Podcast

Episode 54 - GRIT - The Real Estate Growth Mindset with Michael Hellickson

Brian Charlesworth
January 26, 2021

Michael Hellickson has been selling real estate since 1991. At the height of his sales career, he and his team ranked as the #1 team in the country.  Today, Michael is the CEO of Club Wealth®, an executive business consulting firm that offers coaching and training to business owners worldwide - and is the #1 coaching company in the team and brokerage space.


Michael believes that while most people relate success to monetary wealth, there is no success in the world that can compensate for failure in the home. There are options that can provide opportunities to make more money in less time.  In fact, despite spending just 12 days a month working in his business, he and his team still ranked first, nationwide.  Which is why he wants to share the top three things that agents need to focus on not only to double their income but spend less time working in the business as well.


In this episode, we talked about:


(04:59) What’s the #1 habit you need to implement and master at a high level?

(05:24) What’s so great about SISU?

(07:35) Why you need to diversify your lead flow

(08:35) Why do the number of leads from SOI and repeat referral keep dropping in recent years?

(09:41) How many lead sources should you have to make 6 to 7 figures net income?

(13:46) Why having a 100% referral-based business is a terrible idea

(16:03) Where to get cheaper leads that converts quickly

(17:05) What’s the one thing that real estate agents suck at worse than lead generation?

(21:46) When does following the lead of a drug dealer pay off?

(22:26) What script to use to get leads hooked on you

(23:35) How to get a copy of  Michael’s 31 best lead sources

(24:30) The single best thing to do to generate more referral-based business

(25:00) How not to get overwhelmed by multiple lead sources



Episode Transcript:




Brian Charlesworth  0:36  

Everybody's here to see Michael, the CEO of Club Wealth and the things you're going to share with us today, Michael, I know you were going to talk about the three things that top agents will focus on to double their income.


Michael Hellickson  0:49  

Absolutely


Brian Charlesworth  0:50  

Every time I talk to you, I just am taking notes. So I'm gonna let you kick this off, Michael, maybe for those who maybe don't know, maybe just give us a little bit about your background, who you are, and then we'll get started.


Michael Hellickson  1:02  

Absolutely, you bet. And Brian, let me Let's time we chat late, remind me to talk with you about let's let me host your next event on our platform, we'll do it for free for you. In terms of my background, I sold real estate for just over 30 years, and was actually one point in time, the number one agent or we say number one agent, we were the number one team in the country, right, so you don't get there alone. And so a 16 agents, we were consistently closing 120 to 180 transactions a month with 750 listings and active and pending status and then given time, and so we're very, very profitably, we need about 38% profitability. But what's best about that is I was only working 12 days a month. And so that was super nice, had a great lifestyle, our core value now at Club Wealth, which is where I'm at now I'm a coach with a company called club wealth, which is actually the number one coaching company in the team and brokerage space is so now our core value is that no success in the world can compensate for failure in the home. So that's kind of as we move forward, you know, we take our typical client, you know, comes to us, they're doing, you know, 15-20 transactions a year, and we'll take them to 200, 400, 600 transactions a year and you know, somewhere between two and five years, and that's often well beyond that, but the reason I bring that up is in the real estate business right now, the biggest challenge I think a lot of people face is their mindset towards the business, right? People think, well, I'm gonna keep it small, keep it all or it's gonna, you know, it's gonna be just me and it's, I'm an entrepreneur, and, and all that sounds great. But really, what you're doing is you're trading time for dollars, if you ever want to get to a point where you can actually trade ideas for dollars, and you can leverage your time, you're gonna have to build a team or be on a team. And both are great options, you know, both can provide you with the opportunity to make a lot more money with a lot less headache, and in a lot less time. And more consistently. We know team members, not just team leaders, but team members who are making consistently 250 to $400,000 a year, and they're not having to work 24 seven. So


Brian Charlesworth  3:04  

You're talking about something that I think hits with everybody, because real estate agents real estate team owners typically work longer hours than anybody I know. I know. So anyway, I think I'd love to dive in and hear what are the top three things that you need to focus on to double your income. And it sounds like you're saying not only double your income, but spend less time actually working in the business


Michael Hellickson  3:30  

100%. And I'll tell you that, you know, part of the challenge is you've got to get through what we call tier two and tier three. So tier one, we break agents production up into tiers, right, tier one is zero to 25 units, 25 to 75 is tier 275 to 150 is tier 350 to 250 is tier four goes all the way up to tier seven, which is 1000 units per year and more. The reason I'm bringing this up is because that tier two and tier three range is kind of what we call Death Valley, right? That's where agents go to die, you got to get through that period of time, as quickly as possible so that you can get into tier four and actually develop that balance in your life. And the three habits that we're going to talk about, those are the things that are going to get you there. And it's funny because all everybody wants to talk about the new shiny object and the new latest greatest this that the other and I'll how you know what they think is important, but here's the reality. It doesn't matter what business you run, it doesn't matter if you're running a real estate business, or a coaching business or technology company. There are three things that you have to do at a high level three habits that you have to absolutely master if you're going to be highly productive and have a life. And though I'll start with number one the first and by the way, let's back up. Let me start with what it's not. What it's not is I've got to have the best product in the world right now. Don't get me wrong, you've got to have a great product you've got to deliver great service but the reality is, you can have the best product or service out there. And if no one knows about it, you are going to go out of business right So the number one habit that you've got to implement and master at a high level is lead generation, you've got to get great at lead generation. Now, in our, in our businesses in the real estate industry, we see people talk all the time about, you know, how many hours do I prospect? And how many calls do I make? All those are great. And one of the things I love about Sisu if and by the way, this is not a pitch for Sisu, but I will say this. What's great about Sisu, one of the many things that's great about Sisu was its ability to track your numbers at a high level and identify where the problems in your business are. Right? If you look at the numbers, and you compare your numbers to other people, you'll be able to easily see where am I struggling. And unfortunately, most people when they're, and by the way, I'm not the guy that's gonna tell you, you've got to just lay it on cold calls and expireds and fizz bows and all that kind of stuff. Heck, I didn't do any of that stuff. The last 15 years I sold real estate, or we were the number one team in the country. That being said, you do need to call people you do need to you know, it's a voice, voice face to face business, you've got to connect with people. And unfortunately, too many people put too much emphasis on the number of calls made, the number of calls made doesn't matter. What matters is, how many appointments do you set. So when we talk about lead generation, I got to get that lead to come in, then I've got to find a way to follow up with it and convert it to an actual transaction or an actual client. So in terms of this one,


Brian Charlesworth  6:20  

Michael, I just want to ask you a question. So it seems like I totally agree, it seems like fewer and fewer people are sitting there calling expireds all day. And they've figured out other ways to generate these leads.


Michael Hellickson  6:35  

And that's true. And there's lots of ways, there's actually over 2000 lead sources in real estate today. Now, part of the challenge that we have in the industry is that too often we just abdicate our responsibility for lead generation and we want to just pay for enter realtor.com and Zillow, right? That's why they exist, because they figured out that agents as an industry, real estate agents suck at lead generation, right? And so they say, Well, why don't we just do the lead generation for them? We're pretty good at that. And then we'll just sell them the leads. And oh, my gosh, real estate agents figured out, hey, I can write a check and get business, how often can I do that? Right. And so all of a sudden, we got caught in this trap of we've got to buy all these leads. Well, there's tons of lead source. In fact, with Brian, with your permission, when we get done today, I'll share I've got 17 of my best 109 lead sources that we share with our clients I can share with everybody here in a moment. Yeah, but I'll just I'll what I'll do is I'll give you guys a way you can just download it for free. But before we get into that understand this, you've got to diversify your lead flow. It's not enough to just call FSBOs, expireds. cold calls, it's definitely not enough just to business by referral. I'll give you an example. Six, just over six years ago, 61% of the average agents business came from sphere of influence, repeat and referral clients write that number down 61%. Just over six years ago, the average agents business came from repeat referral clients, that number in four years dropped to 41%. Now that's a substantial drop. All right now you got to think about that. A ton of that business went away for the average agent. What's even scarier is the last number we have. So we The following year, we don't have the exact number. But we've heard that it's in the 30% range somewhere in the 30s that the average agent is getting most of their business from repeat referrals sphere of influence.


Brian Charlesworth  8:22  

Why is that?


Michael Hellickson  8:24  

That is the right question. That's exactly the right question. And the reason why that is is right, these statistics down these are some these are national association realtors statistics, by the way, so this is I'm not making this up. And this is coming from now. 92% of all buyers start their search online 92% of those 72% work with the first agent they come in contact with that doesn't drop the ball on follow up. Now think about that for just a second 92% start their search online 72% of those work with the first agent they come in contact with. That means the vast majority of agents are finding or semi of clients buyers are finding their agent online. This is a very big deal. Now, does that mean you shouldn't still be going after repeat referral business? No, of course not. You definitely want to go after that business as well. But it's just one pillar of your business and you need to have many In fact, I would suggest this if you want to consistently through all markets GOOD BAD buyer, market, seller market, Oreo market, whatever. If you want to consistently make a net six-figure income and I don't care about gross, right, gross. Everybody likes to say oh my gosh, I made $150,000 last year, what would you spend on leads? Oh 75. Okay, well, you didn't make 150, right? So I want you to make at least if you want to make six figures, net income, you're gonna have to have 10 to 15 lead sources if you want that to be consistent over all time. If you want to make seven figures, you're going to need to have 25 to 35 lead sources. And if you'll do that and diversify, we're not looking for The one lead source that brings us 100 leads a month, I'd rather have 10 lead sources that bring me 10 leads a month or even better yet, I'd rather have 20 that bring me five leads a month, I want to have that spread out as far as I can. So that one lead source, you know, that gets worse doesn't affect my business. And that happens.


Brian Charlesworth  10:17  

I have a question for you talked about this 72% work with the first agent they come in contact with. What do you mean by that? Is that the first agent that they speak with? Or is the first agent that gets in front of them face to face that they speak with?


Michael Hellickson  10:31  

Yeah, okay. Yeah. And that's, again, that doesn't drop the ball on follow up. Okay. That's, that is number two, right. So habit number one is lead generation that and by the way, if you're doing fewer than 25 transactions a year and I don't care what markets you're in, it doesn't matter if you're in San Diego, Seattle, or Podunk middle of nowhere. If you're not doing over 25 transactions a year, you need to understand that you've got to get your lead sources dialed in first. All right. And I would recommend that you should spend 80 to 90% of your time on these three habits, right, not having a more than being lead generation. And frankly, you should spend four to eight hours a day on some kind of lead generation. Now I say that people are freaking out what he wants me to lead generate eight hours a day. That doesn't mean prospecting, okay? It just means somehow someway, you've got to start generating leads. And you've got to transition from chasing leads, which a lot of newer agents do right? Now. That's when you're making those phone calls and that sort of thing. But you got to transition from that to attracting leads. And that's one of the reasons why we want to get all these different lead sources in place so that instead of just chasing that business all the time, you've got business coming to you naturally. Alright.


Brian Charlesworth  11:42  

So I got a quick question here. We've got a question here about 15 separate lead sources, does that mean that online leads get sorted into multiple sources?


Michael Hellickson  11:51  

Absolutely. So if I've got Pay Per Click leads, that's a source. If I've got Facebook leads, that's a different source. If I'm buying realtor.com leads, that's a different source. You know, all of these are separate sources. And yes, you want to sort them into different sources. One nice things about Sisu is you track which source they come from and figure out what your ROI is on each lead source. And you can figure out what your cash conversion cycle is on each lead source, right? So I can tell how long does it take from the time I get a lead from this source to turn it into cash versus how long does it take from this other source. And what you'll find is, by enlarge, the sources that cost you more money, generally have a shorter cash conversion cycle. And the sources that cost you less money generally have a longer cash conversion cycle. Now, that's not always the case. But it's generally the case. Now, that doesn't mean that you only want short cash conversion cycle leads, right? I also am going to need business 12 months from now, 15 months from now, 24 months from now I need to build a pipeline that's feeding me both today and down the road. And I want to slowly start to transition like as an example, we'll use realtor.com and Zillow, typically very expensive leads in most markets, right? The good news is they tend to close a little bit faster, so you get some money rolling in a little faster. The downside is the ROI or how much money you make as a percentage of gross or the net income that you make on us tends to be smaller than it would be on a Facebook lead or pay per click lead or a sign call or any other number of sources that don't cost as much as those sources do. So. Okay, so we need to balance of both right in the beginning, I need to get some cash rolling in. But I want to transition into stuff that makes me more money long term.


Brian Charlesworth  13:29  

So I think we have a question Michael, about just with so many agents just focusing on all referral-based businesses. In fact, the speaker we had before this journey was all about 100% referral-based business. So with that being the case, how do we balance that? I mean, there are people building businesses that are 100% referral-based businesses. So tell us more about the balance there and how we just need to stay on top of our business.


Michael Hellickson  14:06  

That's a terrible idea. And I'll tell you why. And by the way, I love referrals. It's fantastic to get more referrals. In fact, when I was selling real estate, I was doing just over 190 transactions a year by referral. Right. So I'm a huge believer in developing and cultivating and getting more referral-based business. That said, having 100% of your business coming from any one source is a disaster. That is a that's just a disaster and a nightmare waiting to happen. Because it's only a matter of time before things change. I'll give you an example a very popular coach and I won't mention his name. But a very popular coach who I actually coached with years and years ago and learned a lot about the referral side of this business. almost went out of business in 2008 and 2009. Why? Because all of his clients had virtually all of their business or I should say the majority of his clients had the majority of their business coming solely from referrals because that's what he taught and that's what they believed in. That's what they follow. Well, guess what, when the market shifted, and it became an REO market, all that referral-based business went away. And so those people struggled. And that's why they got out of his coaching program at that period of time, felt good to get a bunch of referral-based business. But unfortunately, it wasn't sustainable over a long period of time. Now, those of you that are saying yes, but Michael, we're not in an Oreo market right now. I get that. But it's coming again. Now, is it going to be that bad? Like it was in 2007? To 2011? Probably not. But the fact the matter is markets shift, it is a fact of life, it's going to happen. It's not if it's when, and when it happens. Nobody calls their buddy up and says, Hey, Brian, I'm losing my house to foreclosure. Do you have a great realtor? You could refer me to, like, nobody says that. And they hide from it, they avoid the conversation, because it's embarrassing to them. So they don't you don't get business in those markets by referral.


Brian Charlesworth  15:53  

So another question here from Lindsey, where have you seen that not be the case that cheaper leads are actually quicker cash conversion? Maybe you've never seen that. But I'm sure everybody wants to know, hey, how can you get a cheaper lead that converts quickly


Michael Hellickson  16:07  

Two great examples that thank you for the question, Lindsay, great question. My two favorite examples are actually the two best lead sources on the planet. Number one is referrals. Right, that's like, that's great, because referrals are super cheap. Even if you're, you know, spending some money to cultivate your database, the referral itself is super cheap, and they tend to convert very well. And they tend to convert fairly quickly. Also, sign calls are super inexpensive, and very high conversion, and they tend to convert to cash very quickly. So those would be my two favorite examples of something that's both low cash conversion cycle, and also a high ROI. So great.


Brian Charlesworth  16:46  

So we've talked about lead generation follow up, and third.


Michael Hellickson  16:51  

So lead generation is the first one lead follow up the second one, the second and the key with lead, follow up there's two keys with lead, follow up its speed, lead, and tenacity, a follow-up. All right. Now, we don't have time to go deep on this. I do talk a lot about this because honestly, this is the biggest place the only thing that real estate agents as an industry suck at worse than lead generation is lead follow up and if you don't believe me, why do you think realtor.com invent you know, Zillow and realtor calm came up with Zillow concierge and upcity. Right? And they started charging us for the lead follow up. Well guess what, if we were doing a great job of lead follow up, we wouldn't be paying for that service. And that service is highly expensive. In fact, they're changing their entire models to only doing that and charging us a referral fee for that business now. So


Brian Charlesworth  17:36  

a 35% referral fee. So are you 35%.


Michael Hellickson  17:43  

About that you're 100% correct on that, Brian. And not only that, that's today, I guarantee you that as they refine this model, that referral fee will be 40 to 45%. Over time, just like any relocation company out there. In fact, we may even see some higher points in some higher price point markets, you guys, you've got to understand if you want to run a very successful long term business, you have to get control of these things in your business. Alright, so it's lead generation.


Brian Charlesworth  18:06  

So we are going to one point on that, Michael, two that I just want to point out, I mean, if you you're talking about lead, follow up and speed to lead follow up. Yep. If you want to run a profitable business, it's one thing to do 500 transactions a year. But it's another thing to do 500 transactions a year and put $2 million in your pocket, right? That's how you're gonna run a profitable business, right?


Michael Hellickson  18:28  

That's exactly right. And, and that's where, you know, I always say, you can be right, or you can be rich, right. And what that really means is, we can either let our egos take over, or we can accept the fact that there are people who know more than we do about various things in life. And if we'll just listen to them, and we'll remove our ego from the equation, we can have success beyond our wildest dreams. And as evidence of that is, you know, there's a lot of people out there that run teams that have that do tons and tons of transactions, but are living paycheck to paycheck. The key is you want to be very successful, and you want to put money in the bank, and you want to make sure that it's not just about how much you make, it's about how much you keep, right? So I want to not only be putting money in the bank, but I want to convert that money to passive income generating assets, traditionally, real estate, right. So I want to be buying rental properties with that, by and large. Now, we're not going to go deep into that today. But understand that your real estate business shouldn't be the majority of your income forever. It should feed your ability to invest and then over time, your investments should take over and be a higher percentage of your income than your active income, which is your real estate sales. When you get to that point. You get to choose whether you work or not. You don't you know, it doesn't matter what company you're with. It doesn't matter what model you're in, as long as you're profitable and you reinvest a certain percentage of those profits


Brian Charlesworth  19:52  

Number three.


Michael Hellickson  19:53  

Okay, so we're gonna jump into habit number three, and then I'm going to give you guys those 17 lead sources. Don't let me forget having them roll and leave Generation haven't ever to lead follow up have number three is lead to conversion. Now let me say, this is a place that so many real estate agents are dropping the ball. You know, most real estate agents think their problem is I don't have enough leads. By and large, it's they're not doing a good enough job of follow up and they're not converting at a high enough level, I would be willing to bet that the majority of people watching right now could make substantially more money in substantially less time, if you would simply improve your lead conversion. And I'll tell you the first and it's very controversial, I get a lot of pushback on this. But I will tell you that I see this difference between the top producers in the world and those that are underperformers, very key thing that you can change very simple to do is how you handle a lead when it comes in and whether or not you set an appointment. Most real estate agents before they set an appointment, want to make sure someone gets pre approved or pre qualified, right? That's the worst thing you can do. We call that the sales prevention team. Because what you're doing is you're making them jump through hoops before they can do business with you. And as great as that sounds in a market where there's buyers coming out of the woodwork and it's just a crazy fast, high producing successful market right now, guess what times will change and you're going to need to have a very full pipeline if you're going to continue to make a great income long term. So all we say is drug dealers know more about conversion than real estate agents do, right? And I've never done dry. I'm not advocating doing drugs or anything like that. But what are they great at that we aren't right. They're great at getting you hooked on their product. And the problem is most real estate agents don't even understand what their product is. It's not the houses, you are the product if you're a real estate agent. So how do we get them hooked on you? We got to get voice to voice and face to face as quickly as possible with as many people as possible, right? So how do we do that we follow the lead of the drug dealer, write this down. first one's free, then you got to pay. That's it right? first one's free, then you gotta you got to give him a little taste. Let them try the product, let them meet you at a house, go show him a house or let them come to your office, if you want to do a buyer appointment first must somehow get face to face with them before you require them to get pre approved. Now, I'm a big advocate of and we are very successful at getting people pre approved before the first appointment. But first thing we do is we set the appointment, we give them what they want, which is I just want to see the house. Great. Here you go. Let's go see the house. And then we asked him the following question, write this down, I'm gonna give you this. And then I'll give you those 17 lead sources. So write this down. This is the script that works almost every time it's super low key, it's never pressure. All you got to say is after you've set the appointment, you have to schedule the appointment first. Once it's scheduled, then you can say the following. Brian, if they could save you 10 to $20,000 on your mortgage? Would you be interested in chatting with one of our lenders? Again, it's Yeah, see what he said he of course, like who's the one more on whatever say no, that nobody's gonna say no to that, right? So it's very lucky. If they could save you 10 to $20,000 on your mortgage? Would you be interested in chatting with one of our lenders, just super low key? When you say that everybody says yes. Now you have their permission to connect them with your lender? And so what you say is you don't give them the lenders phone number you say? Fantastic. Brian, take what I'm gonna do. I'm gonna have my favorite lender give you a call would that be alright? Yeah, that'd be great. All right, fantastic. Let me know how the call goes. I'll get you I'll get them in contact with you right away. Perfect. Done. Right. That's all you gotta do. All right, that said, Brian, can I give him this? This text in so they can get these lead sources?


Brian Charlesworth  23:28  

Do you want to share your screen?


Michael Hellickson  23:30  

I can't Yeah, let me just hold on one second. Let's make that big.


Brian Charlesworth  23:34  

Sorry. Here we go. 


Michael Hellickson  23:35  

Perfect. Okay, there we go. I'm going to give you actually 31 of my best lead sources. If you'll do it right now, like if you grab your phone and text, the words Club Wealth to the phone number 727-287-5993. Text, it's two words, Club Wealth. That's the name of our coaching company. Send that 277-287-5993 those of you that are watching this recorded, I'll still give you the 17 just make sure you send the words Club Wealth 277-287-5993. So that said, Brian, other questions before we wrap up?


Brian Charlesworth  24:06  

Yeah, just in wrapping up. Here's a question from Lindsey. If you were to implement one thing at scale for your team to generate referrals, what would it be?


Michael Hellickson  24:16  

I love you, Lindsey. Great question. seriously awesome questions. And that's a very, very easy answer, the single best thing you can do, if you want to generate more referral based business, we're talking about this post COVID. Even the single best thing you can do is client events, you need to do four client events per year. Now, you need to do them, obviously in a COVID, safe way, right. And there's lots and lots of ways to do that. We don't have time to go into all of those. But there's tons of great client events that you can do that you can do extremely COVID safe, that generate tons of traction, deepen those relationships with your clients, it's the single most important thing you can do to deepen those relationships is do for client events per year, one per quarter.


Brian Charlesworth  24:58  

So last question. Will Hey, it's Michael, how do we shift from multiple lead sources without getting overwhelmed working one thing? And now I've got to work all these things? How do I do that? I love it span?


Michael Hellickson  25:11  

That's a great question and spends a ball and don't spend for a number of years. So thank you for the question. span, what I would recommend is, don't do it all at once, right? Don't try and implement them all at once, what you do is you implement one, you get it automated, you delegate off as much as you can, and you eliminate any unnecessary steps. Once you've got that done, and it's fully again, as automated as humanly possible, then you're ready to go add the next lead source. And you just keep doing that. And I would suggest that this should happen about once a quarter, you should be able to add one new lead source each quarter. And I'm going to go ahead and I'm going to close that action. We'll leave that up. We're just about done. But one new lead source per quarter should do it for you. And it takes a little bit of time, you're not going to get to 15 2030 lead sources overnight. But it's very easy to add these. And as you do that, you'll start to find that, man, all of a sudden, I just got an abundance of leads. And now my biggest problem is I just need to hire more agents on the team to help handle the leads. That's a good problem to have.


Brian Charlesworth  26:09  

Michael, thank you. You're always awesome. Thank you again. It's been awesome having you on the show.


Michael Hellickson  26:14  

I appreciate it. Thank you so much, Brian, thanks for having me.


About the Author

Brian Charlesworth
Chairman and CEO

Brian is an entrepreneur and business builder. He has built and sold companies in the software, telecommunications, and franchise space. He’s passionate about technology and focused on changing lives through driving technology forward.