“20 Minutes of Successful Niche Secrets – EPISODE 18”,
Where I coach Joanne Johsnon
“PODCAST – EPISODE 18,” Where I coach Joanne Johnson. In this podcast, we discuss breaking into the sale-leaseback niche and targeting seniors who want to sell their homes and not have to move immediately.
Glenn: Hi! It’s Glenn McQueenie, and welcome to my 25-Minute Podcast. And this podcast is really about interviewing agents to try to find out what their niche market is or what their biggest challenge facing them right now is, getting an idea of who their target market is, and then helping them develop the unique process and system in order for them to really dominate their niche market. Because the riches are in the niches. So today I have a special guest and it’s Joanne Johnson from Keller Williams Lifestyles Realty in beautiful London, Ontario. So how are you doing, Joanne?
Joanne: I’m great, Glenn. Thank you.
Glenn: Good! Well thank you so much for coming onto the call, and I’m really pumped to talk to you about this. So before we get into finding out what your niche is and what you want to chat about, can you just tell the people listening to the podcast right now a little bit of your background and how long you’ve been in the business? Just fill us in.
Joanne: Sure. Yeah. This is my seventh year in the business. I’ve been with Keller Williams, this will be into my sixth year, and just very excited, as the business is growing. I’ve been in sales almost all my life, so it’s just a natural progression for me. And I’m just really excited about growing my business and kicking it off to the next level this year.
Glenn: Awesome. So what would you really love to figure out and drill deep today on?
Joanne: Well I’d like to talk about leasebacks and maybe the seniors market – maybe the combination of those two things?
Glenn: Okay. So for those listening right now, if they were to ask you, “What’s the leaseback?” what would you say to them?
Joanne: Well, for example, I have a prospect right now where I believe she’s a single mom, and she wants to stay where she is because she wants to keep her daughter in school. However, she’s having financial difficulties keeping the house, so she’d like to find somebody that’s an investor so that they would buy the home, and then she would be secure in having a lease there and be able to stay in her home.
Glenn: Right. So the great benefit to a leaseback – I mean, there are lots of them – but one of the primary ones is you can take your money off of the table right now and put it in the bank and save for your kids’ education or invest, but you don’t have to move. You can just stay in the house and stay on as a tenant. And what I found really attractive for the investor side of things is they can get reasonable rent for the property. And who better to take care of the property than the person who owned the house before?
Joanne: Yeah, that’s right. It’s their home. So absolutely – they want to stay there and look after it, and they still feel it’s their home. Right.
Glenn: Right. Yeah. And it’s interesting, that distinction you just made there – it’s their home. It’s not just a place to rent. This is their home. They were hoping for it to be their home, and for whatever reason, circumstances changed, and they’re like, “Okay. I’m going to try to get some money off the table.” Prices are up probably, what? About 15% or 20% this year in London, at least, would you say?
Joanne: They’re getting there, yeah. Somewhere close to that.
Glenn: And I know you guys are in a lot of multiple-offer situations like we’re seeing in a lot of other markets. So for some people, they might just say, “You know what? This is the best thing to do for me right now.” And I think most agents, whenever we’ve talked about sale-leaseback options, think they have to go and find the investor, too. And what I’ve found is, really, the MLS system will find you the investor, as long as you put something in the listing that says that the seller wants to stay on as a tenant for a period of time.
Joanne: That’s right. Yeah. You just have to make it very clear on there, and then it’s not a problem.
Glenn: Right. So what have you done so far on this right now? How far down the road are you on the sale-leaseback option?
Joanne: Well I did one for a client last year, and it worked out really well. They were both just about to retire and wanted the cash out of their condo to be able to buy a home along the water, and be able to go in with a strong offer, knowing that they didn’t really need financing on that, (or much financing on it). So we got the leaseback done for them last summer, and they just found their dream home along the water on Lake Erie there. So it was fantastic. They’re all excited. And the investor was happy, too.
Glenn: Right. So what I love about this is that there are so many win-win situations on these. So many times in real estate, we’re talking to sellers and they’re like, “Oh, should I sell first or should I buy first? And what if I do sell and I can’t find a home? Or what if I find a home and then mine doesn’t sell and the market changes?” There’s so much fear going on, and we deal with it all the time on a daily basis. And I think this is another arrow in your quiver that you can say to somebody: “Listen, here’s another option. You probably haven’t even thought about it, because I’ll guarantee you 99% of the agents haven’t even heard about leasebacks.” And say, “Why don’t we just sell your place and just stay? And you can stay here for a year or two until you find that perfect dream home?”
Joanne: Right. Yeah. And that’s what worked out really well for this couple. They’ve been really excited about the whole process.
Glenn: Excellent. So how are you generating your leads right now? I want to know where you are now, and then we can talk about some strategies on how to get a lot more leads.
Joanne: For that area specifically? I haven’t been doing a lot of lead-generating for that, other than random leads that I might find when I’m talking to people, cold calling.
Glenn: Right. Okay. So I think whenever we’re going after a niche market, we always have to start from the customer’s point of view, instead of what we think they want. Just pretend you’re your target market right now. You’re the perfect-fit client, and you’re siting there in your home right now, wondering what to do. So what do you think, Joanne, is keeping them up at night, in your experience? Or even if you had to guess? What’s keeping a senior up at night? If they are thinking, “Maybe now is the time to downsize. Should I do this? Should I not?” What do you think are some of their biggest dangers that they’re facing?
Joanne: Well one of the things that I’m finding with them as I’m talking to them is that they can’t afford to do the upkeep. Let’s say they know the roof’s going to need to be done in a year or two, or things like that, and yet they know they’re not ready for a nursing home, or they don’t like the idea of an apartment yet. So they can still function in their own home – it’s just that the costs of the upkeep and a few other things like that are making them question whether they should be staying. Whereas when an investor can come along, then they can take that off their hands and people can still stay and function in their home, right?
Glenn: Right. And what I found with a lot of seniors is they’re on pensions, and it’s a fixed pension (or a slightly indexed pension). And while they might tell you the inflation rate’s 1% or 2%, if you talk to most seniors, you know their Hydro bill has gone up through the roof, their food costs are more – everything is just going up at a much more rapid pace. Or what they’re doing in supermarkets now, where you see it’s the same product, except the package has shrunk by 30% and it’s for the same price. And so a lot of them are just feeling the pinch, and the gap between their safety comfort margin is being diminished just because of inflation. And for a lot of them, it’s like, “Oh. Do I have to go out and work again?” They don’t want to do that. “Do I sell the house? Well, the problem’s not that crucial right now, but it might be getting there.” But then they get the leaky basement or the roof needs to be done or the furnace is replaced, and all of a sudden their savings get depleted by 5, 6 or 7 or 10 or $15,000, right? It’s a big deal.
Joanne: Yeah, a very big deal. They don’t have that kind of cash flow happening, right?
Glenn: Right. Okay, so that’s what’s keeping them up at night. And a lot of times they’re getting pressure, right? Have you noticed they get pressured from their kids? “Oh, Mom and Dad, you should sell right now.” And they’re like, “Oh, yeah, I know I should sell. But I don’t really want to sell” because they just get set in their ways, right? So they feel the pressure to do something.
Joanne: Yeah, they’re comfortable in their home. And like I said, they’re not ready for a retirement home, or even an apartment yet. They want to be able to putter in their yard at least a little bit, or enjoy that part.
Glenn: Right. Well what I love about the leaseback option is it’s the other option that none of the other realtors ever talk about, right? So if you’re interviewing them if they are thinking about doing something, most agents are like, “This is what I think you can get for your house,” and “Where would you want to go?” and “Well, let’s go out and look at some places.” You can come in and go, “Listen, I think you’ve got a lot more options than just that, and one of the big options is this sale-leaseback.” And you bring it up and you explain it in a really simple way. And I would tell them, “You know what? If you want to get your family involved, you can. If you want to talk to your lawyer about this, this is no magic trick. This is just a very legit way for you to sell and stay where you are.”
Joanne: Right. Exactly.
Glenn: Okay. So what kind of unique process can we create in order to find where those people are? What’s our lead-generation system that we can get the seniors in London to put up their hand and go, “You know what? I want to find out more about this.” So are there particular pockets in London where there are a lot of seniors? Or are they sprinkled all throughout the town?
Joanne: I’d say they’re pretty well sprinkled throughout the town. However, there are a couple pockets that I’m considering, because they are homes that they’d more likely be able to stay in (areas that have more of the ranch or bungalow-style home, so that they’d physically be able to stay there).
Glenn: Yeah. It’s a lot tougher to stay in a three-story or two-story house than a bungalow. Okay, so I think one of the really cool things you could do is probably create a flyer that would invite them to some type of a seminar at the library or at the community centre. You have to almost get into the mind of your prospect here, right? What do seniors do if they want to find out about something or they’re still learning-based and curious? Most of them go and take either fitness classes or they go to lectures, right? So where do they typically attend those in your area?
Joanne: Yeah, there are different libraries and even some seniors’ centres around and maybe even a church hall or something where they have gatherings. Maybe offer them a bit of coffee and lunch or something.
Glenn: That’s right. So they can all gather together and chit chat and be social and get out of their house, because they spend a lot of time by themselves, right? So they’re looking for entertainment and an activity to come out and learn about. And what I love about a lot of seniors is they’re so active that a lot of times, it’s like, “Oh, next week we’re going on the bus tour to a theatre” or “We’re going here. We’re going there.” So they tend to like bus trips, because that’s what they’re used to doing and they’re full of a bunch of their friends.
Glenn: Okay. Do you remember the kind of paper you’d get when you went to public school, like your public school newsletter? It was always either green or canary-yellow or sometimes blue, and the reason that type of a delivery vehicle works for seniors is, first of all, it’s a pattern interrupt. They get a lot of high-glossy, four colour printing marketing, especially from realtors, with a big picture of their faces – “I’m number one. Thinking about buying or selling?” And then they get something that reminds them of when their kids went to school. And so what I found, doing that, is they just tend to open it more. So it’s canary-yellow, 8.5”x11” and then it’s trifolded with the banner up. Do you know what I’m talking about when I say the “trifold, banner up?”
Joanne: I don’t know what the banner up means, but I know the trifold.
Glenn: Yeah. Banner up just means that the heading of the flyer is sitting on the outside of the flyer.
Joanne: Oh, right. Sure.
Glenn: Yeah, it’s almost like they’ve bent the headline backwards so that it sits flat, so when you pull it out of your mailbox, the headline reads. And that’s just a good way because it captures their attention, because you’ve really got about seven or 10 seconds to capture it before they walk over to their blue box and throw it out, right?
Joanne: Yeah. That’s right.
Glenn: So if we did something there that said, “Here’s a chance for you to basically sell your home and stay where you are,” but I wouldn’t go too much into detail about it. I would do some type of copy on it that just said, “What if you could get all the money out of your home and stay in it for as long as you wanted to?” And a lot of them will go, “Oh, that’s maybe interesting.” And a lot of them have heard about reverse mortgages before, but I think the sell-and-stay is just a much better option, right? For some people, I guess a reverse mortgage (if you need income) would be better.
Joanne: But there’s a lot of cost involved in that that people don’t realize, too. Even down the road when they think they’re leaving money for their kids, there’s a lot of cost involved when they have to end that mortgage that don’t make it as appealing as what people think it is.
Glenn: So what if you were to invite them to a seminar, talking about leasebacks? I think the whole goal is to get as many seniors from that flyer to contact you, (and make it by telephone, because that’s how they’re used to communicating, not by email or text) – they call you, and you say, “You’re invited, and it’s going to be a Thursday morning, coffee and cake (or whatever), from 10 a.m. to 12 noon at the local library,” because they feel comfortable going to those types of venues (or the local senior home, or rec’s community centre). And I would probably say, “Find out the six different options you have.” And one option is do nothing and just stay in your house. Number two is sell your house, but stay on as a tenant. Number three is stay in your house but do a reverse mortgage. Number four is sell your house and go to a retirement home. Five is go to a condo. Six could be Assisted Living or move in with your kids or something, right? What if you were just to do a seminar giving them, “Here are your six options,” and you talked about the pros and cons of each option, and just let them decide what is the best option for them?
Joanne: Right. That’s a great idea. Again, I think it’s really important for them to feel like they’re in control, too. I think at that age, that’s part of it, too.
Glenn: It’s true. They want to be independent, right?
Joanne: Yeah. They don’t want to lose their independence.
Glenn: Right. And what if you could get one of the seniors’ homes or a couple of seniors’ homes in town to sponsor it, and they have an opportunity to hand out their material? You could bring a real estate lawyer in or even an accountant in to answer any of their questions, and they can talk for 10 or 15 minutes about the pros and cons of what you’re doing. I think all we’re trying to do right now is target them, and then give them an offer so that they can come to meet you. And then when you meet them, it’s all education-based, and without cost or obligation. Then the next step you’re trying to lead them on is what do they want to do? And it’s, “So, you’ve still got your six options, but if you want to do a leaseback, let’s talk about that. If you want to do a reverse mortgage, I can refer you over here. If you’d like to come on a tour of seniors’ homes, we can arrange that. If you want to go on tours of condos, we can arrange that.” There’s an agent in our office who I’ve been working with, and she did 10,000 flyers – a couple of those drops. The first seminar, she had 37 people show up at her seniors’ seminar. The second one, which was just this week on Monday, was 32 people. So last week she rented a van, and she had three other seniors who didn’t know each other go out and look at condos together. And they were all chit-chatty and stopped at the Tim Hortons drive-thru, and had a ball – just had a great time.
Joanne: Oh, wonderful.
Glenn: And now she stepped it up. So next week, she has two busloads of seniors going to look at condos at the exact same time.
Joanne: Wow. That’s a cool idea.
Glenn: Isn’t that amazing? That’s leverage, right? I think it’s just the coolest thing. And now, instead of going on a seniors’ bus trip to go to Stratford to see a play, it’s like, “No, we’re all going to go and look at condos together!” How much fun is that?
Joanne: Yeah, that’s amazing. That’s a great idea. Again, sometimes I think it’s the being alone in your decisions, and if they see other people doing things or talking about it, it makes them feel better, too.
Glenn: Right, because they’re all going through the same feelings and thoughts, and all looking at each other. And the biggest thing they talk about is the pressure they’re getting from their kids to do something.
Glenn: And they don’t want to do anything. You’re breaking the rules of the ecosystem, where the kids tell parents what to do. That’s just not the way they were raised, and they really resist it. And the more you push them to do something, the more they dig in their heels, and they’re not going to move.
Joanne: Right. Exactly. Again, they want to be able to make their own decisions still and not lose that decision-making or independence, right? Because it happens a lot, as each step of getting older happens, sometimes.
Glenn: That’s right. And some of them will involve one child or whatever. They just might feel more comfortable. And let them bring their children. I don’t care who comes to the seminar, but whoever makes them feel more comfortable and at ease is who should come. And if it’s none of them – great. And if it’s one or two, then perfect.
Joanne: Yeah, that’s right.
Glenn: Because the beautiful thing about creating these unique processes is, this magic occurs when you just give the consumer what they’re looking for. They actually convert themselves.
Joanne: Yeah, that’s true. I didn’t think about it that way. Some of the ideas you’ve got there just expanded what I was working on. So it’s going to give them more choices actually.
Glenn: Right. And the beautiful thing about when you create this one niche market is, first of all, you’re only selling large detached properties, so your average price goes up. You get to (when you list those properties), maybe sell it to an investor on a leaseback, which is probably what the goal is, but you can still market them just like you would any other house, right? Invite the neighbours over to your sneak peek preview. Do your public Open Houses. Do your forward marketing. Do info boxes – “Coming Soon.” For every senior who actually decides to do this, you could easily generate three or four more pieces of business. And here’s the cool thing. What if you got this going at such a high level, that instead of going to the MLS to get your investors, you said, “You know what? I now have 30 seniors who are thinking about doing a sale-leaseback.” You could now do your next seminar series, which is the Joanne Johnson Investor Series on how to buy sale-leaseback properties. And now you start going after all of the investors. They start coming to your seminars, and then you get this beautiful, magical thing that happens, where you get what they call “the gift of triangulation” – where you have the listing, and you also have the buyer and the seller.
Joanne: Right. Cool. That is great.
Glenn: And it can still go on MLS no problem, because we always have a duty to get the most money for the sellers. But there are also going to be some sellers who are just like, “Oh no. I don’t want anyone to know.” They’re very discreet. They don’t want anything. And you can bring them your own investor at that time, who pays fair market value. It’s always conditional on getting the lawyers to review it, so everyone feels good about everything. And then you can just keep solving more and more problems. And then for every senior that you help and do a great job, then because you’ve provided not only the unique process to find them, but now the unique experience of what it was like for them to deal with Joanne Johnson, they all chit-chat and they’ll tell all their friends, “Oh my God, you have to call Joanne. She was so great. She was so fantastic. I could’ve never done it without her.”
Joanne: Yeah, that’s an excellent point, because they do have that time to be able to get together with their friends and talk about what’s happening their life, right?
Glenn: Right. And it’s just a beautiful thing. But I have to tell you that you have to be patient. This is not, “Okay, I’m going to go do this and everything’s going to be amazing tomorrow.” This is probably a slower niche that you will be building, but it will become one of the best business niches that you’ve ever created in your life. And then here’s the best thing: the next leverage piece for you is, what if you could just duplicate this model everywhere? It doesn’t have to be just sale-leasebacks. It could be your unique package –all the forms you need and everything you do for whether they’re going to be doing leasebacks or doing reverse mortgages or moving. And you could do your own book about this, because there are seniors in Sarnia and seniors in Windsor and Chatham and Toronto and every other city in North America who will have this problem right now.
Joanne: Yeah, that’s right. Very true.
Glenn: And the beauty for them is, they’ve usually bought their home a long time ago, so they’ve really built a lot of equity. But a lot of them come from the generation of being very frugal, so they’ll never, ever really spend a lot of that money. But at least they’ll have the comfort of knowing that they’ve got the money to basically really fund the rest of their life. And also they don’t feel like they’re living pension cheque to pension cheque, and they can give back to their kids and grandchildren. What a win-win situation this is.
Joanne: And they can watch their grandchildren or children enjoy it, too, as well as taking that pressure off of maintaining the house. I think that that creates a lot more than people realize, when I’m talking to them.
Glenn: Exactly. I know we have to wrap up, but the beautiful thing is, as a realtor, you feel good about yourself that you’re making a difference and keeping those people safe. And what a great, fantastic way to build an amazing business.
Joanne: Thank you so much, Glenn. That really expanded the theory I was thinking about, so I appreciate that.
Glenn: My pleasure. I’m really excited for you. I think it’s going to be amazing, and I just think about all the happy seniors that you get to serve. I think it’s just going to be such a win-win situation for you.
Joanne: I’m going out to get some canary-yellow paper.
Glenn: That’s right. Okay. Thanks a million, Joanne, for being my guest. So it’s Joanne Johnson from Keller Williams London Lifestyles in beautiful London, Ontario. If people have parents in London right now, they might want you to help do that sale-leaseback for them. I think that’d be really cool.
Joanne: Thanks Glenn. I really appreciate the help.
Glenn: Okay. See you. Bye Joanne!