Charlotte Property Management Weekly: Do You Want Rent-To-Own With That Rental Home? CAN YOU AFFORD TO MISS OUT?

Oh, the joy of the successful up-sell! Ask a simple question many times to many customers and make a ton more money! This is what all corporations pine for:




1. McDonalds: “Do you want fries with that?”

2. Amazon: “7 more dollars and get FREE shipping!”

3. Dominos: “Order 2 pizzas at regular price and get free cheesy bread!”



Mix in a little doubt from a good salesperson and if gets even better!



1. Meineke: “Sure, you could wait to replace your brake pads for another few months, BUT IS YOUR FAMILY’S WELL-BEING WORTH TAKING THAT CHANCE?”

2. Bank of America: “Sure the market has been awful. But with your money sitting on the sidelines, COULD YOU STOMACH MISSING OUT ON THE BIGGEST STOCK MARKET JUMP IN HISTORY?”

3. John’s Learning Center: “Yes, your child is doing well in school and is up to his grade’s reading level now. BUT WITH GLOBAL COMPETITION FROM INDIAN AND CHINESE CHILDREN, SHOULDN’T YOU BE ADDING TUTORING HOURS FOR LITTLE JIMMY INSTEAD OF SCALING BACK?”



The same tactics can be utilized in the rental home space.



You can up-sell your renter with: “Is this a house you might want to buy in the future? Do you want to lock into a rent-to-own arrangement and start building equity now?”



And then add a little doubt with: “Yes, it will be tough getting a loan in the next year or two, but what about after that? DO YOU WANT TO MISS OUT ON BUILDING UP A DOWNPAYMENT AND CLOSING COSTS NOW VERSUS THROWING YOUR MONEY AWAY JUST RENTING FOR THE NEXT TWO YEARS?”



“Up-selling” and “creating doubt” are not dirty sales terms; they are the backbone of successfully providing customers with the options they need to fulfill their personal goals. Ever been happy about being up-sold (like when the waiter in Paris told you to try their delicious signature dessert?)? Or happy about someone planting a seed of doubt (“You may want to re-think buying that computer. It graded really poorly in “Consumer Reports.”)?



Let’s look at the facts:



Many people want to rent, but even more people want to own! The banks just aren’t cooperating for most people currently.



And most property owners in this economic environment, who are renting out their homes, are open to selling them; at least that is what the feedback I’ve been getting from clients. I mean who couldn’t use a little more liquidity these days?



Up-selling and casting doubt on the customer’s current situation creates value, rather than detracts from it. And when more value is created, more revenue can be earned!



YOU WOULDN’T WANT TO MISS OUT ON MAKING MORE MONEY HELPING YOUR CUSTOMERS MORE, WOULD YOU?



Brett Furniss is the President & Owner of BDF Realty (“Charlotte’s Most Innovative Property Management & Investment Company”), and Rent-To-Sell Realty (“When You Need a New Solution to Sell Your Home”) which specialize in rent-to-own (lease options) and rent-to-sell homes. His newest book, A Real Estate Agent’s Complete Guide to Representing Rent-To-Own (Lease Option) Tenants (Delight Clients, Fill Vacant Homes, and Earn $2,250* Upfront! (*Minimum!)

Charlotte Property Management Weekly: The Tipping Point is Coming- Are You Prepared for Lease Purchase?

“I understand that qualified buyers are becoming scarcer by the day. More and more houses I list are sitting vacant on the market while the owner eats the mortgage every month. Do I just tell them to wait for the market to come back or is there something I can do?” (Charlotte Realtor)

“In sociology, a tipping point or angle of repose is the event of a previously rare phenomenon becoming rapidly and dramatically more common. The phrase was coined in its sociological use by Morton Grodzins, by analogy with the fact in physics that adding a small amount of weight to a balanced object can cause it to suddenly and completely topple.” (Wikipedia definition of “tipping point”)

"The Times They Are A-Changin’” (Bob Dylan)

The tipping point is an interesting phenomenon. Malcolm Gladwell wrote a New York Times bestseller on the subject, bringing up a myriad of examples to illustrate it. In a business application, it basically says that a product’s life cycle (from conception to death) does not grow in a steady, predictable pattern; rather, it starts like a flat line of a few buyers that grows slowly to a certain point, then spikes suddenly upward (explosive growth!). This “certain point” is referred to as the tipping point. If you charted any successful product’s sales growth on a piece of paper, you wouldn’t draw a straight line going up, but rather a line that looks like a hockey stick. All companies want to enjoy the rapid sales (cha-ching!) that result on the blade of that stick.

I remember when I worked in telecommunications in the early 2000’s, almost every sales meeting touched on motivating us to sell a certain service. “It’s great”, “Clients just need to see the value in it”, “It’s all the rage in Europe”, and “Did I forget to mention how worthless you are?” were the usual exhortations we were subjected to. We just couldn’t sell it. “It’s garbage!”, “Why would clients waste their money on something they’re never going to use?”, “They can just pick up their phone if they want to communicate with someone!”, and “Let’s see you sell it!” were our explanations for our low sales numbers for this service. And what was the service we couldn’t sell? In hindsight, I can LOL. It’s probably something you use every day- text messaging.

It’s not like text messaging didn’t have business applications that we could reasonably sell our customers on using. Hospitals could send texts to their ambulance driver’s cellular phones with addresses to go to without the fear of no or poor cellular coverage affecting the response time. If you needed to get an important message to your boss while he was in a meeting, the text would get it done simply and discreetly. During 9/11, the cell towers were overwhelmed and cellular calls were futile, but texts still got through (for the few customers who actually bought this service from us!).

However, as the text messaging user base continued to slowly trickle in and grow (as we begged and pleaded each of our clients to use the service), something happened. Everyone started to ask for text messaging to be added to their orders (Asking us? Is this a joke? Did our sales manager put you up to this?) This $10 a month add-on service started to become real money as hundreds of thousands of users added it to their plans each month. This text messaging revenue lasted for years and still provides huge returns for my old company (and the wireless industry in general!). The tipping point was achieved and the profitability in that growth was beautiful for those who were able to take part in it.

So what does this have to do with lease purchases? The lease purchase tipping point is coming. People want to buy and the banks are not willing to play along. Banks are concerned with risk issues of their own (commercial real estate loan default, credit card default, upcoming bank regulation by Congress, keeping a huge cash buffer so they don’t ever have to take money from the government again, etc.). Consumers want to buy homes, but banks will continue to raise credit score requirements, down payment requirements, and reject any loan that doesn’t fit a tight cookie-cutter model so they can further eliminate their risk.

At that same time, more consumers than ever want to buy homes for the usual reasons (marriage, divorce, having kids, job changes, etc.). More vacant houses than ever will sit on the market unsold while eating away at the owner’s dwindling finances. More Realtors than ever will leave the real estate business as sales transactions dry up further. Babylon the Great (the banks) has fallen and we will all wait for the scraps of a few loans they occasionally leave us. Or will we?

Across the country, some enterprising Realtors are putting lease purchase deals together and transacting real estate. Their buyers and sellers don’t really understand how the whole “lease purchase” thing works, but they do. Every deal is a struggle of educating the other parties involved, showing the mutual benefits, ignoring naysayers who only believe in “clean” buy/sell sales, and negotiating commissions to reflect the value of what they bringing to the table. They are supplementing their income (and value!) now, but see the need for their services increasing every day during the next few years.

And at what point will these pioneers really be rewarded? At the tipping point, of course!

Brett Furniss is the President & Owner of BDF Realty, “Charlotte’s Most Innovative Property Management & Investment Company”specializing in rent-to-own (lease options) and rent-to-sell homes. You can follow his Twitter thoughts on the Charlotte real estate market by clicking on http://Twitter.com/BDFRealty. He is the author of the FREE E-Manual entitled “How to Rent-To-Sell Your Own Home” (http://www.RentToSell.com/RTS-Book.html) which details how to get the most potential buyers to your home in this challenging real estate market.

Charlotte Property Management Weekly: Sales- You Gonna Do It the Hard Way or Like Rick Pitino?

“I’m okay at sales. I send out 1,000 postcards and call all my internet leads every month. I’m just trying to figure out how to convert more of them this year.” (Pensive Charlotte Realtor)

“That’s right! You’re not your dad. He could sell a ketchup popsicle to a woman in white gloves.” (David Spade to Chris Farley in "Tommy Boy")

“Put. That coffee. Down. Coffee’s for closers only.” (Alec Baldwin in "Glengarry Glen Ross")

Man, sales can be tough. I remember coming out of college and working in sales for a telecommunications company in New York City. That was rough. My manager was from the “no excuses” school of sales. Every question I asked was interrupted with “I have an idea- sell something” or “will you please sell something, PLEASE?” The problem was that even though I was trying hard, the customers I was cold calling didn’t seem to care. Most of them, when I was able to get them on the phone, responded negatively to my request for an appointment; responses ranged from asking me to do things that were anatomically impossible to my personal favorite, “kill yourself.”

The weekly sales meetings were the worst. I was on the #2 team nationally in sales so most of the salespeople sold a lot of phones. All of the meetings were run the same way. There would be announcements and then we would go around the conference table giving our sales numbers verbally. “Schenk?” “120 units.” “Great job!” “Nichols?” “85 units.” “Way to go! I’m impressed you closed the IBM deal.” “Furniss (me)? “(cough) (mumble)” “Furniss- didn’t hear you. How many units?” “Zero.” “Zero? Wow- way to be an asset to the company! At least you’re a consistent loser!”

For those of you keeping score at home, the top 3 insults from my sales manager were:

1. How is Furniss like a rowboat? No sales.
2. I have a great idea on how to solve the nation’s drug problem. We just have to have Furniss become a drug dealer. Nobody will buy.
3. Do you know Furniss is actually Bob Hope’s long lost brother? No Hope.

I thought this experience was the norm for people who were new in a sales job. Then I read a story about the University of Louisville hiring Rick Pitino as its head basketball coach in 2001. Pitino was joining a program that was in turmoil (aka they weren’t winning a lot). Pitino knew that his success would hinge on his ability to recruit and sell great players on joining his program. In 2002, he signed a highly coveted recruit, Francisco Garcia (now with the NBA’s Sacramento Kings). However, Pitino didn’t even sell him on Louisville. He came on his own accord even as he was heavily recruited and offered multiple scholarships by major college basketball programs across the country. How did this happen?

It happened largely by accident. Pitino used to be an assistant coach with the New York Knicks in the early eighties. There was a young ball boy that Pitino would talk to from time to time. It turned out that this ball boy wound up as friends with this high school star from the Bronx (approximately 12 years later after both had left the Knicks for several years) and told Garcia that he would be very comfortable with Pitino as his collegiate coach. That was all it took. Garcia was convinced; he willing to sign with Louisville without even meeting Pitino!

As I was cold calling and taking abuse, Rick Pitino was cracking jokes with a ball boy. Who had better results? Coach Pitino. Caring about others trumps sales pitches. Referrals trump cold calls. Relationships trump all. People like to do business with people they like. And a “friend of a friend” is much better than a stranger on the phone.

Sales can be easy. Treat people well and reap the rewards!

Brett Furniss is the President & Owner of BDF Realty, “Charlotte’s Most Innovative Property Management & Investment Company”specializing in rent-to-own (lease options) and rent-to-sell homes. You can follow his Twitter thoughts on the Charlotte real estate market by clicking on http://Twitter.com/BDFRealty. He is the author of the FREE E-Manual entitled “How to Rent-To-Sell Your Own Home” (http://www.RentToSell.com/RTS-Book.html) which details how to get the most potential buyers to your home in this challenging real estate market.