Welcome to the More Cheese, Less Whiskers podcast. Today we're talking with Shane Melanson, a commercial real estate agent from Calgary, Albert, Canada.
Shane and I went through a little process here today to hone in on his specific target audience and outlined a whole plan to position him as the ‘mayor’ of that category in Calgary.
You're really going to enjoy this episode. I always love to talk about real estate, and there are so many parallels between the commercial side of real estate and all the residential things we have going on. You’ll see that happen here as we make those comparisons and end up with a really good action plan that Shane will be able to put into place.
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Transcript - More Cheese Less Whiskers 071
Dean: Shane Melanson.
Shane: Dean Jackson.
Dean: How are you, sir?
Shane: I'm great. How are you?
Dean: I'm fantastic. It's Friday. It's evil scheme hatching day, my favorite. Where are you calling from?
Shane: I'm calling from Calgary, Alberta.
Dean: Calgary, Alberta. Alright. Here we go.
Well, I'm in Winter Haven. I'm in Florida. It's absolutely perfect today. It's one of those room temperature with a breeze, and not a cloud in sight days. So all very exciting.
So we're recording right now. We've got the whole hour here to hatch some evil schemes for you. So, yeah, bring me up to speed, and then we can jump off in a direction that ... See what kind of focus we can have here for the call.
Shane: Okay. That sounds great. So, I guess, just a bit of background. Right now I do two things. One, selling commercial real estate. Primarily investment sales, so that would mean income-producing properties here in Calgary. And I would say over the past eight years I've been doing this, and I've actually worked in the US, but I try to focus a little more closer to home. With three little munchkins I prefer to travel less, if I can.
And I also do one or two syndications a year, where I'll raise money from a group of high net worth individuals and friends, and they'll put their money in and either it'll be a development or some sort of a value add where I can utilize my skills to make them money, and hopefully myself as well. So those are the two primary businesses that I'm in. Syndication is certainly where my passion is. But what I've realized is that if I'm solely focused on just syndicating deals, and that's my only source of revenue, then the temptation is to do deals that are maybe more risky or-
Dean: Yeah, I get it. You're just thinking, "Okay. I gotta do something."
Shane: You force deals.
Dean: And so the good news is that your commercial ... The real estate sales you do, you're focused and you find opportunities through that in way, right too? Yeah.
Dean: When you say to income-producing properties, are you selling to investors or to end users like of industrial buildings or-
Shane: That's a good question, I would say primarily I've worked with ... it could be high net worth individuals that are purchasing properties with the intention of ... Some guys, we just put a property under contract and they'll be actually tearing it down and then redeveloping it, but generally speaking, I've focused more on apartment buildings, industrial buildings, and some retail. So they'll be different components to each property.
Dean: Gotcha. Okay, and each of those markets are individual kind of markets. The good news is what I see immediately is that there seems like an opportunity to do in parallel both of them and anything that you're doing to improve the brokerage side is going to bring you better opportunities on the syndication side, both getting to meet different investors and seeing all these different opportunities, so that's kind of a cool thing. You mentioned a lot of things like apartment buildings, is that your primary focus? Would that be something that ... Or is it more commercial properties?
Shane: Yeah, so I'll break it up into two. On the brokerage side, ideally I would have like to have focused on apartment buildings. The challenge is, and I've followed you for quite some time, and when I started to really drill down on the number of sales that occur for apartment buildings here in Calgary and surrounding area, it's relatively low. The turnover is less, and I would say that of the universe of rentals in Calgary is about 35,000 of which 15 to 18,000 are controlled by six groups that predominantly do not sell. When they buy, they hold. I decided that it would probably make more sense to go into an asset class where there was a lot higher turnover and the ability to utilize some of the marketing skills that I've acquired over the course of investing and learning from yourself-
Shane: So industrial, even though it's not sexy, it has tremendous turnover, you've got a lot of various owner-users that generally have to scale up or scale down, they sometimes buy, sometimes build the suites, so there's a lot of potential for revenue in that asset class. That's answer number one and then on the syndication side, I have an apartment building with a group of investors, and I would like to do more of that, but I'm also cognizant of where various assets are in terms of ... Right now, apartments are trading at five caps, and so it's really difficult to justify buying and so we're doing an industrial business condo development right now, and so I can be a little more flexible, although I think in the long run, I would prefer to buy value-add apartment buildings, but I'm not going to sit on my hands forever. If there's an opportunity and I have the skill set to be able to execute on it, then I can vary a little bit.
Dean: Sure. Is Calgary the place for you? Is that your 20-year vision here or what's your geographic aspiration?
Shane: My wife is from here and her family, so I would say that we are probably, and with the kids in school, I don't envision moving any time soon-
Dean: Perfect, it's good to know, and the reason I ask it, the reason I ask that is just for that, you know, that there's ... Your in a business, real estate that's a long-term business, there's a lot of equity that you can build in a relationship equity, knowledge equity, market equity, experience equity, in regional area there, so if you're taking even Alberta as the example there, there's a lot of value in knowing that's where you're going to be. A lot of times people are waffling on their geography, so it's hard to plant the roots of a giant oak tree if you're a tumbleweed that wants to kind of roll all over town, or all over, not settled. That's encouraging that you're settled in Calgary because just the way it is, it's not, you're in a analog physical world. It's not a digitized thing where you're going to be around there, so that's all good kind of look around the context of everything here.
I had a question about the apartments, you said that there's about 35,000 units in Calgary of which basically half of them are controlled by six groups. Do they control the top end of the multiunits or are they spread all out, like in the 35,000 that are not owned by those six, are they four, six, 12-plexes kind of thing versus the 100, 200, 300 unit?
Shane: It's interesting, in Calgary, there's not a lot ... So a few things. There hasn't been a lot of purpose built rentals in Calgary in the past 10 to 15 years, so really the supply if anything has actually shrunk. Let's say in 2008, there was probably closer to 40,000, but then what happened is condo developers started to buy them and convert them. So the universe of actual rentals shrunk. What we're seeing now is there is a few builders that are now creating larger purpose built rentals, so there's an opportunity I would say in the suburban market and even in the downtown and Beltline, there's some high rises being built and sold. But I think to your question, I would say the Boardwalks and the Mainstreets and these larger companies, they generally have owned these assets for quite some time, and I would say that their product is probably 1970s to 1980s vintage-
Dean: Right, yup.
Dean: So that's interesting, is there a supply opportunity?
Shane: I think so.
Dean: How are the vacancy rates and ...
Shane: If you looked at it and you said okay, well there's only 35,000 apartments here in Calgary for rent, and then you look at Edmonton, which is a smaller market, and they've got closer to 70,000, so double, vacancies are very similar. What's happened is there's just a really large shadow market where investors or yeah, I guess it would be generally investors, have put their properties into the rental pool, so vacancy is still, it's actually crept up quite a bit since oil really took a slide in 2015-
Dean: Sure, yeah.
Shane: ... so we're at about seven percent vacancy. I still believe that there is an opportunity for rentals, certainly in the Beltline and maybe even in downtown. The challenge there is just land is quite expensive, so to make the numbers work, you've got to have a very low cost of capital, but in the suburban areas, there's some guys that are doing purpose built rentals and have been quite successful.
Dean: Okay. So then what about on the industrial side?
Shane: What do you mean?
Dean: Describe what's going on there, what the opportunity is.
Shane: I don't have I guess as long an experience or as much experience in industrial, but what I'm seeing is over the past two years of doing it now, there's a lot more interest in business owners owning their own industrial space. So industrial condos, call it 2000 to 10,000 square feet is growing in popularity. I personally feel that there's no one quote unquote that's "in the market" that's kind of hanging their hat out as the industrial condo expert, something that I'm working towards because I've got some experience with it, and I had mentioned I'm developing one myself, so I understand the zoning considerations, the construction costs, so I find it to be quite fascinating and pretty exciting.
Dean: That's awesome. Let's focus on that, 'cause that seems like you've got some passion around that. The apartment issue seems very institutionalized, you know? The way you described it, it seems like a more ... You've got a more available market for this stuff, for the industrial stuff. How many units would there be in Calgary that way? How many of these two to 10,000 square foot units would there be?
Shane: I don't have that off the top of my head. What I do know is that in Calgary, there's about 130 million square feet of industrial space, and to compare that to Vancouver, which is a much larger market, there's 180 million square feet, and then when you look at the condo market, which would be actually for sale, there's about 400,000 square feet of industrial condos that traded in I guess the last 12 months.
Dean: Mm-hmm (affirmative).
Shane: Versus Vancouver, which had about four times that.
Shane: What it tells me is there is a market, there a certain kind of ethnic backgrounds that prefer to own versus rent, and so I think that there's just going to be a continued growing demand, especially when you look at the owning versus leasing. The argument is more and more compelling with low interest rates.
Dean: Right. Gotcha. And then when you get up into this next level here is there kind of a vibrant market in that 10 to 30,000 square foot standalones?
Shane: Yes, there is. I would say that there's a fair amount of owner-users that look within that type of properties and then you'll have local investors that buy them as well and do ... For a little while there, there was a big push on sale-lease back's where they would sell out to private equity firms and then they would lease it back at inflated rents, but seeing less of that now. I think it is more owner-users controlling their own destiny and then just local investors that will buy and they like industrial because you're dealing with one tenant on a five-year lease.
Dean: Yeah, exactly, and sustainable. That's kind of exciting. Now, I look at that in a lot of ways with a lot of similarities to the residential market in terms of, you know, I look at those 10 to 30,000 square foot as the four-bedroom luxury home of a residential market, and the same kind of market making opportunity is available, like you're cornering the market on those. When you look at those standalones or you look at the condos, and let's start with the condos because it seems like there's quite a few opportunities there. Would you say that there are 1,000 or more of those condo units? Or how many would you guess that there are?
Shane: I would not peg it at 1,000, I would peg it I'm just kind of doing some math here. Yeah, there's probably less than 500.
Dean: Okay, perfect. There's the thing that you know that those are there, then what kind of turnover is there on those condos?
Shane: I'm going to have to kind of guess a little bit, generally I would say you're kind of five years, because as businesses grow, they may need more space or the unfortunate reality is some businesses just go out of business, and so they're forced to sell. I'm kind of dealing with that situation right now with a client. Yeah, I would say on average, it's probably in that five-year range.
Dean: Okay, so that means that there might be 100 or 50 that might sell somewhere in that range over the course of the year?
Dean: I'm just trying to get to a number of the total yield here. If we were to say this is the market, we went that way, there's 50, and what's the average price or median price?
Shane: I would say you're probably ... I used it on the larger end of 10,000 feet, but I'm noticing guys doing a bit smaller, but let's just say for easy math, it would be about a two million dollar purchase price.
Dean: Okay, and so when you look at that 50 times two million, you're at 100 million in volume, is that right? Yeah?
Shane: Yeah, that might be high, but I mean there's a lot of industrial that trades on an annual basis, so if that included some kind of standalone buildings, that would be fine.
Dean: Okay and what would be how much you would make on one side of a transaction like that? Yeah?
Shane: I would say three percent. Generally as you get from a smaller commercial properties, you're able to push your rates, so three percent.
Dean: Okay, so that's about what we're looking here for about three million dollars just on the listing side, commissions on those, right?
Dean: Then potentially another three million, but when you look at just the listings, I'm at three million dollars is about the range that we're looking for that somebody made that much money over the last 12 months in that segment of the market. Is there anybody that dominates that category or is it an open ...
Shane: I wouldn't say that there's anybody that dominates it. What I would say is on-
Dean: Okay. I nominate you.
Shane: Okay, perfect.
Dean: I mean let's just appoint you to the mayor of that position 'cause you're uniquely qualified for it, there's never going to be a committee that gets together to appoint anybody else, so I'm going to go ahead and appoint you now.
Dean: Okay, so when we look at that, now it becomes a math game. Now it becomes that these are ... there are 500, and you'll check the numbers on these, 'cause there might be 700, who knows, that there's 500 of these industrial condo owners, and they're visible prospects, right because you can identify where they are, you look at them on an aerial map, there they are, this is who owns them according to tax records or however you get that information there, and now it becomes almost exactly like what we do on the residential side. So we offer for our residential realtors, I have a program called Getting the Listings, and what we do is mail postcards to all of the lakefront homes in Winter Haven, offering the October 2017 report on Winter Haven lakefront house prices. The same thing would apply over here, where we would offer a report on the October 2017 report on Calgary industrial condo prices. So when you mail that as a postcard to the 500 or 700 owners there, and by the way, the ROI for you on this with that price range is going to be pretty phenomenal.
Dean: It's pretty cool. So you look at it that you're sending that. Anybody who's thinking about selling their condo is going to want to know that information, right? Because the first thought that they have is, "Well, what's our place worth?" It may be that they're going out of business and they need to sell, or they're growing and they need more space, or they're getting to a point where they want to build a standalone building, they've made it, they're going to go out into a detached building.
Dean: But finding them that way, finding that category first, offering that information. If you just every month you mailed a postcard offering the November 2017 report on Calgary industrial condo prices, and the December report and January report, you do that every month, that's going to bring the people who are entering the process of thinking about selling their building to the surface here. They're going to raise their hand. Now you've got this opportunity that you know who some of these 50 people who are going, you know, the next 12 months, 50 of these people are potentially going to sell, and if you know them ahead of time, that gives you an advantage here, right?
Part of what you also get to do is be a market maker on this, so that while you've got the visible prospect of an industrial condo owner, you also now need to find the invisible prospect of somebody who's looking for a condo. Somebody who's looking to start a business or to buy one. The good news is that some of them may be renting some of these units right now, and they may be looking to buy one of their own, or it may be a startup outside of that. But the opportunity that you have is where would somebody who's looking for a condo look in Calgary? Where would they focus? What would they be doing?
Shane: That's a great question, because in commercial real estate, there's really no central ... like in residential, you go to MLS, and that's where all the properties are. I've done a fair amount of keyword research to find out what people are typing in, that might be searching online.
Dean: Oh good.
Shane: And so I think that there's an opportunity to drive people with pretty qualified Google pay-per-click for example. The other way is fairly old school, and that's where signage comes in, but I would say a lot of these guys if they're driving into work, they'll just see signs and often they'll call almost similar to residential where you see bus benches or you see one guy in the community that seems to have the most signs. I think that they generally get the phone calls, right?
Dean: Right, yeah.
Shane: The listings beget buyers essentially.
Dean: Yes, of course they do. That's the same in residential. It's exactly the same.
Dean: Is there a Calgary business times, or business newspaper, or business journal?
Dean: Where people would advertise commercial properties? Where would, if you had a listing, you advertise that listing?
Shane: Often the way that it is done in commercial is most guys would send it out to their database, so kind of step one, the first 14 to 21 days of a listing, you would send out to your political database that you think would be investors or buyers, and then beyond that, you would send it out to the brokerage community, and so in my database, I might have 90 industrial brokers, or guys that would be focused on industrial real estate, that would be how I would reach out, and then each one of those guys might have 50 or 100 buyers that they might talk to, so that's ...
Dean: Yeah. I got you. So what I would be looking for is a way and a place to offer and put together at the same time, a guide to Calgary industrial condo prices to show what's available and what the options are for somebody thinking about the category, looking to find category buyers, not to necessarily wait until you have a listing to find the buyer because if you can, and that's the way we would do it for on the real estate side, we'll run in Homes magazines, an ad offering the guide to lakefront house prices.
The good news is it doesn't sound like anybody's really doing anything like that in your market, which is an advantage because you've got a clean runway there, you know?
Shane: Yeah, and I'm curious how you would maybe think about this. They're predominantly business owners, and so I don't know if let's say they're going to the Chamber of Commerce, or if there's other maybe more industrial style ... I haven't done enough research to kind of look into this parse, but I'm wondering if they would be reading trade publications for example, that they might be electricians or general contractors or something along those lines where those would be your typical buyers of these smaller bay industrial condos and get in front of them at that point, then you know ...
Dean: You're right. Yeah, absolutely, and that's what it's really got to be about is finding how can you identify those. Some of them, if you're mailing the postcards to the owners of the condos, which may be at a different location than the ... Consider this difference of the owner-users versus owner-investors, so you're going to the ones that are investor-owned at the address that would be the tax record, who actually owns the building, when on the other side, you've got the ones that are user-owned and you're mailing right to them, you're mailing the postcard, but a good source of buyers for the units would potentially be the businesses who are renting one of these units right now.
Dean: And so having that differentiation right, knowing which of these is owner-users and which of them are investors, so that you know the businesses that are renting the space versus the businesses that own the space and you can target the renters differently than the owners.
Shane: And so when you target the renters, for example, is this where you would use the guide to industrial condo prices?
Dean: Yeah, absolutely.
Shane: That would be the guide to condo prices that you would make? Right, okay.
Dean: Yeah because that's the thing that they want to know too. They're wondering, "Wonder how much these things sell for and what's involved in buying one." What's the market for financing these? Is it fairly easy to finance them?
Shane: It's actually quite incredible. The BDC has done a few loans with me, and they will do up to 100% financing-
Shane: ... and they'll actually finance the entire build out as well, so if a company has a strong balance sheet, yeah they ... And I've actually got that for clients, so yeah, zero down industrial real estate.
Dean: Right, so there's an opportunity right there that now we create some other opportunities here where if you're looking at this, both the information, the guide, but also then giving somebody an opportunity of what this actually looks like. If they can get an industrial condo with zero down and whatever that would cost per month, it might be less than what they're actually paying to rent the unit similar. You know?
Dean: So it's no different, you know, a first time home buyer is not much different than a first time industrial condo buyer because they're like the same kind of thing. They don't know the process, they've never been through it, their business is just getting to the point where it's got legs, it's successful, they've got some extra money, it's going to make sense that maybe the next step in our journey is to buy, but they don't know the process, and they maybe think that they gotta have 25% down or something. They may be thinking, "We've got to have half a million dollars to buy a building." Or to buy a condo.
Shane: And I'm curious, would you look at doing ... because my experience with industrial buyers is your absolutely right, I hadn't even kind of thought that through, but they really don't have an appreciation for purchasing commercial real estate, and so it's quite daunting, and I'm wondering whether it was a webinar or some sort of a presentation to-
Dean: Workshop, yeah. A luncheon.
Shane: A workshop-
Dean: Yeah, there's all the thing is you're looking at it, laying it out, we've gone through the profit activators here kind of in the background that we've selected a single target market of these two to 10,000 square feet condos, we've got in profit activator two, a way for them to raise their hand, both the buyers and sellers, right, the offering report on the industrial condo prices, and then in profit activator three, which is where we are now, it would be about educating and motivating people. So each month that you would send out the Calgary industrial condo report that would have all of the updates of what's been going on in the market along with some educational information about what kinds of things people would need to know about selling their industrial condo or buying their industrial condo.
And telling stories of other case studies in a way, like here's how it works or here's who's on the move kind of thing, right, 'cause everybody loves to be announced and acknowledged, so it's kind of a step that if somebody's expanding, they've gone from their garage or their workshop to renting a small space and now they're in a 10,000 square foot industrial condo of their own, that's a milestone in the business. Everybody loves to be acknowledged like that, everybody kind of sees all that going and within the pages of you telling that story, another business that's renting at 2,000 or 3,000 or 4,000 square foot space sees themselves in it, and now showing that they can do this with zero down and showing what the monthly payments would be, they kind of get inspired by that and have an opportunity.
That's all very education-based, and you becoming the voice of all of this. You've appointed yourself to the position of mayor of the industrial condo world in Calgary, you become the voice, right? The information leader in that, and then in profit activator four, it's about what are the offers that are going to let people step out of that onto the next step. It could be what we do on the residential side is we do a daily tour of homes, at 10:00 and 1:00, we do a home buyer workshop at the library on the first and third Thursdays of the month. We do a home loan report to find out what the best home loans available are, so when you start to parallel that and take that over to the industrial condo side, when we're talking about the buyers, we might look at doing an industrial condo tour, or doing a workshop where you teach people that process.
Maybe you've got some neutral, the library probably wouldn't be the right tone for the space for that, but maybe it's at the Chamber or somewhere where it would be an educational kind of environment, not like a sales office in somebody's space, but a neutral kind of space, and then offering the free industrial condo loan report to show the different options available for zero down or for ... 'Cause if you've got a program that can get somebody a zero down loan, it's like that's the jackpot. Everybody is very excited about that. It's funny as you say that, I'm just now, before in between my podcast, I was just editing and reading. I had a writer put together a guide for a first time buyer program that I'm putting together with zero down, that's a good place to start, you know?
Shane: Right. Okay and then-
Dean: And everything that you're doing there can be also modeled then in the next level up of the 10 to 30,000 square foot standalone buildings, you look at those as free standing industrial building prices. That same model stands true, but you're speaking to the right audience, you know?
Shane: Yup. Okay. Now for the sellers, what offers would you have them take on the next step for example?
Dean: Let's see if we can craft some because on the residential side, we offer the pinpoint price analysis to show what their house may sell for in today's market. We offer a room-by-room review, which shows people everything to do and not do to get their house ready to sell, and we offer our silent market, where we say, "We may be able to sell your house in as little as 24 hours without even putting it on the market", and that's what you really have the opportunity to do when you’re doing this kind of category market maker approach. You don't need their listing to find buyers. If you can figure out how to find industrial condo buyers without their listing, that's a cool thing, and it may be even, when you look at it, that you may talk about the category. I mentioned on one of the podcasts I did some work with a company in Canada that does talent recruiting, they do IT contractors, and in Ottawa, what's the big company, Nortel, is that the big tel company?
Shane: Yup, yup.
Dean: Okay, so at the time, Nortel was one of the big companies in Ottawa, they probably still are I guess, right? We would run in the business journal or the tech journal, the ads that looked like news articles that said, "Unix Contractors Commanding $55 Per Hour", as an example of one of these things. It looks like a news thing, our audience were people who are Unix programmers, but are employees in a $50,000 a year position, which you could do that math, it's about $25 an hour, that's how they would calculate out what they get, so they see this, that Unix contractors are commanding $55 an hour, that's twice what I'm making, so that whole thing would get them to come to a website where they would get updates on Unix contracts that are available.
So when you start thinking about perhaps this opportunity as highlighting as news the fact that the BDC is offering zero down loans for Calgary businesses, that's where you're getting people to inquire and moving forward in that way.
Shane: Yes. It's funny 'cause I'm actually going for lunch with a gentleman at the BDC, and I'm actually now thinking that they will benefit as much as I do from this database, and they may try to-
Dean: They may partner with you on this.
Shane: ... you know they have deeper pockets than me and whatnot, so I'll have to have a conversation with them.
Dean: Yeah. But yeah, there's the mechanics of it are you've got a great little thing there, and it's going to be very low cost. You look at your, to send those 500 postcards to the 500 owners, that's not going to be very much at all when you look at the outcome of that. When you look at that on the line is a $60,000 commission, right?
Dean: So you could mail a postcard every week to every one of them, I mean no, that's the way you look at it, right? Is how long do you mail to get to a point where you are one transaction is going to pay for this for five years, 10 years, forever for you. You're talking about maybe it's a $6,000 investment over the course of the year.
Shane: Yeah. Yeah.
Dean: Yeah. And it can be that simple, I mean it really is that simple.
Shane: Yes. This has been very ... The way you kind of frame the roll out of this has been extremely helpful, I've been taking notes and obviously I know you're recording-
Dean: Yeah, the great thing is you're going to hear it completely different. You're going to like, you've missed a lot of it just because I know what that's like, right? You say something and your mind is already thinking, "Oh yeah, that", and then you snap back into attention, so you've probably missed half of it, so hearing the rest to fill in the blanks is going to make a big difference, but the music of it is that you've got the makings of a really great sustainable system there with a long-term view.
I just finished a four-year case study on our Getting Listings program with one of our realtors in Toronto. He mailed for four years, and we recorded all of the results that he did, so over the four years, he spent $50,000 mailing postcards to this group, to the homes in Scarborough, and over that four years, he made $543,000 so yeah, an 11 times return on the money, on the spend, and but what was amazing to me was that he mailed for five months before he did his first transaction from it, so he mailed September 'til February, got his first closing in February, which put him into ROI positive by a great margin right away, and he never looked back. It was then just building, building, building, so it cost him about, I think it was $1,800 or $2,200 or something like that to get to that first transaction where now it was self-funding for the rest of the four years.
But what was amazing was that in that time, between September and February, he went on that there were 15 transactions that happened with people who responded in those first five months over the next four years.
Dean: Yeah, it was fascinating to see it all laid out in an infographic, where we lagged back the transaction to see when they actually responded, so three and a half years later, somebody who responded to the very first mailing in September of 2013, just did a transaction in July of this year.
Dean: So almost-
Shane: So they've been on his list for ...
Dean: Yeah, almost four years later. So the equity of that, what you're going to be building is as soon as somebody responds, the equity of what you've got there is phenomenal. You're going to have really the only viable marketplace for condos and buyers, right? Like if you're mailing the postcards and you have all these people who've responded, selling your industrial condo is not an impulse. They're not going to wake up and put a for sale sign on the building that same day. It's a process of thinking about that and then where are we going to go and all of that, but once they raise their hand, you now know who those people are that are thinking about this. So at the same time while you're looking for buyers, now you've got the opportunity to below the surface, match these people up. You're the common link. You've got a list of people who are looking to buy, and you've got a list of people who have raised their hand that they might be thinking of selling.
Shane: And you know, in industrial, and even in commercial real estate for that matter, I know with residential there's I guess more conflicts of interest when you're double ending deals, but in commercial, it's like well known, accepted, you're dealing with more sophisticated people, and the sellers kind of expect you to be able to find the buyer if you will, that's really why they end up going with you and the guys that seem to be the most successful are the ones that have the ability to I guess be a market maker, like you're saying.
Dean: Yeah, and if every once in a while, these people they respond for the report, and you send that and then every month you're sending the updated report, and then every once in a while, they get a personal message from you saying "Hey, Tony, I'm showing condos in your complex, and I've got a buyer who's looking for one, I don't know what your plans are, but I thought I'd check in, tell them about your place." If they're not ready, they're going to say, "Oh we're not ready yet but keep us in mind", or "Thanks", you're making that impression now that if over the next year or 24 months, you've had five or six interactions like that where you're adding all the valuable information to them, you're showing them what's happening, you're evidencing all the success that you're having, connecting people with these condos and you're communicating with them three or four times that you've got a buyer when the moment comes that now they're ready, why would they call anybody other than ... Well, let's check with Shane first 'cause he's always got buyers.
Shane: Yeah, yeah. I agree. I really like this.
Dean: I do too. I think it's a winner for you.
Shane: I know that we're nearing the end, and I want to be respectful of your time.
Dean: Yeah, what did you hear?
Shane: Quickly, well there's one question I want to ask and if it's too big a topic, I understand that-
Dean: No, it's okay.
Shane: ... it's related to I guess I've been looking at launching a podcast to kind of develop relationships with and stay in touch with these business owners so that there's kind of an ongoing conversation with them, number one, and number two, to me, it's like an easier way to connect with someone versus on a first call for example, on a podcast versus hey are you interested in selling your property. Those conversations, they are calls I get quite often. So I'm just curious your thoughts, or any suggestions as it relates to that?
Dean: I think that's a great idea. I think it's a fantastic idea. To kind of highlight what's going on in Calgary businesses. You need to elevate your position in the community as an impresario. You're a guy who is involved in the business community, not as a salesperson but as a valuable part of the community and I think highlighting those businesses is a great thing. You could start out with milestones. You could have a podcast that celebrates companies that are celebrating their 25th anniversary, that when they make it to 25 that you're kind of talking to the ... Especially if it's a founder, that you could talk with them, that would be a really great inspiration story or talking to startups, businesses that are just getting going or businesses have hit that 10 year mark.
It's such a closed community that there's really 1,000 people that you need to kind of get to know.
Dean: And that's all. Having that level of focus and that level of depth to it is going to pay off because it's a big opportunity there.
Shane: Yes. I'm just writing kind of furiously 'cause yeah, I've got a big smile on my face 'cause I've got a couple of ideas just based on exactly what you said, so.
Dean: Oh good.
Shane: Well this has been incredible. Generally I think you look for some sort of a recap, would that be-
Dean: I want to hear what you heard, how we changed you here, yeah.
Shane: Sure, so I'll try to summarize it as best I can, and I probably won't ... I'll kind of go in sequence of the profit activators that we touched on, but first of all I've got a very clear target market now, and really specializing and honing in on probably to start with the industrial condo owners, who could also be renting. And then down the road I can expand into owner-users of freestanding buildings of kind of 10 to 30,000 square feet, offering them something to start that conversation. Then buyers, it could be a guide to industrial condo prices, and basically taking pictures and videos of all the new developments and maybe some existing developments that would have vacancies, and then on the sell side, or listing side, I could send out reports on a postcard that would then get them to respond and ask for the industrial condo prices of transactions that have taken place over the past say six or 12 months.
Then educating and motivating them to have a conversation with me. I can look at doing workshops with information around financing, with information around potentially touring some of the industrial buildings. On the sell side, whether I call it a pinpoint price analysis or something maybe a little bit different, but essentially giving them some sort of a valuation and range, like a broker's opinion of value, but I would have to make it sound a little more interesting than that. And then this silent market without going out, I mean that is like music to a lot of these guys' ears, they generally don't want to have signs up because their employees get nervous and they don't know what's going on, so that's a really hot button for them.
Then obviously just staying committed and making sure that I do these mail outs on a consistent basis, knowing that it's going to take some time to potentially generate the first business, but because the transaction size is so large, it's worth the investment up front.
Dean: Absolutely, yeah. That's a great summary. That's a great plan.
Shane: I mean-What's that?
Dean: I can't punch any holes in that plan at all.
Shane: Well, that's good because it wasn't me creating it, it was just more or less being a student and taking some notes.
Dean: That's awesome. I think when you listen back to this, you'll hear some different things and it'll amplify your thinking on it, that's all very exciting.
Shane: Perfect. This has been tremendous.
Dean: It's been enjoyable, it's been fun. They go by so fast.
Shane: I know.
Dean: Well, I appreciate it, and I loved having the conversation. Keep me posted, 'cause I really want to hear what comes of it, what's happening.
Shane: Yeah, well I'll be sure to, I mean I think your GoGo Agents, I'm not sure if that would be relevant or something along those lines-
Dean: Well here's the thing. GoGo Clients is the tool that has all of the landing pages and all of the auto responders, it's all free, voicemail, the texting, all of those tools. The difference between GoGoAgent is that it's got all of my real estate programs loaded in with it, so GoGoAgent would probably be, there's no difference in the tool functionality between GoGoClients and GoGoAgent, is I think it would be good for you to be on GoGoAgent, so you can see the getting listings program and how all of that works out for what you're doing.
Shane: Okay. Good, perfect.
Dean: Awesome Shane, thanks.
Shane: Thank you, Dean, appreciate it.
Dean: Talk to you soon, bye bye.
Dean: And there we have it, another great episode. I love it when a good plan comes together. It fits so perfectly, the residential plan that we have for our realtors for getting listings, finding people who are ... anytime you can be in a market maker position, finding people who are thinking of buying industrial condos and finding people who own industrial condos that they're thinking of selling, and being able to put yourself as the market maker in between those, and appointing yourself the curator, the purveyor of all of the information about that, educating people, adopting that category as your domain, it's awesome.
I can't wait to see what happens when Shane implements the plan. We talked about GoGoAgent.com as a opportunity for him for getting his CRM, the landing pages, auto responders, all of those tools, so if you're a real estate agent, or you are involved in commercial real estate, that would be a good place for you, you can get a 30 day free trial, come on in and take a look at what's going on there at GoGoAgent.com. All of the tools of course are available at GoGoClients.com, which is a really great tool set for you for all the things that you need to be a digital marketer, so look forward to seeing you over there.
If you want to continue the conversation here, you can go to MoreCheeseLessWhiskers.com, download a copy of the More Cheese Less Whiskers book, and click on the "Be A Guest" link and join us as a guest on the podcast and we can hatch some evil schemes for your business, so that's it for this week. Have a great week, and I will talk to you next time.