fortunate to have a good base of clients who have been very happy with the work that we’ve done together, and then I also do online advertising to continually find new clients.
Joe Fairless: How do you advertise? What do you do?
Alex Goldstein: I use Google AdWords and Facebook ads.
Joe Fairless: And what has been some lessons learned on Google AdWords and Facebook ads?
Alex Goldstein: Well, I think the main thing is that they’re always changing the rules, but the fundamentals seem to apply. I think that the hardest thing for people to do when they’re advertising online is to distinguish themselves from the herd, and it seems to me a lot of folks who are advertising online are sort of just doing the same things that other people do, and it’s a bit of a race to the bottom.
I think you have to be constantly reinventing your advertising, and really paying attention to getting their attention and delivering results.
Joe Fairless: So how do you not do what other people do and focus on getting their attention?
Alex Goldstein: Well, I try to put myself in the shoes of that individual and think “What would I want if I were in their situation?” That’s how I got into this industry, thinking okay, when I was making investments, what were the things that were the most frustrating to me when I purchased and sold residences, what were the things that I wanted but I wasn’t getting… And that’s the position that I take – basically, treating the client the way that I would wanna be treated. That’s obviously gonna be very different, depending on that client and their needs, so different methods of advertising are gonna speak to those different needs.
Joe Fairless: What would an ad be? Can you give an example, just to illustrate that a little bit?
Alex Goldstein: Well, you’re limited in terms of how much you can really do with an AdWords ad, so it’s very micro-level; it’s not like there’s some magic sauce… We’re always testing to see what resonates the best. I think that the key is also not just that first ad experience, but what happens after they click the ad. Are they getting onto a site that gives them the information they want, that loads quickly, and are you giving them something that’s gonna help distinguish your service from everyone else?
I think part of what’s been helpful for me is the fact that I have written several books on real estate and people tend to gravitate towards that, or at least the types of clients that I like to work with are people who find that valuable.
Joe Fairless: So does the ad mention that you’re an author, or does it say “Need help protecting your wealth?” What’s an example, just to kind of illustrate this a little bit.
Alex Goldstein: Well, again, there’s a lot of different types of campaigns. Some are gonna be local, some are targeted to people coming from other places… But the idea is really to maintain a consistency. If I’m advertising to somebody in Texas for property in Arizona, then I’m going to reiterate that when they get to my website. Okay, I know something about people in Texas, or I have something to do with Texas, so it’s not just like I’m grabbing your attention and sending you something irrelevant.
I think that for a lot of advertising, the effectiveness goes down because people aren’t really pretending to be a customer and go through their own experience. I think that’s really it – just be empathetic, imagine what it’s like to be on the other side, and take it step by step. Then you just do whatever you can to improve that process on each step.
Joe Fairless: You mentioned that we’re always testing to see what works best – who’s “we”?
Alex Goldstein: Well, I guess that’s the royal we. [laughs] I have hired companies in the past to do advertising for me, but I’ve found that actually I’ve been performing better doing it myself.
Joe Fairless: Wow.
Alex Goldstein: So I really am the chief marketing officer of the business now, because I didn’t get the kinds of results I wanted with those agencies. Not to say that I wouldn’t hire again, but that’s where I am right now.
Joe Fairless: How did you measure the agency’s success versus what you can do? What quantifiably did you look at?
Alex Goldstein: Well, you’ve got a lot of basic metrics in terms of cost per click and things like that, so there’s some of that… But ultimately, what I care about is how much money am I putting in before I get a client, basically, or a reasonable prospect to work with. So I just found that doing it myself, I tend to get better results than I was getting. And obviously, you’re paying them a significant amount of money to manage, so they’re kind of behind the 8-ball in that they have to do considerably better just to get their own feedback.
Obviously, they’re providing a service in terms of saving time, and I get that, but for whatever reason I’ve just found that my own ads that I run myself have given me really satisfactory performance. And the other thing about working with agencies is I feel like the communication and the transparency was a problem with a lot of different agencies. When I launch a campaign now, I can monitor it through the whole process and know exactly how it’s going, and I don’t have delays because I’m there, I can see it all.
That was a frustration I had with a few different agencies, where it was sort of like just a black box, and you’d find out a month later if it was working… And I didn’t like that.
Joe Fairless: I wouldn’t, either. I hear you on that. What is the investment range that you would have with an agency on a monthly basis?
Alex Goldstein: You mean like how much were they charging?
Joe Fairless: How much they cost. I think of it as an investment, because there’s an ROI associated, but I’ll speak more plainly – how much did it cost?
Alex Goldstein: Most of the agencies were between $500 and $1,000/month. I think maybe I hired four different agencies in the last few years. Some of them I got okay results, but it was either the communication or just the ROI wasn’t quite what I was looking for.
Joe Fairless: And that’s probably just the retainer, not including the actual ads, right?
Alex Goldstein: Yeah, that’s just their fee, and then there’s my spend on top of that.
Joe Fairless: Got it. And how do you think of your spend? What type of ratio do you look for when you say “Okay, I’m gonna invest X amount, and I know that my lifetime value of an acquired customer is X amount” – what does that look like?
Alex Goldstein: Well, it’s not very scientific in my industry… At least in terms of the niche that I serve, because a lot of my best prospects will take a really long time to actually result in a transaction. For me, I think the way it works is I really just have to use some assumptions about what percentage of leads will ultimately result in transactions.
For any given campaign, they could still be resulting in deal flow years later, and it’s really hard to track… So I guess it’s a little bit of [unintelligible [00:10:49].07] and a little bit of just making sure that the numbers are so far skewed in my favor that it would be hard to lose.
Joe Fairless: Now let’s move on to service, because you mentioned you got into this aspect of real estate because the level of service you got from other agents wasn’t good enough… So what specifically do you do that is above and beyond the typical level of service?
Alex Goldstein: Well, I think I’m a lot more patient than most agents are. I think a lot of agents take a sort of scarcity-minded perspective about working with a client, like that they have to do a deal soon, or they’re gonna lose the opportunity. And suppose that there is always that risk, but I’d rather build my reputation on advising people thoroughly. So if someone needs to move quickly, we’ll move quickly, but I also don’t want people to be rushed into making transactions, particularly when there may be millions of dollars on the line. Being methodical and patient I think differentiates my service a lot.
Also, we talked a little bit more about advertising that I would have anticipated, but the truth is that that’s also a great value-add for my clients, because if I’m gonna be selling their property, I have an ability to draw a tremendous amount of attention for that property online, and I think because I have hands-on to the advertising and I know about the property, I can really connect the dots and get a lot of attention pretty quickly… I think that’s a value-add for the people that I’m selling for.
Joe Fairless: Absolutely. You’re the CMO. [laughs] I didn’t think we’d be talking so much about advertising either, but I just rolled with it, because it sounds like that is one of the two ways that you get high net worth families… And high net worth families, whether a Best Ever listener is a fix and flipper, or a syndicator, or a real estate agent, high net worth families tend to be a pretty good target audience for them, so I figured we’d get into how you acquire them.
You mentioned the other way is through referrals… Anything in particular that you do to facilitate referrals?
Alex Goldstein: Probably not as much as I should do. I try to keep in touch with people and just find out what’s going on in their lives… But I don’t have anything really formal in terms of that. I think the best thing that I can do is just do a good job for people, and make sure that they remember me, that I’m somewhat top of mind. So I try to keep in touch with my past clients, but that’s about it.
Joe Fairless: You’ve written three books. If you had to write a fourth, what would the fourth one be about?
Alex Goldstein: Well, I do love to write, so I think that my next book is probably not gonna be on real estate. I feel like I’ve said a lot about real estate, so I’m actually working on a book about wine… So that might not be the answer you want, but…
Joe Fairless: [laughs] Hey, that’s the truth though…
Alex Goldstein: Yeah.
Joe Fairless: You’ve gotta go with it. Have you worked with families who are not high net worth when you were first getting started as an agent?
Alex Goldstein: Yeah, when I first started working as an agent – at the time the market was really depressed, and there were tons of REO deals, so there were a lot of people that were out searching for a hundred thousand dollar properties. It’s not to say that today I won’t work with people who aren’t high net worth, it’s just that’s not the focus of the business and the advertising.
We do have a broad spectrum of clients, but that’s really the focus. I’ve done everything from 100k deals to seven million dollar deals in Arizona, and everything in between.
Joe Fairless: What’s the difference in questions that you’re asked with high net worth families, where you know you have to be prepared to answer?
Alex Goldstein: I think that the high net worth families that I work with for the most part – it takes a while to sort of melt the ice, so to speak. There can be people who are not just gonna hand over their business or hand over their trust. I think it takes some time, and that process is really driven by individual personalities, experience and needs. I don’t think that there’s a blanket statement that I can make… But again, the families that are gonna work best with me are people who are willing to go through the process and be methodical, and who treat it seriously.
One of the things that I’ve been sort of cheerleading for for years is for people to recognize that their home is a very significant part of their financial plan, even though it’s not treated as such. I don’t think you should treat your house like an investment; I think that you should enjoy it, make enjoying it and the best lifestyle the number one priority. However, I also think it’s important to not make a huge mistake with it, because you don’t want to lose a million dollars or more when you go to sell your property. That’s some of the stuff that I put out there and try to get on people’s radar.
Joe Fairless: You just did an ad campaign. Congratulations, you just got a lead come through. First off, what information do they provide you whenever they fill out a form online?
Alex Goldstein: Typically, it’s just an e-mail address. Sometimes people will provide their phone number as well. If we have a phone number, we’ll do our best to connect with them and then start sending them what I think are some pretty valuable information via e-mail, so they can start getting a handle on what’s going on in the marketplace.
Joe Fairless: And that was my question… So once they submit their information, what’s the follow-up process, so that you can melt the ice with them?
Alex Goldstein: Well, we’ll basically let them know the services that are available to them, and then I also write a weekly newsletter that covers luxury properties in the Phoenix Metro Area. We’re now over 400 additions into it, so it’s got a pretty deep base of readers, and I think that people find that incredibly valuable to getting a handle on our market.
Joe Fairless: And do you have a planned process for jumping on a call with them whenever they submit their information, or is it just the e-mails and newsletters, and then they’ll reach out to you when they’re ready?
Alex Goldstein: I think that calling people cold, so to speak, is harder and harder to do. People are just less likely to pick up the phone, so I think sometimes it may even at start be a text. My attitude is that I want people to know that I’m here for them, but I also don’t wanna be a pest. I make myself available, and… Again, with a lot of these types of decisions, they are large decisions, so I think my ideal client is more likely to be in this sort of gathering information phase, figuring out who they wanna work with phase, and that’s where I try to demonstrate my value, rather than just hammering them with phone calls, or stuff like that.
Joe Fairless: Fair enough. With the weekly newsletter that you do – anything in particular that’s in there that has been especially attractive or resonated really well with your audience?
Alex Goldstein: I don’t think there’s a magic bullet, other than the consistency of it. Most of the newsletters that I see coming from people in the industry, they’re either “Here’s my listings” and they’re just kind of hammering people with “Buy my stuff”, or they tend to go in the opposite direction and get really cutesy, and it’s like “Here’s my chocolate chip muffin recipe”, “Here’s a picture of my cat”, and stuff like that.
What I do is I just provide my take on what’s going on in our real estate market and then the economy more broadly, because it can obviously have an impact… And I think that the consistency of that allows people to get to know me and to understand what it would be like to work with me.
There’s no “Do this and suddenly money is gonna fall out of the sky”, it’s just showing up each week and providing value, and then at some point you get the call.
Joe Fairless: That’s pretty incredible, 7+ years you’ve been doing that.
Alex Goldstein: Yeah, it’s been a long time, and it’s evolved tremendously from when I first started.
Joe Fairless: What was the content like when you first started, compared to now?
Alex Goldstein: Well, when I first started I think it was really just the listings, and kind of like “Here’s what’s going on.” Very factual, but not a lot of personality. Then over time I started giving myself more permission to interject my thoughts into things, and to really actually writing content that was (at least to me) useful and interesting.
Joe Fairless: What’s an example that was in one of the recent newsletters, where you wrote editorial or content about something that was useful or interesting?
Alex Goldstein: I’m trying to think here… It’s a good question. I’ve got an archive of all this stuff. For instance, in the last edition I let people know about the fact that Maricopa County is the fastest-growing county in the country, which I think is an important thing to know.
Joe Fairless: Wow. In the country?
Alex Goldstein: Yeah.
Joe Fairless: Dang!
Alex Goldstein: So we had 202 people/day move here in 2017, which is more than any other county in the United States. So that’s an important fact for people to know… Then I sort of segue from that into some commentary about the luxury home price surge that’s being seen around the country, and just talk about what’s happening in some other markets and what might happen locally. So just my thoughts, and I have my crystal ball – it’s not better than anyone else’s, but hopefully people see what I see or can relate to it and will want to find out more.
Joe Fairless: Based on your experience as a real estate investor, and now primarily focused as being an agent, what is your best real estate investing advice ever?
Alex Goldstein: My best advice ever is to pay attention to time, just as much or more than money. I think a lot of people are focused on the surface level numbers, and when they’re selling a property they may have ego, or they wanna get a certain number, or when they’re buying they’re maybe stuck on a certain price… I think it’s important to look at time throughout the whole process – how much time do you have to make your decision, how much time are you gonna be in this property? And when it comes to negotiation, which side (the buyer or seller), who has the greater need to act? Who has more time and flexibility and who’s under more pressure?
That’s the best advice that I can give people, because I feel like it’s overlooked and it’s really important.
Joe Fairless: That is an important leverage point, that’s for sure – who’s in greater need of the time in that transaction, if someone’s needing to sell or if someone is needing to buy.
Alex Goldstein: Absolutely.
Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?
Alex Goldstein: Sure.
Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.
Joe Fairless: What’s the best ever book you’ve read?
Alex Goldstein: The best ever book is Man’s Search For Meaning, by Viktor Frankl.
Joe Fairless: I have not read the book, but I’ve heard Tony Robbins talk about his story many times… Actually, I was listening to it today, one of Tony’s audios…
Alex Goldstein: It’s an easy read… Not very long, but it’s potent.
Joe Fairless: Best ever deal you’ve done?
Alex Goldstein: I think that sometimes the best deals are the deals that you don’t do. A mistake can be so costly that it wipes out the gains that you may have made over a long time. Not too long ago I had a client who was very hot to purchase a property; he was gonna put millions of dollars into it, and I talked him out of it. It would have been an easy six-figure commission, but I was very proud of the fact that they didn’t do it, because I think that they were making a surface-level analysis, and they would have probably lost a seven-figure sum on that deal.
Joe Fairless: Wow… Do they recognize the salad that you gave them?
Alex Goldstein: Oh yeah, they were very grateful. After the dust was settled, they were like “Whoa… We almost made a BIG mistake.” [laughter]
Joe Fairless: What was it about the transaction that you saw something?
Alex Goldstein: Well, the views were beautiful from this lot, but when I walked the lot, I felt like there were some irregularities in the way that it was shaped and how they’d be able to use it, and that ultimately the magnitude of the type of property that they wanted to create wouldn’t have been supported. Despite the fact that the lot was in a place with tremendous views, and surrounded by really high-end properties, I think it ultimately would have been the kind of odd duck, so to speak, of the block. I think if they had built the property there that they had intended to build, it really could have been something where ultimately took a two million dollar loss, or something in the end.
Joe Fairless: Wow, that’s some vision. That comes from experience right there. You can’t read about that in the book, that’s for sure.
Alex Goldstein: Yeah.
Joe Fairless: When you took some lumps in the downturn, in 2008, what was the reason why your portfolio took the lumps? If you were to look at it very emotionlessly, what would you say the reason why was?
Alex Goldstein: I think you just found the subject of my fourth book, Joe. [laughter]
Joe Fairless: Well, you can combine that with the wine one, and that will be better for you.
Alex Goldstein: I think that the short version of it is that I underestimated how much time it would take to unwind some of these deals. The biggest issue that we had was that things were taking longer than anyone expected because it was such a boom. So if you were building, your deal was gonna take a lot longer to complete, and if you were doing entitlements, it was gonna take longer to go through… So it was kind of like — I saw that the crash was coming, but it was almost like you were just being stuck, where you just could not unwind things fast enough or get things completed.
Even though I think I was aware probably 18-24 months before the market, it wasn’t enough to remedy the situation. That was really the lesson for me, recognizing that, again, time is a big factor – we can under-estimate time – and that was one way where I under-estimated it, and I wouldn’t make that mistake again.
Joe Fairless: And those properties weren’t cash-flowing, so you had to sell them, and they weren’t able to sell quickly?
Alex Goldstein: Yeah… There was a lot of different types of deals that were in the works at that point, but the long and the short of it is that the winners were just not enough to carry the losers in a way that was able to unwind in an orderly fashion… And by the time the properties were completed or zoning was done, the values were just down so much. We got a lot of deals that were just kind of flat, and some of them were way down.
Joe Fairless: Best ever way you like to give back?
Alex Goldstein: Well, I give back in three ways. I think there’s money, time and knowledge. For me, the money is the easy one, and just writing checks. With time, I’ve been volunteering for the International Wine and Food Society, serving on the board here for about ten years, and I love that; it’s a great passion of mine. And with knowledge, it’s just writing books and hoping that people can learn from my experiences.
Joe Fairless: Best ever way the Best Ever listeners can get in touch with you?
Alex Goldstein: You can check out the website for my latest book, it’s NoNonsenseBook.com. The book is called No Nonsense Real Estate. There’s a Contact form if anybody wants to reach out to me.
Joe Fairless: And what’s your real estate agent website?
Alex Goldstein: It’s LuxeAZ.com.
Joe Fairless: Alex, thank you so much for being on the show, talking to us about a wide range of topics, from 2008 lessons learned, to what you’re doing now to partner up and work with high net worth families on real estate transactions as an agent, how you attract them through referrals, the differentiating features or value propositions you have, the patience advertising, and then also your real estate expertise. I love that story that you mentioned… As well as getting into the marketing and the online advertising.
Thanks for being on the show. I hope you have a best ever day, and we’ll talk to you soon.
Alex Goldstein: Thank you so much.