Lee Nelson is a freelance journalist from Illinois. She writes for several state REALTOR® association magazines along with LawnStarter.com and Nurse.org. She has written for Yahoo!Homes, MyMortgageInsider.com, and TheMortgageReports. Contact Lee at firstname.lastname@example.org.
Diversifying Your Business in the COVID-19 Era
Help clients and your bottom line by finding new revenue streams.
July 13, 2020
Mark Ferguson is not only the broker-owner of Blue Steel Real Estate in Greeley, Colo., he also created a successful real estate blog—investfourmore.com—that garners more than 100,000 visitors a month. Plus, he’s a home flipper, landlord, and in the midst of writing his ninth book.
But surprisingly, organization is not one of his top skills. “I’m more of a big picture guy,” he says. “Hiring others who are good at organization is the key.”
Real estate brokers have long diversified their business streams to offer more options to clients and to build their repertoire and bank accounts. Adding side gigs, ventures, and new trades to your real estate business can aid in juggling the market’s ups and downs. In today’s pandemic world, diversifying your business also can increase your exposure and hopefully help clients buy and sell homes more efficiently.
Some brokers diversify based on their passions, such as becoming a stager, aerial photographer, painter, organizer, or even a landscape designer. Others study to be appraisers, home inspectors, or title company gurus. There are those who find revenue streams in market niches, such as vacation rentals. And some practitioners share their talents by becoming coaches or real estate instructors.
Learn how Ferguson and two other broker-owners have intertwined two, three, or even more career paths together to enhance their real estate business—and glean tips for attempting it yourself.
While he was growing up, Mark Ferguson’s father was a real estate agent, yet Ferguson didn’t envision going into the business himself.
But after attaining his business degree in 2001, he started working part-time for his father and quickly realized he enjoyed real estate. He painted and mowed lawns while learning to flip houses for quite a few years before making it in sales.
Ferguson found his niche working with foreclosures and HUD homes during the mortgage crisis. He bought his first rental property in 2010 for $97,000. It needed about $2,000 worth of repairs and paint.
“It was a great deal and probably worth $130,000 at the time. I rented it for $1,050 a month. Last year, I sold it for $275,000, and then did a 1031 exchange to buy a 10,000-square-foot commercial property with the proceeds,” he explains.
Ferguson now owns 12 commercial properties and 10 single-family houses. His best investment has been a strip mall he bought in 2018 for $2.1 million. He moved his office into it and began renting out the other commercial spaces after making improvements. It’s now appraised at $3.9 million.
His blog, which he admits wasn’t written very well in the beginning, was initially focused on rental properties. “I became a better writer over time, and now I have an editor,” he adds.
Since 2013, he’s expanded the topics he covers on his website, adding YouTube videos featuring before-and-after footage of his flipped properties. When he began writing books, he took the content of the blogs and repurposed it. He wrote his more recent books from scratch. Ferguson’s latest project is a fictional book about a young man discovering real estate, though he says it’s not a biography.
The one trait Ferguson says has helped him become a successful entrepreneur through the years is his high level of motivation. “It takes time, time to learn and implement things. A lot of people give up too easy, but it takes guts to go out on your own,” he says. “You have to be willing to take criticism, too.”
Broker-owner of Locations Real Estate Group in Falmouth, Maine, Edie Fontaine was hooked on real estate from her very first class. “I soaked it all up right out of the gate, and I was a high-producing agent early on,” she says.
The market in the early 2000s was good for a while, and she successfully weathered the mortgage crisis. About 10 years ago, Fontaine realized she loves the technical and legal aspects of real estate. So, she approached the owner of a real estate school and offered to teach a class. He gave her a shot. Soon she was writing her own classes, which were approved by the state. Fontaine was also appointed in 2016 by former Gov. Paul LePage to serve on the Maine Real Estate Commission.
Then she decided to start her own company three years ago.
“I really wanted to create an environment where real estate agents could use their greatest talents and then receive support in other areas where they’re not as skilled, such as marketing or paperwork,” she says.
Fontaine and her partner, Maureen Zimerac, now have 25 agents and rank in the top 5% of all real estate companies in the state.
Since the start of the pandemic, she has been conducting live classes via Zoom. She makes $500 for a three-hour continuing education class. Many times, it’s sponsored by a local title company or lender. Fontaine truly believes that being a real estate teacher makes her a better broker.
“I take the information I am teaching so seriously, and I know it well,” she says. “I hold myself to a very high standard. I can’t fudge things because this is the material I am teaching.”
Her top tip: “It takes some imagination and gumption to diversify. You really need to be interested in the career and willing to work hard,” Fontaine says. “You give your clients an advantage if you are a teacher. You come to the table with credibility.”
He just came off of being chosen for REALTOR® Magazine’s 30 Under 30 Class of 2020, but Nik Boone wasn’t always so successful. When he first got into property management in 2010, he lost $30,000 in the first year and then made only $30,000 the second year.
But he never gave up. Boone knew that growth was the only avenue to profitability. “It is 100% a numbers game,” he says.
He started his own property management firm in January 2015 and had three new clients that first day. He’s gained 100 units every year since. Today, he manages about 650 units—everything from commercial to apartments to single-family homes—and employs 11 people.
“After you hit a point, every new door you accumulate is all profit,” he says. “But you have to keep working toward x-amount of doors, even if everything is going right and all the tenants are paying, and your systems have to be very dialed in.”
Being a property manager has helped Boone gain investor and buyer clients who want to know cash flow and cap rates. He’s able to give return on investment estimates and can offer to manage the properties when they close.
“It takes discipline and patience. It took a lot of grind and hustle before my company grew,” Boone says. “I didn’t have a clear vision in the beginning. But now, I focus on the people I hire and make sure they can take care of our clients.”