Stop Spending Money You Don't Have And Start Investing Your TIME w/Curtis Fenn

This is Real Estate Team Builders and I'm your host, Lars Hedinborg, the founder of Real Estate B School. The real estate team building world is driven by big egos who boast about how many homes they've sold or how much GCI they've earned. We don't hear much about their low profit margins, the long hours they put in each week, or the unbearable stress they endure. In fact, I've discovered that most real estate teams are losing money when you consider the amount of personal production their owners must do to make ends meet. I believe that if you want to profitably scale your real estate team without working crazy hours, enduring unhealthy levels of stress, or coming up short at home, then thinking like a business owner, building sustainable systems and empowering your team are absolute musts. You won't find any smoke and mirrors or hype here on my podcast, just the real world tools, systems and strategies that work. So if you struggle to balance growing your real estate business with focusing on the areas of life that truly matter, then this show is for you. Welcome back to Real Estate Team Builders.

I'm your host, Lars Hedenborg, founder of Real Estate B School. Today we've got Curtis Fenn, the president of Red X. And this guy's been in the industry for 16 years, serving us with technology solutions that just make the business easier. I am super stoked about the conversation today. I said, what's one thing we can talk about that will really serve y'?

All?

And it's the conversation around, like, return on time versus return on investment. And who are you asking questions to about how to build your business and, you know, what does it look like? And what do we mean when we say playing the long game in real estate and paid leads, you know, versus just like doing the actual work of a real estate agent who really wants to build a sustainable business. So, Curtis, what is up, my friends? Start out with just a real quick intro and then we'll get after the conversation today.

Sure. I'm Curtis, president of Red X. And like Lars said, I've been around for a very long time helping real estate agents implement new strategies to grow their business. Everything we do is centered around client acquisition, so helping you get more business in. In more clients in your business. And of course, if people don't know the history of Red X, but we started with expired listings and of course we moved into all kinds of different seller leads and different tools to help people be more productive. So that's, that's who we are.

Before we hit record. I Wish I would have hit record earlier because all this good stuff came out where I just, I simply asked you the question, like, what do our listeners need to hear? And you launched into like buying listings versus working leads. And we've got clients in real estate B school that come in and they're like, you know, well, yeah, we can pay a 35% referral fee to name any of the 10 providers of seller leads at this point. Because it's free. I'm like, it is not free, it's 35%. How in what world is that free? It's like, well, we don't pay until closing. I'm like, still, if you're following any kind of economic model, you're tracking your numbers, it's out of alignment. So go into that conversation a little bit and it's just going to bring up a lot for us to talk about.

Okay, so one thing I want to do is back up a little bit for the viewers and they have to know how I think about business and how I run Red X, but how I think real estate agents need to think of their business in terms of marketing. And everything in marketing is about a funnel. It's top of funnel, which is people who awareness and they're thinking about buying or selling real estate all the way down to the bottom of the funnel when they are selling, signing a listing, you know, or buyer's agency contract with the real estate agent. And that whole journey that they go on should matter to a real estate agent because where you're at in your business should determine on where on the funnel you're focusing. And that's what we were talking about is, is new agents that come into the business or not even new agents, but somebody who newly has a renewed sense of building their business.

Right?

They make the mistake of looking at successful agents and looking at where they're at and try to focus on exactly what they're doing instead of focusing on what they did when they were at the stage early in the process. And so top producing agents can spend time and money at the top of the funnel, meaning they can pay for Facebook ads and they can do radio and they can do all of these things that are very top of funnel. Trying to target anyone and everybody that's thinking about buying or selling real estate, that it works for them because they have time and they have money. Top producing agents or people who've been around in the business for a very long time, they can focus on that. They can focus on following up with past clients and trying to get referrals and going to Starbucks and spending four bucks on coffee with an old client to try to drum up new business. But that's all very top of funnel if you're not there, if you don't have, if you don't have a stream of income in your business coming in from past clients and referrals and your sphere of influence then you should be focusing towards the bottom of the funnel on people who are ready to buy and sell right now. And you don't find those people through Facebook ads. You find those people by going and knocking on doors and calling expireds and working fizbos or people have raised their hand saying I'm trying to sell right now. A referral from your sphere of influence that says I'm ready to buy or sell. Try to find those. But I think most agents don't understand where they're at in their business and they don't understand what different lead types fall into in, in that different journey for them to go after.

Yeah, that's awesome. So, and it kind of brings up the conversation a little bit and I've heard it before but I don't use it regularly. Return on time versus return on investment. So talk about that, that a little bit because all of this applies to wherever you are in the journey. So if you want to, you know, our listeners are they want to build teams or they're in the process of building a team and it's not going well or they're running a team and the margins are not where they because they're making the wrong decisions. And so a lot of people have gone down the like I'm just going to pay for a bunch of stuff versus actually putting the effort. And I know guys selling a thousand homes a year that are low single digit profit margins with their production included in the profit. Right. So it's this illusion to your point of like I'm going to go talk to the guy that's doing a thousand transactions or I'm just going to start doing billboards and radio and it's like there's no money in that. I promise you. We dropped out of that game, out of all of that game. So talk about return on time and, and return on investment and what do you mean like the activities that have to happen. Whether you're a top producing agent scaling a team or your entire team needs to be doing dollar productive activities. But it's more effort, investment.

Right. I think it's a pretty simple concept. You either have time or you have money. It's sometimes depending on where you're at in your business, it's hard to have both. And so if you're just starting to build your business, even if you're just starting to build a team, you either have more time or you have money. And again, it's about the journey that the buyer seller is on. Where are they at in the journey for you to try to connect with them and do that? If you don't have money, then the dumb thing would be to get a billboard or to start doing Facebook ads. I love Facebook ads. They have a great long term return on the investment. But it's a long term return.

Right.

You got to run ads for a very, very long time before you start to see that come in. And if you don't have the money to invest in that, then you should be investing time and the time that you can spend are doing those money making activities. Like again, I don't want it. I even said in the prerecording I don't want this to be a Red X commercial. But I really feel strongly about where you should spend your time. Well, spend time at people who are ready to buy and sell right now. And if you don't like expireds, then don't worry about expireds. Work, you know, for sale by owners. If you don't like for sale by owners, work pre foreclosure leads right now.

Right.

A lot of nobody's upside down in their house right now. So being able to work foreclosures and not have to deal with the short sales, a pretty good lead generation source right now. And the time you invest to just call those or knock on their door or try to talk to them, there's no money involved in that. It's just the time.

Yeah. And I'll say this, even a multimillion dollar, multiple hundreds of transactions real estate team, the leads that we got through Red X, so those three buckets, we even worked one lead source like investor leads for rent by owners or for rent by owners. Yeah.

Self managed rental properties.

Yeah. So those three lead sources accounted for about 25% of a multimillion dollar real estate team. So we never really got away from the return on time activities because we knew that if we're going to hit the economic model, which is no more than really no more than 12% of GCI can go toward paid lead sources, including your database marketing clients for life programs. So it's, there's not a lot of money there. A million dollar business can only spend, you know, 10 to $12,000 a month. And I Just got off a conversation with. They did 45 transactions and they're at $10,000, 10,500amonth on paid lead sources. And they're only doing 550k. So they're at. And only 30%, 25, 30% of the business came from those paid lead sources. So that's 200k and it cost them 100k. And I'm like, are you tracking anything? Right?

So we, we've done a lot of surveys over the years and one thing rings true every time we do a survey and we categorize top earners versus average earners and, and it's, they track the numbers in their business. They know exactly where to invest the money to get the best return. And that is a time dollar thing. A lot of people can break it down into this is how much I'm worth per hour and if I can talk to, you know, 18 for rent by owners in an hour, what is the return on that? You know, so you can really turn return on time back into return on investment. To really compare everything you're doing. Is it worth $1,500 a month to pay Facebook ads and then follow up those leads and filter the Mickey Mouse kind of crap that comes through on some of those lead sources? Or do you just pick up the phone and call a few people who are ready to buy or sell right now?

Yeah. So let's talk about some of the. You know, you've been in this world and you probably have some share some of the frustrations, you know, because you guys, even though it's self serving, you guys are, you know, I think paying other people to do something that you should be doing on your own is, it's typically not working out in our industry, mass media, they're setting prices on mass media in such a way where you can't make money on it. Zillow, you can't make money anymore on it. Like all of those things are just, they're out to not help us get a 10 times return. So what are some of the common, you know, challenges that you see? You know, I mean, this is clearly one of them. The whole like people want the easy button. But we talked about like all these paid seller legion, these pellet, these paid seller lead sources that have come up. And I forget if I said this before, if I said it while we were recording, but people think that it's free.

Right.

You know, and so what challenges do you see what's most frustrating when you're trying to like get into someone's psyche and mindset around, you know, like, stop doing that and start doing this. What are the few things you would tell them?

So besides you pointed it out, the most frustration is that people want. They think if they pay a higher dollar amount, that commissions are going to magically appear in their bank account. And that's not the case. I mean, even you still have to call somebody, you still have to build rapport, you still have to go through this journey to do a listing presentation. And so if you can expedite any part of that process, you're getting a better return on your time. And so that's one thing is people want it to be easy. And I'm sorry, but you got into an industry thinking it was easy, and it's easy to be mediocre. If you want to build a real business, you got to work. And so that's number one. Number two is I think that people are. And I alluded to this in the beginning, I think what's hard is people go, yeah, but I just talked to Lars, and his number one source of business is his sphere of influence. So I'm just going to go work my sphere of influence. And here's what a lot of people won't tell you. But if you haven't been doing good in your business, you don't have a sphere of influence. I mean, you have your Facebook friends. You might know the 200 people that they say you might have a relationship with your dentist and your doctor and the guy that sees at the grocery store every once in a while. That's a really hard thing to turn into a business relationship. And you should work those people. If you know six people, you should talk to them and you should, you know, find out if they know anybody buying or selling. But. But that's not how you build a business. The way you build a business is by working and getting past clients that build a sphere of influence that can pay you passive, easy leads and listings in the future.

Right?

So I think that's the hard part is convincing them that you know, because if I ask you right now, Lars, you. I mean, most of your business probably comes from repeat referral business, right?

Yep. About 40%.

40% 10 years ago. What were you doing to get those clients that would give you repeat and referral business? That's the question they should be asking.

Yeah.

And I happen to know yours because we met, you know, I think we went to the Kentucky Derby, however many years ago at a conference is where we met. And you were working, you were grinding, you had team, you Had a team that were grinders. You were on the phones and, and, and when you work those types of leads and they become your clients, they become great advocates, people in your sphere of influence that will continue to pay you business.

Yeah. And there's one thing that you kind of touched on and this was, you know, it brings up the thought like a lot of people have gotten away. I think they've just assumed that it expires are not, you know, are not a lead source when the market is 20 offers per property. But I mean we've, we've earned multiple like more than 500,000 GCI consistently in, in all the last three or four markets, three or four years. And we've done more in other years. But it's like, when's the best time to plant a tree? When I started years ago. Yeah. When I started with Red X and I and I started expired Fizbos and then for rent or you know, even some of the distressed leads which we never really got into. But now is certainly the time to do it. We committed to never stop doing it. But other agents are like fair weather, like, you know, they're not going to do expireds when there's less opportunity there. But there's massive opportunity.

We're still seeing a lot of people get a success from pulling expireds from 2008 and 9 and saying, hey, you tried to sell your home, you never did. And they have no idea how much equity they have now a decade later. So we're seeing a lot of success there. I think what you're saying that resonates with every top producer that I am talking to is consistency is key. Yeah, there's a few talking points and what you said, one is there's still a ton of expired listings.

Right.

And there's a lot fewer people that are calling them because of the false idea that there isn't any expireds. Right. So that's an easier lead source. Farming and geo leads and calling around just listed, just solds right now is really hot because as soon as you tell somebody how much money their neighbor sold their home for, and I guess that depends on what market you're in, whether you can do that or not. But then all of a sudden the neighbors are like, my gosh, I had no idea, you know, why don't you come talk to me? So we're seeing a lot of success in a whole bunch of areas where people, again, they're going, Well, I have 20 offers and I'm going to focus on that. We even saw a survey recently where there's way more agents working buyer leads right now. I'm like, the consistency of working seller leads over time is going to build your business. And I see that across every big team and every top producer we talk to.

Yeah, that's awesome. You touched on it a little bit. Just this concept of. And this is just a personal question. I mean, you guys have been. I always have massive respect for companies or individuals that are willing to commit to one thing over the long term personally. Let's just have a conversation. So why, why, why do you think we don't do that? You know what, why wouldn't we stick with expireds and just three to four hours a day is lead gen and lead follow up. Right. Why would we ever get out of that and try to hit the easy button on, on these different paid lead sources? What, what are you seeing, you know, going on? This is just. Could be two guys talking about where we struggle with consistency.

So, you know, I think shiny, shiny penny syndrome is a real thing. I mean, we do want to take the path of least resistance. You know, everybody wants to take a pill and get skinny and not have to do the work to get there. Even those of us that are on a podcast talking about how disciplined you have to be. If somebody gave me a pill, it would be hard not to take it.

Right.

And so I think that's what it is. Doing hard work is hard and as soon as there is a possibility that the grass is greener over there, we tend to take it. And I think that makes it hard is there's so much promise of what could be. Everybody sells possibility, but nobody talks about probability.

Yeah, that's really good. And I think I see the same thing. You know, I love, I use the physical body analogy all the time. It's like, you know, we're the fattest country in the world and for sure we spend the most on the strategies and tactics. Oh yeah, like everybody has a Gazelle workout machine in their house that they don't use otters and supplements and MLM systems. I've opted into that. Like, clearly by giving this person my credit card, I'm magically gonna have like six, six pack abs. And there couldn't be a better analogy than, than that. Like if you want to keep your physical body in order, you need to consistently do the things that are required for, for that. It includes discipline around your diet and then moving your body, you know, cardio and then some strength training. Like there's no rocket science. You don't need to consult with Anybody. But when it comes down to it, I don't know if it's information overload or Netflix is so darn attractive or like, it's so hard to be in real estate that clients are hard. The market's crazy. Like, it's multiple offers. Like, when you bring that analogy to real estate, what are you seeing? These top agents and team leaders, were they really struggling?

Yeah, I think you said it in the beginning where. So why don't we just lead generate for four hours a day? And I think because that's nearly impossible to maintain, it's not. It's just not sustainable. And I think people go into it intensely and I think consistency is better than intensity.

Right.

So you don't have to do four hours a day. Just do. Just try to make 10 contacts.

Right.

Maybe that would take 30 minutes if you have a decent lead Source. Right. Maybe 15 minutes a day is better than what most people are doing, which is doing things to make them feel like they're being productive when they're really not being productive. Here at Red X, we call it totes progress. Because I've done this a thousand times. I'm like, okay, I'm going to get organized. I'm going to clean out the garage. I go to Home Depot and I buy plastic totes. And then I set them down, and then six months later, there's five empty totes in the garage. But the act of doing something made me feel like I'm progressing toward my goal. But really, you just bought empty bins, empty totes, and you didn't make any real progress towards what you're trying to accomplish. And I see a lot of activities in real estate that way, and a lot of tech companies tricking you into thinking, if you buy this, look at, we're getting you towards your goal. Sign up for this, we'll get towards the goal, start paying us to do ads, and you're going to get you to the goal. And it's all just empty bins. It's all just totes.

And I think, you know, I don't know if the business. There are so many folks that think they're going to have the solution just to make the business just an easy button, you know, where you literally just. But they're going to marginalize you in the process if they ever figured out. And when you think of the core activity of sales forever, it's going to be meaningful conversations. Like, how many meaningful conversations do you have every day? How skilled are you in those conversations? And even on the days where you Dropped the ball. So even on the days where I like devoured a cinnamon roll before we started this, so even this is not on my plan. Right. So I was like scoffing down a cinnamon roll my son's birthday today. So I'm still going to have a good dinner. I'm still going to, you know, I'm still going to try again tomorrow to not eat a cinnamon roll. And so I think a lot of times we're like, well, screw it, I didn't make my contacts on Monday. It's Thanksgiving on Thursday. As we're recording this, we're right before Thanksgiving. The holidays are coming up. I'm not going to start my expired.

System until I'll just start on January.

Yeah. So I mean, that's a real thing. It's real psychology. I've done it over and over in different areas of my life. So what encouragement would you give to somebody that is of that mindset where they get off track one day? And I mean, you guys do everything at the highest level in terms of helping and prospecting, boot camp and like all of that. So what have you seen? What tools? How do you help people get through that?

So personally, I'll just give you some personal things. For me, there's a few books. One is called the Willpower Instinct, which is a phenomenal book that actually goes through the science of why our brains do what you just explained, why we borrow from future things like I'll start in January, why we put off, why we procrastinate. And so just if you want a good audiobook or a good book to read, that helps with some of that and understanding, because once you have understanding of why your brain is doing it, then it's easier to start fighting against and do that. The other thing is, I think there's two thoughts. One is another great book is called Punch Fear in the Face and start. And in that book he's quoting a psychologist. And the psychologist works with famous musicians and he would talks about how most of them are depressed and unhappy. And he goes through and he says out of thousands of people he's talked to the inner voice, you know, rarely is a positive inner voice. And it really taught. It really tries to tell you two things. One is you can't. And the other thing is you have to do it 100% right. And everybody should relate to this. January comes and you're like, I'm getting the gym membership, I'm going all out and I'm not going to eat a single carb. And, you know, I'M going to count every single calorie and all my macros. And you do that for like four days because the inner voice, like, you got to, you got to go, you're going all out. And then after four days, then you eat a cinnamon roll and your brain reverts to, see, I told you, you can't.

Right?

And then we give up until the next time where we feel the motivation to do 100%. And I think what people need to do is they, is they need to think of consistency. Get a simple lead. You don't have to pay a lot of money for data. You don't have to pay a lot of money for leads, right? You could pay $20 and have enough leads to just try to make five contacts a day. Just five a day. And once that becomes a habit and a routine, maybe you could up that, right? Maybe you could up that to 50 contacts a day. And what would that do for your business? Because you don't have to do that for very many years before you'll have a database and a sphere of influence that will start giving you. In addition to the transactions that you get from the people that you're trying to get money, now you're getting all of the referral and relationships from the people that you're putting into your CRM. So I think they need to quit trying to do it all and just say, we even tell people. And my sales guys think I'm crazy, but I'm like, quit selling them six different lead types. Like if they've never done it and they don't have a system, they're going to go all out for four days and they're going to call us and go, I want to cancel.

Right?

Which they do. So I say just sell them one lead, type just one thing and tell them to give it 60 days before they try anything else and then add it. So start small and be consistent. Don't think you have to do it 100%. That cinnamon roll is not going to throw your whole thing off the plant. Some is better than none. I mean, you could go on and on, um, with the one liners there, but you just gotta start and you gotta start small and you gotta be consistent.

Yeah. And, and, and this dynamic never changes. So whether you're a top agent or you're, you're leading others in a, in a team environment, real estate team, I mean, your team is dying for you to step in and provide a little bit of consistency. And I see a lot of team, team builders out there that you know they, they just abdicate the responsibility for Legion and it doesn't get done. And they're frustrated and, you know, they never had a system in place to begin with and they were sort of paying for leads and that was their solution all along. And there's just no, you can't build a profitable, sustainable business on just the easy button. No accountability on where you're spending money. No accountability, no lead management practices or any of that. So this has been awesome. What is the easiest way that these.

Guys can connect with Red xredx.com or they can call us 800-731-7339 and we can help them get started. But also just based on what I said, you don't have to buy anything from us for us to help you get started. We'll teach you how to do it without spending any money with us. And we have a tremendous amount of training and resources and everything that you can get involved in to help start to grow your business.

Yeah. And so I'll say this, and the purpose was not to plug Red X. There's only two things that I started and I never stopped. Red X. My CRM was one of them. Still to this day. I signed up with them in October 2008, still with the same CRM and red X. I don't know exactly, but probably around that same time frame, probably 12, 13 years in that we've never stopped with Expired and FSBOs. Like those programs have just always been running in our business and they've always yielded 250 to 750,000 GCI. Like just consistently in a market where like supposedly there's no expireds. Right. Which is the last three, four years in my market. So you guys definitely owe it to yourself to check these guys out. These guys are, they're just a servant heart mentality in terms of like single focus. It'll never change. They're going to bring the easiest, the quickest path to money that I know of in the real estate industry. So I love you guys, I respect what you're doing and if you guys have any questions, go to red x.com about there. If you, if you're just on your journey of real estate and you're wondering how to navigate these different stages, I've said it before, you can go to realestate Business growth dot com. Nothing to sell you. It's just the real estate Business Growth Navigator. It'll help you understand the six stages of growth that you go from agent to owner, the questions you should ask yourself, the tools and systems to implement, you know, how many hours you should be working, how much money you'll be making and and all of that. So check that out my friend. Appreciate you. We need to follow up soon and do a follow up to this here real soon. Thanks brother.

Okay. Thanks so much.

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