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Wild idea for Realtors: Allocate $10,000 to build a Premium Online Asset (doesn't have to be real estate)

Successful Realtors / Brokers tend to lean towards building an offline cash flow portfolio — rental homes, residential flipping or even dabble in commercial real estate.

Wild idea: how about allocating two closings worth of cash for an online asset?

Real estate investing will always be my first love. I grew up watching my father buying, renovating, leasing and flipping 25-20 homes; I’ve owned a couple of my own the past 5 years.

But lately I’ve diversified to online assets. I couldn’t resist the 15-20% per year return on my investment.  For most online business models, maintenance is minimal after a year,  costs are manageable through efficient small business outsourcing and imagination, creativity is put into best use.

Mind you, it took me a full 3 years before I put serious money into it.  In those 3 years my sole purpose was to incrementally improve my knowledge.  When I started earning cash flow (however small) then I aggressively re-invested my profits back to the business.

Here are some things I’ve learned:  4 ways to make money from a website

1) Leads (ex: niche real estate sites.)

2) Adwords / Adsense (people clicking on your site’s ads. Need a LOT of traffic. Like EHow.)

3) Sponsored ads (would be helpful if you had a good ground game — sales guy, good relationship with people in vertical businesses and most importantly, good branded site that attract good traffic and loyal followers. Ex: Copyblogger)

4) Affiliate (selling  someone else’s product.  Make sure you get the best product to sell.  Tough market to crack but can be very lucrative after you gain credibility and strong following.  Ex: BBgeeks.com, affiliate for blackberry phones)

Some thoughts

  • Start with something you love and have  adequate experience in, be it pink gems, creating an Expat site for Americans in South Africa or creating the best exotic Asian cuisine site.  There’s so much stuff to do to build a great site, so make sure you like the topic.  And know it’ll take at least 1 year to really earn money, usually more.  It’s a marathon.
  • I’m all for action over too much analysis. But if you are really serious about an idea.  Create a solid simple plan backed with solid knowledge of online marketing (SEO, PPC) — start reading the top SEOs, Affiliate, PPC (pay per click) guys out there. If you go with the brand route (Yelp, Yahoo!, HomeAway) make sure you know what you’re getting into.  It’s extremely hard to create a solid brand from scratch.
  • If you got no time but have capital. Learn the business model and a clear understanding of what you want to do.  Outsource day to day management of site (link building, content creation, coding).  But keep a close eye on your baby.
  • Have an “exit mechanism” to face the brutal fact that the idea, however exciting and fun, is unprofitable. Move on to the next one, you’ll have a higher chance of success, I promise you.

There’s so much great ideas out there, but the real money is made in the execution of the idea. Follow through.  Incremental improvement.  And your $10,000 investment can earn you about $1,000 – $3,000 a month after 3-5 years.

About Joe Salcedo

Joe is fascinated with business models more than super models. The last two years he has been focused with his LakeTahoeRealEstate.org site and stalking the Reno Real Estate market since 2007. He works hard for his beautiful wife Anna, and two wonderful kids, Alonzo and Jiana. Add him on his Twitter account

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  • So I assume you think agents/brokers can build a premium online destination for 10k? You are right of course. 10k can buy a great website. Not a Zillow or Redfin type website, but a great real estate site with all the functionality that 90% of buyers/sellers need.

    I’d love people to leave links to their websites in the comments and list exactly how much they spent to get them built.

  • Alright I’ll bite. http://www.TheParkCityLifestyle.com

    Money Invested: around $100….
    Time Invested: Waaayyyy to much time teaching myself basic SEO, WP, and PPC. Starting to finally pay off though. Don’t think I’ll ever go the route of making money off of traffic though. 

  • Joe Salcedo

    Ben,

    I checked your site. Not bad at all.  And you mentioned that you learned PPC as well.  That’s a good move.  That, in itself, will create revenue to add to the improvement of the site.

    Point is, money is not the big problem IMO.  It’s always the effort and daily focus that you put in a site.  Esp. in early stages.

    -Joe Salcedo

  • Joe Salcedo

    Yep, not as sophisticated as Zillow,Red Fin,etc., those sites need programming genius which is not exactly affordable nowadays.  http://bits.blogs.nytimes.com/2011/05/18/are-talent-acquisitions-a-sign-of-a-new-bubble/

    That would be good, post site and costs…mine is about $$7,000 (without my labor costs). http://RenoHomeBlog.com

  • Washington DC Real Estate @ http://msqrealty.com

    Total invested: $0 (built  in-house) / Total Advertising $0 (campaigns start late June 2011)Launched: February, 2011
    May 2011 Traffic: 6,000 unique visitors / 29,938 pageviews
    Average time on site: 9 minutes, 32 seconds
    Confirmed, Valid Online Leads generated to-date: 89
    Total closings from online leads to-date: Aprrox $7M

    Development time: Continuous.

    • So may I ask how you have gotten ridiculous numbers from a site you do no advertising for and just launched? That is fantastic by the way. I’ve looked at Nufan Tech recently. Site looks amazing. 

      • Ben,

         

        I’d love
        to say that it’s our genius, but had a few things working in our favor for this
        one…

         

        1. Aged
        domain name.  New site, very old (by net standards) domain name.

        2. Own
        social media in your market  – Your
        social media activity plays a big role in your rankings.

        3. Get PR
        & Write-ups – Lots of press releases, lots of incoming links (it takes a
        while to catch up.  Google only shows 4 incoming links thus far, some
        sources show up to 38).

        4. Be in
        a great market – DC is the #1 real estate market in the country (WSJ Article Today).  Lots of
        people want to live here and it’s very expensive.  Studio = $300k / 1br –
        $350-400k / 2br – $500-750k

        6. Little
        competition.  Do a Google Search; most of the DC real estate sites are
        terrible.  Just a matter of time for a page 1 ranking.

         

        But most
        of all, it’s out business model. 

         

        Ten years
        ago as a poor law school student I started a small real estate team in Chicago.
         I went to your broker, Rubloff at the time and they wouldn’t hire me.
         Told me nobody would use the internet to buy a home.  Jack Kenney
        was the broker and the company was independent, not part of Prudential.
         Within a year we closed $48M in Chicago sales selling only residential
        lofts.  Within 2 years we had gone from a small team at Keller Williams,
        to a “company within a company” at Re/max, boasting the #1 sales of
        any real estate team in Chicago.  90% of our business was generated
        online.  Year three, the technology was sold to a conglomerate; the brand
        was sold to a local Chicago outfit.  Still in business, still boasting a
        page 1 Google rank today, I might add, but it’s turned into a god-awful site.

        Wish I
        didn’t sell.  There was another startup
        at the time in Chicago called @properties. 
        Only other broker in Chicago who understood the internet.  Thad and Mike have done ok for themselves, sales last
        year put them at #3 Nationally.

         

        Because
        we did one thing: lofts, and we had one thing: loft buyers, developers took
        notice.  Before long we were representing large developments such as
        Bronzeville Lofts (gosh, only one I can remember, but there were more!)
         HGTV used to have a loft show and linked to us as their preferred Chicago
        broker.  We started getting
        attention.  We were doing one thing,
        doing it well, and doing it consistently.

         

        Folks,
        this was 2001.  When we launched, there was no IDX or RETS, so we created
        our own system that used flat file, web-accessible databases of listing
        inventory via MLS exports.  What we had, was the only site in Chicago that
        allowed you to search the entire MLS.  And what I believe to be the first
        such website, ever.

         

        Agents
        were more than annoyed.  Back then, the thought of a client being able to
        go online and lookup real estate listings without the assistance of an agent created
        fear and panic within the industry.  They just didn’t get it, and perhaps
        still don’t.

         

        So we got
        dragged in front of the regulatory authority at the time, The Office of Banks
        and Real Estate.  We argued that creating an account on our website and
        searching for properties was no different than walking into our office and
        asking us about available listings.  The OBRE agreed and we were allowed
        to continue.  In the back of my mind, I’ve always wondered if this case
        was ever referenced later when IDX/RETS were actually created.

         

        Today, all
        anyone seems to care about is listings on their site.  “You have to have IDX or nobody will use your
        site.”  I hear this all the time.  While it’s true that nobody will use your
        site without IDX, having IDX does not automatically ensure your success.

         

        Here, Take This Test:
        Pick a city that you know nothing about.  Do a Google Search, “City Name Real Estate For Sale.” 
        Skip down in the results past Trulia, Zillow, Realtor.com and the
        dominate newspaper for the market. 

         

        Start
        clicking on local real estate links.  Be
        sure to open them in a new window, we won’t be staying long. 

         

        Put
        yourself in the mind frame of a relocating buyer, accepting a new job, who
        knows nothing about the area.  Try to do
        some research.  What are the
        neighborhoods?  What are their offerings,
        lifestyles, amenities?

         

        Do a
        search.  Can I explore by map?  Does it just give me a list of zip
        codes?  City Names?  I know the city, I want to learn about the
        neighborhoods!

         

        Time to
        move on to the next result, you have a 70% chance of never finding the
        information you are seeking.

         

        Agents
        need stop thinking about creating a “website” and start planning their online business.  You might not know it, but you’re running a
        dot com.  More people will visit your
        website than ever step foot in your office. Shouldn’t your online presence be
        able to satisfy all of their needs?  Not
        just provide them with a pedestrian search interface and a blog that reminds
        them when it’s time to change their air filter?

        • I can’t believe no one is dominating the DC market yet. I’ve been
          wondering why a big time blogger hasn’t emerged from that market for
          the last 4 years..but maybe that person is you now 🙂

          • I have no idea why my post formatted that way.  It was painful enough to read it when it was proper.

            Actually Drew, our blog isn’t that good, but we’re getting there.  We’re just too small.  It’s a balancing act now of growing the site and content, while growing the actual brick-and-mortar business.  There’s just so much development to do and it’s hard to find quality, INEXPERIENCED agents. 

            Outside of the public site, there is a wordpress corporate intranet at msqrealty.net which really is a 100% virtual office.  Everything is integrated under one roof: Centralized showing service; MLS Access; Google Apps apis (email, calendar, docs); Docusign APIS; Virtual Voicemail; Process closings/sales; Process marketing orders; etc.  “Status Wall” like Facebook for agent updates, etc.  There is no need for an agent to come to the office to do anything.

            In time, the savvy agents who are giving up 30% so Banker appears in their brokerage name, will learn about real, solid marketing and technology offerings that are provided broker-down and developed with the sole purpose of bridging the technology/marketing-gap which remains dominant in this industry.

            I think this is evident when you look at the brokerage models that are now dominating their markets.  Companies such as Intero,  At Properties, Peddle to Properties, Good Life, etc.  It’s great to see quality independent companies running out the old dinosaurs who’s business model was, “If you have a pulse and a license, we have desk and a phone.”

          • Wish there was someone like you out in this area. Just my type of thing! Great work.

          • There is, it’s called Virtual Results.  If you’re serious about creating a viable web presence, that you own, control and can grow and build, there is no better choice on the market.  

            Spend $700 bucks on a quality site from VR. 

            Do some research in your market for local blogs.  Check their scores out at alexa.com.  Most blogs charge around $200-400/mo for a banner.  Get some great banners designed qucik and cheap @ .  Strike up a deal with the blogs, you’ll advertise and sign a 6-mo contract as long as they agree to write an interview with you or spotlight your specific niche offerings.

            Create Craigslist ads and dominate your market.  Go to http://washingtondc.craigslist.org Do a search for Real Estate for Sale, type in any DC neighborhood (Georgetown, Petworth, Shaw, Dupont Circle, etc.).  Guarantee there’s a page 1 ad with properties deep-linked to our site.

            Write a blog post everyday.  If you can’t, signup for Bring the Blog.  Note, they are only going to give you real estate posts (boring, but useful).  This combined with 1-3 weekly, hyper-local neighborhood posts will do wonders for your traffic.

            Syndicate your content.  Make sure your using Tumblr, Delicious, and various micro-blogs for content syndication.  

            Don’t spam social media.  Nobody cares about your listings.  Interact, ask questions, answer questions.  Don’t pontificate.

            Create your own RSS feeds if you have time, http://rss.msqrealty.com and tell the world about them.  

            But most of all, really review your analytics.  Look at how visitors are using your site and discover ways to make it better.  Watch visitation paths, and content usage.  There’s always a tweak you can do to increase your conversions, and your site is never ‘done.’  It’s an organic, living being that grows over time.  It’s not static.

            Everything we’ve done with our site can be accomplished with a VR site.  As your business grows you will discover new ways to grow your site.  Not starting with a solid foundation will make this an impossible feat.And don’t forget about retirement.  Building something that you own, control, which isn’t leased or contracted adds equitable value to your business and brand.  Yes, you can sell turnkey lead generating machines.Anybody want to buy a Baltimore Rental site that generates in excess of $8k per month profit, one agent?  Please make offer http://therentalqueen.com

          • Still waiting to be able to work with VR. the MLS solution isn’t in my area so I had to build my own site for now. Thanks for the tips as well! 

        • Meat-y post, Man.  A lot of bite size profitable ideas like:

          1.) Aged domain name

          2) Own social media in your market  (not a new concept but the way you see Social to assist your SEO and website presence is huge.)

          3)  But most of all, it’s our business model.   TRUE.  SAME THING IN MY EXPERIENCE.  YOU HAVE TO REVOLVE AROUND IT NOT JUST AS A ADD ON.

          4)  Put yourself in the mind frame of a relocating buyer, accepting a new
          job, who knows nothing about the area.  Try to do some research.  What
          are the neighborhoods?  What are their offerings,
          lifestyles, amenities?

          5) We were doing one thing, doing it well, and doing it consistently.

          6)  Today, all anyone seems to care about is listings on their site. 
          “You have to have IDX or nobody will use your site.”  I hear this all
          the time.  While it’s true that nobody will use your site without IDX,
          having IDX does not automatically ensure your success.
           

    • M2,

      Those are fine achievements for a newbie site. Good work.

       

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