Geographical Farming for Real Estate with Kenny Klaus

Suzanne Doyle Ingram interviews Kenny Klaus on how he used geographical farming to grow his real estate team. Farming is a great way for new agents to grow their real estate business. Farming focuses your attention to a specific are to become the expert. Farms can be specific neighborhoods, buildings, gated communities, new construction areas, or even an entire zipcode if the size is right. Learn how Kenny used newsletters, events, and sponsorships to grow his business and how you can use farming as a real estate agent. We’ve transcribed the best parts of the video below as well for quick reading!

Transcript Highlights

I appreciate the opportunity to share and continue to try to help raise the professionalism in our industry, it truly adds value to our industry, and that’s what protects us from from being taken out of it by the internet or other things, is that big value-add that we give back to our clients and our communities.

Yes, so tell me when did you get started in real estate and why did you start in real estate?

I’m in my seventeenth year now which when I hear you say long time for me it’s still seem somewhat new to me to think 17 years later it flew by. I was the FedEx guy for 13 years and really enjoyed that, learned a lot of corporate structure, learned a lot of systems in that. But in my twenty’s I was just going, well I know if I do this I’ll make this, and if I do this then you know no matter how hard I work you know there’s a a ceiling on what I could do. Going up the corporate ladder really in some cases made you less because now you’re not on overtime. Doing that for you know the rest of my life just didn’t sound as appealing, so I tried a couple things and then I had someone show me a commission check for $5,400 they earned and I went holy cow I had never seen anything like that, you know my checks were $400 or $500.

I started to think, you could really be good at that, so that’s how the journey started. I started going to school and I actually did get into real estate part-time for four years and I say part time I was really probably full time but still working at FedEx part-time. Then went really part time just to keep the benefits, so it was a transition. I mean I was scared of course, commissions and family and all those things, health benefits and all that, but I was just relentless. You know our goal was to be debt-free before I left for real estate, and have ten thousand in the bank and we got to about thirty thousand and no debt and that’s when I decided, I can take this risk. But it was it was a calculated risk but I already started at that point geographic farming in a neighborhood and started to see a return so I was already doing pretty well transactionally, it just you know it took me awhile to make that transition.

That’s fantastic, the geographic farming we’re going to talk about in a little bit so hold on to your hat everybody. Kenny is a teacher of a geographic farming, but you know one thing is that I think it’s really important for people who are interested in real estate, you have to have some money aside. Because you’re going to be pounding the pavement and working really hard and not seeing the results right away because you don’t get paid until you close a deal.

My real estate business you know if you look at it, isn’t real estate jobs and that’s fine. You can have a job but you know, we really teach how to be a business owner, and being a business owner requires more than just good sales techniques on how to run a business. Mine was I just wanted to have a foundation, I want to have something predictable and repeatable and in an industry that typically doesn’t do that right when you wake up everyday unemployed. You know January comes and you start over and go okay what’s the marketing gimmick this year you know, is it texts, is it social media, is it you know what’s the thing where I go spend thousands of dollars and and get very little return and then chase the next one. Where I want to have a more of a predictable income annually and we’ve been able to create that consistency. That’s one of the things we’re proud of and all the awards and crap, who cares, at the end of the day for us it was the quality of life. The quality of life for my team as we grew, really to have a vision of how do we help other people be successful within the industry.

Now I really want to get into this concept of geographic farm because I know you’re an expert in that. You’re actually invited to speak all over the country on what geographic farming is and teaching others how to do it, which I think is so nice and really generous of you.

I’ll make it pretty simple visually for people. Most all of you know I’ve been the FedEx guy and you know my vision came from it as I had 13 years there. There were two choices when you were out driving one of the trucks, you were either a route driver and you had your own area, or you were called a swing driver and you are taking over if somebody was sick or vacation or overloaded or whatever, you had to go run that route. So we need to go run that route, but you know you didn’t know it like the regular driver did. So you didn’t know if they delivered to the front door or the back door, who signs for the package, when do they normally like their pickup, do you bring supplies, and all the customer service things that someone who goes there every day knows all that stuff, and it’s like on autopilot for them.

You’re the same company, but like the oddball cuz you don’t do it the same way, you don’t solve their problem the same way, and so that was kind of my vision when geographic farming started. I just need to get an area and then just run what I will call her Realtor route, and I just need to run that route and get to know everybody, the business, the houses, you know shopping, hospitals, whatever is going on in the area. School, sports, etc. I started with 1,700 homes and just dominate that area. That doesn’t mean you can’t work leads outside of it, it just means all day everyday you’re not working buyer leads all over the place.

Preview properties in that area, set up a network meeting in that area, get to know that community and of course it helps to live in it or near it. I just started with a newsletter every month. I started with got one listing with that but then I went 7 months without any listings or calls. That’s the gap where the majority stop and fail or quit. I set aside $12,000, so $1,000 a month and said we’re going to invest for 12 months regardless. Then I’m going to put the activities on top of it. When I teach you end up having that conversation about that ugly four-letter word, work, but you know you have to work you have to go out and know the market, know your properties, know your business owners, because they’re interacting with your future clients.

Geographic farming means I just get to know my community so well, I know all the builders, all the models of homes, everything that’s happened in the area. You know we’re pretty spread out and we’re a big city and it’s very different from one area to another as far as what sells what doesn’t sell. So knowing your hyper local market and interestingly enough, if you look at NAR stats when they poll the consumer and what they’re looking for 98% honestly say they want someone local, you know with local market knowledge.

We realized that geographic farming really was just a big database, you know if somebody moved into my farm and another agent sold him the house, they may if they were lucky, get a Christmas card from that agent, maybe a crappy email newsletter that they don’t look at anyway. With me they get at least 12 pieces of mail a year, but also the open houses, the sponsorships, the Facebook ad, the three wrapped vehicles, the moving truck, like they’re seeing us and it’s because we’re hyperlocal in that sense, we’re not spread out all over.

The biggest difference that I feel that I want to share with people, is most real estate professionals get to the end of their career and that’s it, there’s no residual income, there’s nothing to sell, there’s nothing. So we now have a business that we could sell some day or continue to hire people to run it, like I’m not production anymore but people to run it still make a nice income but it doesn’t die with me quitting the industry.

Really good point. Having a business that you can sell, that’s so true I think probably 99% of the Realtors and real estate agents in the United States just work and work and work, and then the day they stop that’s when the money stops coming in.

So how do you have your farm set up, your geographical areas?

Well so we had the same farm for years and it’s based on the ZIP code so like 85209.com, so in 2003 I have to go buy 105 ZIP codes in the valley, I didn’t know what I was doing but I’m glad I did now but so I came up with 85209.com. What we try to do is come across as a community newsletter, in a community piece with real estate in it versus a marketing piece that looks like marketing. Their zip code is super easy to remember and we’re actually getting ready to launch a community app based on that, so they can get their home value request, things that are happening the community all just right there. The idea was if they go to their zip that doesn’t feel like a sale pitch, it feels like I know my zip code.

So what we created was really a path within our organization so that, you know most teams have a listing agent a buyer agent, well we have this opportunity for them to be awarded a farm and be on our team. You have successful buyer agent and they own their own farm ultimately. So they know while they’re still working within the organization they want to take a buyer leads until their farm gets big enough to sustain on its own. They are invested well and we’re doing it 50-50 with the agents, so they’re investing, their learning how to be business owners, that we have to make decisions if we’re going to sponsor things and you’re responsible for half the postage and half the print and so I can help them learn. Because they have their farms and have leftover newsletters every month, they can doorknock and say I want to make sure you got a copy of this month’s newsletter, do you have any questions? At least you’re bringing them something of value. Of course everyone wears shirts that have our logo and it looks professional, here’s the newsletter doesn’t look spammy and so far that’s been going really well.

Sometimes when you are really successful and you maybe think she’s too busy for me, never met the person in person, I think they be pretty impressed she showed up at the doorstep one day, and I think that’s really important because it’s perception.

When they see the just sold in the newsletter and then they see a moving truck and then all the sudden they see another just listed, then it just sold, then go to the grocery store there you are in the ad dividers, then they go to the high school game and you’re being announced and there’s a banner on the fence, and you know you’re in the program and all the cities like she’s these guys are freaking everywhere. Gary Keller says you know if he’d started over today he would start by picking a neighborhood and geographic farming, like that’s because it’s stood the test of time and you know but Facebook! Right, you can create a Facebook group for your farm, you can create a Twitter account, you can create an Instagram account, you can you can still do all those things. If you call expireds and it’s in an area that your brand’s there every month over month over month is that an easier call to make?

You know when Gary came out with the One Thing book, you know I read it and we were like holy cow, like I didn’t realize that’s been my One Thing all these years in business. That was the one thing that never changed even when our market got decimated, we still sent out a newsletter. Then we start teaching classes, cuz by the way, once you build an audience you know we had “Avoid Foreclosure: Know Your Options” in 2007, 8, 9, 10, and now our classes “Road Back Home” how to get on the road back home. Now you have this trusted audience to put something in your newsletter and say come out to our little free workshop and you know learn how to get on the road back home and for coming out you get $50 off your home inspections. It’s a lot easier cuz you already have the piece so the newsletter never changes all that changes is the content.