Hey guys and gals. This is Trevor from Carrot, and I’ve got a video coming at you that’s going to walk you through as an agent or an investor, how to embrace something that we call the hybrid real estate strategy.
Now you’ve probably been seeing in the market a lot of things happening in the last two to three years. Around 2017 here at Carrot, we were starting to talk about the hybrid strategy that will become increasingly popular, where a house seller works with a person who is both an agent and an investor.
Now, many of you watching this might be just an agent serving people through the MLS and mainly working with sellers who are motivated to sell retail and get top dollar. And many of you might be watching this who are wholesalers or house flippers who are used to buying properties and acquiring properties at a discount.
Now, one of the things we saw in 2015, 2016, and 2017 was a lot of real estate agents weren’t collaborating with investors. There were a lot of investors who complained that they couldn’t find investor-friendly agents, and the times have changed.
We’ve started to see laws being enacted around the country where it makes wholesaling harder to work. We’ve started to see iBuyers and big tech giants coming in to start to disrupt parts of the market. And with that disruption, with those law changes, what’s happening is there’s a concentration in the middle.
There’s a concentration in the middle of the market where sellers are demanding an easier way to sell their house.
So for real estate agents who are only working with people who are motivated to sell retail where the houses are in show-ready condition, they don’t need any repairs, or where the person can wait multiple months in order to get top dollar…
If you’re one of those real estate agents who wonders,
“Why would someone ever want to sell a house for below what it’s worth, below what they could sell on the MLS to an investor when they can just list it on MLS and get top dollar?”
Well, I’m going to be walking you through why an increasing amount of sellers are choosing to work with a direct house buyer, an iBuyer, or a local mom-and-pop investor like we work with here at Carrot a lot.
And on the investor side of things, you might be looking at it going,
“Why would I ever want to get my real estate license?”
We hear that all the time and I’m going to walk you through why you really need to be seriously looking at either getting your real estate license or collaborating with one of the millions of real estate agents around the country to help you serve more of your sellers.
I want to drill this in right now: YES, there are massive side benefits to moving forward with a hybrid real estate strategy as an investor and an agent or an agent and an investor.
But the main reason to do hybrid isn’t just to put money in your pocket. There’s a massive upside to it as I’m going to walk you through exactly how to do it.
The main reason to do it is actually to serve your sellers better because you can imagine that if a seller reaches out to somebody, they want to sell their home.
If I were to survey 100 house sellers, 99 and a half of them would say that they would much rather sell their house quickly for cash, not have to wait for a buyer to find financing, not have to have open houses, not have to have a bunch of people go through their home for a fair price that they agree within a matter of days or weeks.
99 out of 100 would say that they would much rather do that than list it on the market and all that goes through that process.
Now, why do 85% of homes sell on the market with real estate agents through the traditional routes?
It’s because that’s the way that most people know to do. And what people do is they follow the path of what they know best.
But with iBuyers coming into the market, what we’re finding is it’s actually making iBuying or directly selling your home more mainstream to the average home seller.
If we think about Tesla. Tesla came along, before that electric cars were not popular. People didn’t want to drive electric cars, but what happened is Tesla came in and they made an amazing experience for the user.
They actually solved the problems and provided a better experience, and then they also went out there and grew the electric car market. So Tesla came along and raised the entire market, made the electric car market bigger than it ever was.
That’s what’s happening with iBuyers.
iBuyers are coming in and they’re going to be getting deals that real estate agents normally would have gotten.
They’re also going to be getting deals that real estate investors normally would have gotten.
They’re going to be growing the overall pie for people who want to sell their home directly to an end buyer or to an investor versus listing on the market.
So what does this mean for you as a real estate agent?
Well, there’s a lot of competition right now in the market. And so you need to find ways to differentiate your offering.
So if you’re showing up to every single house seller appointment, when you’re offering them one option, which is,
“I can list your home and here’s my fee, take it or leave it,”
How many of those home sellers are you likely losing because you’re not actually solving their problem the way that they want it to be solved?
If you’re a real estate investor and you show up to that house and you say,
“Hey, here’s my offer. It’s a discount offer. Take it or leave it,”
How many of them are actually perfect people who would rather list on the market and take full retail?
How many of you guys, real estate investors or real estate agents, are completely ignoring the other side of the market?
Where you’re trying to paint everything into your pretty little box of, it’s got to look this way to list on the market or you’re painting it in your pretty little box where it’s got to look this way if I’m going to buy it at a discount.
I’m challenging all of you to become a hybrid in the next real estate cycle or heavily collaborate with the other side because if you don’t, you’re going to be struggling big time.
What Is Hybrid Real Estate?
Hybrid is essentially a seller strategy, not a buyer strategy.
And that’s something a lot of people have confusion about. Do I make one website? Do I make two websites, one just for retail and one just for wholesale?
I’m going to walk through exactly what you do with your websites and exactly how to deal with that and what to do with your offers to your sellers and how you serve them best, whether you’re an agent or an investor.
Hybrid real estate is a seller option where you’re serving sellers up with multiple different offers.
It’s a cash offer. Hey, if you’re looking for speed and convenience and are willing to take a little bit of a shave in equity, here’s this.
If they want top dollar, here’s what we can list it for them in the market.
That’s all that it is.
It’s going in there and saying,
“We can help you no matter what your situation,”
Versus we can only help you if you fit in this box.
So the traditional approach like I’m showing below.
You’ve got a motivated seller right in the middle. And that seller traditionally is going to go reach out to a real estate agent because everybody knows 5, 10, 15 real estate agents, but very few people personally know a real estate investor.
But now we have these iBuyers coming in that are making that more popular.
So they’re hearing of “Opendoor”, they’re hearing of Zillow buying homes, “Offerpad”, and the mom and pop home buyers that we work with that have been around for 30 or 40 years.
iBuying is not new. It’s just a fancy phrase that the tech industry placed on their well-funded competition.
So most people would go reach out to a real estate agent.
And if they’re:
- Looking to get top dollar,
- Willing to wait multiple months,
- Don’t mind people coming through the property; you’re having open houses or all that goes with that,
- Okay with paying the fee that goes to the real estate agent,
Then they’re going to go that route.
That’s where the majority of people are going to go. Probably 80% of sellers are going to go that route.
Now, if you’re a seller and you are:
- Looking for speed,
- Looking for convenience,
- You don’t want to list it on the market,
- You don’t want to have open houses,
- You don’t want to have people coming through your property,
- You don’t have the time because you’re relocating,
- Or, you just inherited a house from your uncle and you don’t want to deal with all the hassles of fixing up that property in a way that’s going to make it so it can be sold. Or, you don’t have the emotional investment in the property because you inherited it and you just want to get it done with because there are so many reasons why someone wouldn’t want to sell for a cash offer.
So on the traditional side of things, a real estate agent is going to put the house on the MLS. They’re going to try to get top dollar for that property. They’re usually nicer houses that are show ready.
Sometimes it will be the fixer-uppers, but usually, it’s nicer houses. About 80% of sellers are going to go this way, which means you as an agent are probably throwing away 20% of your leads which could be some of your most profitable deals of the entire year, and you’re now not serving those sellers.
You’re throwing them back out to the streets, back out to the wolves to try to find their solution when you could actually serve them.
Now, as an investor, you’re going to take it and buy it off-market, you’re going to then fix it up and sell it on the market to somebody.
So real estate agents, investors are your friends because if you work with them tightly, you’re going to then find out that when they fix up a property, they’re going to be listing on the market to sell retail.
So this process is not cutting agents out at all. It’s actually raising the values of the homes that you’re going to be able to sell and then giving you more inventory of great homes to sell on the market versus all these homes that need fixing up.
That is where the real estate investor plays a massive role in that. And a lot of agents don’t grasp that and you really need to in this next cycle.
The investor is going to offer them speed and convenience.
Let me tell you an analogy.
I’ll hear a lot of real estate agents saying,
“Why would someone ever sell at a discount when they can sell on the market and get $40,000 more, $20,000 more?”
Well, let me throw this at you.
When was the last time you went and bought a car at the car dealership and that car dealer sat in front of you and said,
“Do you have a car to trade in?”
And almost all of us always say, yes, I want to trade it in. And we know when we’re selling them that car, we’re selling it at a discount.
We know when we’re selling them that car, that we could go over to Craigslist and we could sell it for more money if we’re willing to list it on there, if we’re willing to do whatever repairs are needed so the person is going to take it and they’re not going to come back on you liability-wise, to answer the phone calls, to let people drive it, to do all the paperwork that’s involved with it.
We choose to not do that and we choose to trade the vehicle in because of speed and convenience even though we know that we could sell it for more.
So it’s the exact same thing for a house seller.
The real estate investor is going to offer them a fair price. A seller won’t agree to a price they don’t feel is fair. Now it might be below what they could get on the market, but they’re agreeing to a price that they feel is fair in exchange for the speed and convenience and the service.
20% of these are those types of sellers, which means, real estate investors, you’re throwing 80% of your leads away right now if you’re not a hybrid or if you’re not working heavily with a real estate agent.
Real estate agents, listen to that. If you want more sellers if you want more listings, one of the best sources for listings is to work with a real estate investor or become a hybrid agent investor because 80% of those motivated sellers come through your Facebook Ads, through Google search, and through Carrot.
80% of those actually want to sell retail. And so that’s one of the most underserved lead sources the agents completely ignore and you guys should be going after and we can help you.
The last part of it here is investors tend to profit two to four or two to five times higher profits per deal on those deals than a real estate agent would gain for commission.
One of our Carrot members, Anthony Beckham, we were chatting not too long ago. He’s actually here locally in Roseburg. He is a hybrid agent/investor. He always talks that his average profit per deal as an investor is around $20,000 to $30,000. His average agent commission is around the $7000 to $12,000 range.
Add those numbers up! Would you love to be able to do fewer deals, and fewer transactions, help more sellers, and actually earn greater revenue while providing an amazing community service?
Hopefully, the answer is yes.
The Hybrid Real Estate Agent First Strategy
On the other side, you have the hybrid. The hybrid is the one who is both an agent and an investor as I said. The cool thing is you’re offering your seller more options. You’re offering them a better experience. You’re solving their problem rather than throwing them back on the streets to solve their problem.
You’re going to be increasing your revenue as a hybrid 30 to 50%, sometimes more, just by taking those same leads you already have and dealing with them in a different way.
We’re not talking about getting more leads. We’re talking about using the leads you’ve already gotten, better, or adding on a lead source like Carrot to make it great: higher ROI and competitive advantage.
How do you do hybrid now using Carrot or just in general in your business?
Well, there are three different ways to do hybrid and it really depends on what your strategy is, whether you’re an agent first or an investor first.
I’m going to start with agent first.
Once again, I want to emphasize that hybrid is a motivated seller strategy.
It is not a buyer strategy.
Buyers for retail are not going to be buyers for an investment property or wholesale usually. Sometimes they will be, but not usually.
Sellers who want to sell retail do become buyers for retail, but sellers who want to sell wholesale don’t automatically become buyers who want to buy retail also.
So what we’re saying is this is straight-up a motivated seller strategy. That’s what hybrid is.
And so if you’re an agent first, and what I mean by that is you’re known as an agent in the local market. People know you as an agent, you market yourself as an agent, you have your main website that’s an agent, you are an agent, but you also invest on the side.
Now, you’re going to need to have your retail agent website. You’re going to have IDX attached to that. It’s going to be mainly for buyer leads, but you’re also going to get seller leads through that. It’s going to be for credibility.
It’s going to be great for driving Facebook ads to it for sure and SEO, search engine optimization in Google is going to be amazing for that.
But you’re going to want a separate website that’s just 100% geared towards a highly motivated house seller. Trying to mash the two together in one website doesn’t work well because you’re not speaking that motivated house seller’s language.
This hybrid-motivated house seller website focuses explicitly on the language that a house seller would want to hear so you can solve their problem. But the difference with the hybrid site versus our standard motivated house seller websites here at Carrot is they’re going to show multiple options to sell.
Now we have a hybrid template that you can activate in the Carrot system that shows this, or you can use this training and execute that and build it out on your website solo.
But, on the hybrid site, you’re going to show,
“Hey, we can do a cash offer or we can sell it enlisted at top dollar.”
You’re going to show them case studies. You’re going to show them how you do it and give testimonials from people that did both.
You’re going to be driving traffic to this from SEO. It’s an amazing spot for motivated house sellers. Google Ads is actually one of the best spots for house sellers. Facebook ads also work. We usually start with Google Ads, build up credibility on that, get your reviews on there, and show that you can buy or list it for top dollar.
The Hybrid Real Estate Investor First Strategy
Now let’s say you’re an investor first, but you have your license, but you’re not an agent in the market, and you’re not looking for buyer leads per se. You’re not looking for retail buyers.
Well, you don’t need a retail website, then. You don’t need that website with the IDX. You don’t need that website that shows that you’ve got a brokerage or real estate agent, a real estate agency.
If you are known as an investor, but you just have your license so you can commission share with other agents or something like that, what you need is a hybrid motivated seller website that I talked about earlier.
Whatever other types of websites with Carrot, cash buyers, rent to own, your land, whatever the types of investing or leads you’re looking for, but you don’t need the retail site with the IDX if you’re not looking for retail buyers.
Let’s say you’re an investor first, but you work with retail buyers.
We have a member, Raul Bolufe, that we were talking to on the CarrotCast recently… he is this person. He’s an investor first. He partnered with a broker so that another person’s the broker of record in his state.
And what they do is they take their motivated seller leads and the ones that don’t want the discount cash offer, but want retail, they then partner with them and they list that through their brokerage, and then they do collect those buyer leads.
So you do, in that case, need a retail website. Their primary business is driven through their investing side, through their motivated house seller marketing. Still, their retail side is where they collect those buyers so they can sell their house flips quicker and also, so they can capture more of those commissions and add 30 to 50% extra revenue in their business with no extra marketing at all.
Advanced: Adding a 3rd Option
There’s an advanced way to do hybrid, and we’ve got a case study with Eric Young and how he does this.
We have other members that do the same thing.
Option #1 – Sell Fast for Cash
So you have option number one we discussed, which is selling your house for cash. That is exactly what iBuyers are doing and they’re even now starting to say that they’ll list the home and compete directly with real estate agents or sometimes they’re collaborating with agents, but that’s option one.
If that option doesn’t work for people, you as a hybrid should always suggest that the seller does exactly what’s going to help them the most.
Most of the time, you’re going to suggest to the seller,
“Hey, you should really take this offer over here. You should really list it on the market because you’re going to get X price more for that, but if you are looking for speed and convenience, they’re willing to give up a little bit of your equity in exchange for that. Here’s the cash offer that we can make for you.”
Option #2 – List for Top Dollar
Number two is listing on the market, like I said, for top dollar.
Option #3 – Fix and List
Number three is what we call the fixing list. And the fixing list is kind of a hybrid of the two.
The fixing list is saying…
“Hey, Mr. and Mrs. Seller, you have a great house. If we were to list it on the market, it probably would sell pretty quick for about $300,000, but if we were to invest about $50,000 or $25,000 into fixing up the kitchen, this bathroom, putting new carpet in, I think it’s pretty quickly going to sell for 375,000 on the market where it is. So Mr. and Mrs. seller, what if we provide our money to do the full rehab?
We’ll bring in our construction crew. I’ll show you some good examples of the great work that we’ve done. We will do the work. We’ll put in our money to do that $25,000 of fix-up, and then we’ll list it on the market for you, and then over the price of the $325,000, we split that money. I get my $25,000 back right away since I put that money in to fix it, you pay me my commission on the first $300,000 and then we split the profits right down the middle on the extra.”
So you, as an investor/agent hybrid, you will earn the commission on the $300,000. You will earn the extra $25,000 in profit because you split that $50,000 in profit. And now that your seller, rather than selling for $300,000, all the other agents are offering that they can sell it on the market, you sold it at $375,000.
You took your money back. You took your profit back, and they got an extra $25,000 in their pocket, and the end buyer has an amazing, beautiful house.
Now, if you’re a real estate agent or a hybrid investor/agent who offers that service, can you tell me that you would not be winning in your market big time because every seller would want to work with you?
The answer is you would 100% be winning.
How Much Money Are You Leaving on the Table?
So I want to ask you this as a real estate agent and investor, how much money are you leaving on the table right now, and how many sellers are you underserving and throwing back to the market or not putting enough money in their pocket because you don’t know how to serve them well with the hybrid real estate strategy?
How many leads are you giving up as an investor or an agent because you’re trying to fit everything in that pretty little box for the MLS or the investor side of things. You’re completely ignoring the other side of the market that’s going to keep growing and growing and growing as the iBuyers really penetrate the market more?
You have to make the shift as an agent. You have to make the shift as an investor, and we’re here to help you guys and gals do that.
We have amazing websites for real estate agents, amazing websites for real estate investors. We help you attract the most motivated house sellers and buyers, and tenants. And we help you do that through evergreen marketing with our inbound marketing system.
And we want to help you increase your ROI, leverage more of your leads into deals, grow your business without growing your activity, and serve more sellers, launch a hybrid site here on Carrot.
Post in the comments section below what you’re doing right now.
We’d love to collaborate, answer your questions, and help you do hybrid leading into the new year.
*The new hybrid site template is currently available to investors how are Advanced Marketers only. This is our promise to give Advanced Marketers first access to new sites and features.
Existing members need to know the following:
- A new site is required if they wish to use the hybrid template.
- This help/strategy guide will offer steps to uplift the content on your current site (based on content used for new site + existing hybrid site messaging).