Tony has been in the business for a while and is here today to share some of his best ever tips with us. We’ll focus this conversation on how he gets most of his word of mouth referrals, which is very important for real estate investors, and entrepreneurs of all kinds. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
Best Ever Tweet:
“We are valuable and we need to show that” – Tony Ray Baker
Tony Ray Baker Real Estate Background:
- Real estate agent for 25 years that focuses on residential real estate, makes $300k net profit per year
- Teaches marketing to agents and small business owners, helps investor clients purchase investment properties, has two rentals of his own
- Takes 60 vacation days per year
- Based in Tucson, AZ
- Say hi to him at www.tonyraysmarketingonadime.com
- Best Ever Book: The Power Of Now
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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast, where we only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Tony Ray Baker. How are you doing, Tony Ray?
Tony Ray Baker: I’m great, thank you. How are you?
Joe Fairless: I am doing well, and looking forward to our conversation. A little bit about Tony Ray – he’s a real estate agent (has been for 25 years) that focuses on residential real estate. He makes $300,000 net profit per year. He teaches marketing to agents and small businesses, helps investor clients purchase investment properties, and has two rentals of his own… And he takes 60 vacation days per year. Based in Tucson, Arizona. With that being said, Tony Ray, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Tony Ray Baker: Yeah. I started 25 years ago, I’m actually celebrating that this month – this is my 25th year…
Joe Fairless: Congratulations.
Tony Ray Baker: Thank you. I had a rough start… My very first year they wanted me to cold-call, and door-knock, and do all that stuff that I didn’t wanna do… So I didn’t sell a house my very first year, and my broker, who was nice as could be, asked me to leave… [laughter] I was just kind of wasting space…
Joe Fairless: And it sounds like you kind of deserved it, too.
Tony Ray Baker: Yeah. You know what, here’s the thing – my family was all about reputation, my dad was all about reputation, and so was my mom… And the one thing I refused to do was destroy that name they had created in our community. They’re very well known here, in a very positive way, and I just couldn’t grasp doing something that felt against my ethics… And door-knocking and all that stuff was just not for me. So I asked the broker if I could stay longer, and told the broker I wanted to have people come to me like a dentist, or a doctor, and make an appointment, and that work with me Monday through Friday, 9 to 5, and appreciate and be thankful to have my counsel and advice. That was the business I wanted… And at the time, she said “Alright, I’ll give you one more year, but you have to go meet this guy named Joe Stumpf.” And Joe Stumpf was just starting with By Referral Only at the time, so I went and met with Joe and he taught everything that I was about… So I followed him around for quite a while, and built my business based on all referral, and taking care of clients, and high ROI, and a lot of time to do what I wanted to do in life, and that’s where I come from.
Joe Fairless: Well, what we’re about to learn is applicable to any type of focus as a real estate professional or investor, because referrals are the number one influencer of purchase intent – word of mouth referrals. So let’s talk about this… I’m excited to talk about this.
You said you went to this gentleman and he taught you everything that your business is about, and you built your business on referrals… Talk us through what you learned, please.
Tony Ray Baker: Well, there’s a lot, and that took years and years… But the basis for me was — Joe and I sat down and he said “Let’s design the life you want, and then let’s fit the business into that life.” I had lost a best friend at a very early age, so I realized life was short and I needed to not take each day for granted… So I wanted to live a happy, very good life while I was enjoying real estate. And any aspect of real estate I didn’t enjoy, I wanted to make sure I had somebody who could take care of it for me, so I stayed in the “happy zone”, if you will…
So when we sat down and designed the life I wanted, it was “I wanna go to Europe or travel around the world every year. I wanna take a vacation every couple months. I won’t work on Sundays. I don’t wanna work on Saturdays, if possible, and I wanna be home at night, and I wanna have dinner, or do what I wanna do, like everybody else.” So that’s what we created. And we designed that actually with calendaring, and scheduling, and learning time management… And then we worked clients as they came into the system; we worked with them on what the benefit was for them to work on my schedule and to not be in the rat race on weekends, competing with everybody else… And it worked out beautifully.
I think the other thing that Joe really hit me and taught me was the authenticity of just doing business my way, and being me in every aspect, and letting people know who I am, and attracting those right people to me, and being okay not to attract all the rest.
And then as the business grew and I had more and more clients, the beautiful thing is they sent more and more people just like them. Just in March I invited a couple hundred people to one of my houses for a party, and 125 or 150 of them showed up… And the neat thing is that they all get along, and they all meet each other, and they all become little mini-tribes within the big tribe… And it’s just wonderful to watch how they all connect, and the things that comes out of all of those relationships. But there’s a common thread, and that’s that right energy that’s attracting, if that makes sense.
Joe Fairless: That does make sense, and I understand what you’re saying. So you mentioned that you first focused on designing your life, and two components of that was 1) no working on weekends, and the other was “Be home at night.” You mentioned that you would talk to your clients about the benefits of being on your schedule. How did you communicate that to them, so that they said “Oh, okay, this makes sense, period.”
Tony Ray Baker: Well, one of the things — and just to be clear, if we have a client that’s coming from out of town, and they’re flying in and they’re only gonna be here for Friday through Monday, we’re definitely gonna take care of them. We’ll never let a client not have the best of care. That may mean also that I may have an agent help me if I need to, but usually, we give them our attention.
The reality is that if they’re coming in from out of town, a lot of times they get better flights and better timing during the week, and we’ve discovered that a lot of them don’t wanna come in on a weekend, so that works out really well.
We do about five million a year in relocation via websites now that I’ve created, so they are very happy to come in without being in that rush on the weekend. And that’s one of the things I explain to all of our buyers, as buyers reps – when we’re out there with you and everybody else is shopping on Saturday, and offers are all coming in on Sunday, you’re in that competition. But if you and I are out there looking at properties on a Wednesday, on your lunch hour or after work or whatever it is for you, as soon as we write an offer, you’re probably not gonna be competing as much… And that is because everybody else is scheduling for weekends.
One of the things we’ve discovered now in the hot market that we’re in is we don’t have time to do three-hour runs and take people out and show properties, because houses are moving very quickly. So we have all of our clients on-call every day, and if a new house pops up that’s gonna meet their needs, we’re running to show them that house as quickly as they can get out of work on a lunch break, or whatever, and that way they can be first in and first to write an offer. So the benefits to them are obvious, once you explain why you don’t wanna be on the weekend. Just this weekend we’ve listed a house on Friday, I had five offers by Sunday.
Joe Fairless: Let’s say you do a phenomenal job with a client. They love you, they love the service that they had as a result of the transaction, and now you are leaving the title company; they have closed on the property. How do you stay in touch with them on an ongoing basis, so that whenever they sell that property, years down the road, you’re still top of mind?
Tony Ray Baker: That’s a great question. First of all, we tell everybody we never leave them; we’re a ball and chain. Anything they need from us, they call. We also offer our little black book of vendors, and anybody they need for that house, they will call us and we will help them with the right people to come out and remodel, make repairs, whatever they wanna do. We also are foodies, so they call us for restaurants, for food, all over the city, which is great.
We do snail mail… So I still do an old-fashioned newsletter that talks about fun things. It’s not to do with real estate, it talks about our vacations, and things I do in life, and things I’ve learned, and stories, and things that are of value… I’ve been doing that for 20-some years, and they love the newsletter.
We do an email campaign, which actually is interactive email that allows them to click every month on their property, and then it actually starts calculations for them, and it teaches them anything they wanna know, like how to pay off their mortgage early, what would it be if they paid $100/month, what would that look like, what would they save, is it a good time to refi or not refi…? So it’s a very interactive email that lets them play with their property in their area, and they love that product. I get about a 91% open rate on that every month, which is crazy, right?
But one of my younger guys, one of my millennials said it feels like the stock market for him, because every time he opens it, he sees his value moving up, and he gets to see his mortgage moving down, and it just makes him feel good to open that email. So I think that’s why that’s such a great one.
So we hit them with snail mail, we hit them with email, we make sure we talk to them on the phone at least once a year. Many of them more than that, because we’re interacting on other levels, with other groups.
We involve them with our groups. We run a wine club, and then I’m on the board of directors for Pet Partners Therapy Animals, so we involve all of our pet-loving clients with that as much as we can… And then we of course do appreciation parties, and I randomly text people. When I think about somebody, I randomly send them a message to let them know I’m thinking about them.
So I try to hit them on all of those places, because my theory is “Be where they are.” So I wanna get them on snail mail, email, text messaging, phone calls, and in person. And then my other thing is social media. I use Facebook, and make sure that every client is in Facebook that has a Facebook page… And then we give them fun things in Facebook, silly stuff, funny stuff, whatever it is, just to keep them seeing us in every world they are.
Joe Fairless: The appreciation parties – how frequently are they done, and can you describe what that is?
Tony Ray Baker: Right now what we’re doing is a block party. We take one of the vacant houses, one of our rentals for example, we leave it vacant, and we actually use it for our incoming relocation folks. We let them stay there while they’re looking to get a house, if they need a couple months… So we use that property also then for a big block party, and our neighbor across the street actually has a really great band, so we set them up on the porch across the street. Then we bring everybody in, and the rest of the neighborhood piggybacks a “porchfest” is what they call it, and we put 15 live bands on everybody’s porches.
We bring in food trucks, and there’s a park for the kids to play, and we give them kites, and we bring in food and wine and beer and sodas, and everybody comes out and hangs out with us on a Sunday.
The nice thing is it’s very down to earth, because it’s at our home, and it shows us as normal human beings, and we all get to hang out and listen to great music on a beautiful Sunday. It’s during really nice weather, and it’s just a really fun party.
The other thing we do is on a random spur of a moment on a Tuesday night I’ll text 50 people and invite them to a happy hour event at a hotel or someplace. Typically, we get 45-50 to show up, and we all hang out for a happy hour.
Joe Fairless: With the house party, what’s your budget for that and how do you determine the ROI?
Tony Ray Baker: I think that’s really hard to determine an ROI when it comes to parties. For me that’s part of the entire marketing. When I’m looking at my numbers, ROI on marketing – I want 10 to 1 or more, and I know that’s a super-healthy number. As a matter of fact, I just had a Zillow kid tell me that 2 to 1 was really great… [laughs] But I’m looking for 10 to 1.
What I look at is all the marketing that we do – the newsletter, the email letter, everything we do that is specifically client-focused, if I look at that number and it’s 12k a year (for an easy number), let’s say I spend 12k a year, I need to make 120k. And I can look at that because I track every single client where they came from, including the tree that they’re related to. So I can see the lifetime value of every client.
When I’m looking at those numbers, if I’m spending 10k and I’m getting 120k in referrals, I’m doing well. So I have to lump all that in, because I don’t know that there’s a great way to get an ROI on one specific item. All those little things you do to be with your clients, I believe that creates the big picture at the end of the year when you look back.
Joe Fairless: Okay, got it. That makes sense. So what’s your budget for this year?
Tony Ray Baker: My budget for spending, in total?
Joe Fairless: Mm-hm.
Tony Ray Baker: I probably will stay around 30k for total marketing for clients.
Joe Fairless: Okay… Which aligns with your 300k net profit for the year.
Tony Ray Baker: Yeah, we do a little better than 300k. Each year is obviously a little different…
Joe Fairless: Sure.
Tony Ray Baker: You know how that goes. But the goal for me is I’ll always want to run a 60% profit or more, and the ROI is a big part of that. But I have to be very careful, because we go to Europe for a month every year, which I love, and my clients love it too actually, because they get to see the pictures, and we all talk about travel. I have a travel planning group that loves to travel as well, so it’s very fun to chat about where we’ve all been.
Joe Fairless: What are some things that you’ve done from a marketing standpoint that have just fallen flat?
Tony Ray Baker: Postcards in the mail… [laughs] I paid Zillow $1,200 for leads for a year; that was a really big mess… I paid a magazine one time $12,000; it was $1,000/month to be in a magazine… That got zero leads.
Joe Fairless: Oh, my…
Tony Ray Baker: [laughs] All I did was all the other realtors were impressed that I was in the magazine, but that was about it.
Joe Fairless: Yup.
Tony Ray Baker: Yeah, for me it’s really back to basics. I don’t wanna work harder and make less money, so I’m really super-careful to watch those things… And I’ll try everything once. I don’t care about failing, I’ll try it. I have to prove it to myself just to know, but typically, my instincts are correct. When I see something, I’ll be like “I don’t know that that’s a winner, but I’ll give it one month, or six months, or a year, and we’ll see.” But usually I’m right on it.
And really, in today’s world, with the iBuyer and all these issues coming in our pathway with these big lawsuits and things going on, I’m thinking that the people that are gonna survive are gonna be the agents that are back to basics, and take care of their clients, and show their value, and why they have earned the right to be their consultant, and how much value they bring to the table when walking them through a transaction, probably one of the most expensive things they’re ever gonna do… And we are valuable, and we need to show that.
Joe Fairless: You mentioned earlier the very dynamic, engaging email campaign that you send out, that gets over 90% open rate… What software do you use to create that email?
Tony Ray Baker: This is a really cool toy, it’s called Homebot. If realtors are listening to this, they wanna call their lender, because it is a lender’s program. It has a way for the lender and the realtor (both of them) pay for this system, and then the realtor and the lender can either one see each other’s databases… And there’s a buyer’s portion and a seller’s portion. It’s a really, really cool toy.
Now, I have three really awesome loan offices I’ve worked with for 20-some years, so I didn’t wanna pair up with a loan officer, so I spoke to the managers over at Homebot and they did let me sign up and create the system just for me… So I pay for it just without a lender attachment. But it’s a really great program for a realtor and a lender to pair up on.
Joe Fairless: Very cool. Incredibly valuable, thank you for sharing that. And then from a CRM standpoint, what software do you use?
Tony Ray Baker: The business coach that I talked about is Joe Stumpf, with By Referral Only. The by Referral Only program offers a very sophisticated CRM that tracks everything you do with a client and actually shows you how that client has been in your business since the beginning. So I can actually click on a client and it tells me their down line. It tells me how many people they referred to me, every person that that person’s referred, and I can see the family tree, if you would, from each client. And then I can tell which one of my clients are raving fans, and who I need to make sure I’m paying more attention to… Because when you see that you have clients that have raised their hands and they wanna be around and constantly send their friends to you, those are absolutely the people you need to make sure you’re scheduling more time with… And it’s so easy to be busy and not remember to schedule time with folks… So I love the CRM for the fact that it reminds me to do that.
But the CRM itself has a massive amount of marketing already pre-done in it, and it all is centered around creating a referral business and taking care of your clients.
Joe Fairless: Based on your experience in the industry for 2,5 decades, what’s your best —
Tony Ray Baker: [laughs]
Joe Fairless: You said it — hey, it’s an accomplishment. It’s better than the alternative, right?
Tony Ray Baker: [laughs] Yeah.
Joe Fairless: [unintelligible [00:20:00].09] Well, one of my friends earlier posted on Facebook — he commented on one of my pictures, and he has a son that I used to babysit for, and he made some reference to how I’m getting older… And I said “Well, it’s better than the alternative, of not getting older… Because I’d much rather age than not.” And it is quite an accomplishment, being in this industry for 25 years. How about I say it that way?
Tony Ray Baker: Thank you… [laughter] Totally cool, ain’t it?
Joe Fairless: Based on your experience for a little while in the industry, what’s your best real estate investing advice ever?
Tony Ray Baker: For real estate investing?
Joe Fairless: Yeah. Or agents, either one. We’ve got a lot of agents on here.
Tony Ray Baker: You know, that’s one of the things – when I started in real estate, I kept thinking I was gonna get rich quick, and make a lot of money, obviously, because that’s what they sold at the school… And as I went through life, I had an identity theft that wiped out everything I owned. FBI involved, terrorism… It was a mess. I had to go off the grid for two years. I lost everything in the middle of my first ten years in real estate; I lost it all.
Interestingly enough, that taught me a great lesson, which was that you really need to be diversified, and investing for me now – we have made sure that we have investments in different areas… So if one is under attack, the other one is probably more stable.
And the one thing I know about real estate is no matter what, if the economy crashes, I have three houses right now that I know are still assets, that are brick and mortar, sitting on ground… And I can use those to live in, or I can use those to create income from rent… But having those properties just makes total sense, even if my stocks all go away. And buying property for a realtor is one of the easiest – and it should be one of the easiest – things there is, especially with programs like 203K renovations loans. I purchased all my properties on 203K’s. I bought them all under-priced, because the owner wanted the iBuyer effect. We went in and remodeled every one into the nines, and now the renters pay the mortgage on those, and we have assets sitting there that are being paid for and growing.
I think that’s super-important when it comes to expanding your portfolio and make sure you’re really looking as a realtor into — make sure you have other assets, other income besides just real estate… Because you can make 300k or 500k/year, but the reality is the market is gonna go up and down, and it’s really nice to have the peace of mind that something else is working for you behind the scenes.
Joe Fairless: Very true. So, so true. We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?
Tony Ray Baker: [laughs] Alright…
Joe Fairless: You’re ready. This isn’t anything that you can’t handle. First though, a quick word from our Best Ever partners.
Break: [00:22:57].11] to [00:23:56].00]
Joe Fairless: Alright, best ever book you’ve recently read?
Tony Ray Baker: Recently read… The Power of Now, by Eckhart Tolle.
Joe Fairless: What’s a mistake you’ve made on a transaction?
Tony Ray Baker: Taking the client when I knew I shouldn’t.
Joe Fairless: And what question(s) do you ask now to try to mitigate that from taking place again?
Tony Ray Baker: I read a book called Blink by Malcolm Gladwell, and I trust my instincts now. In my questioning, if I feel there’s a red flag, I will not take the client on it at all. I’ll refer them to another agent.
Joe Fairless: I still think of the divorce case study in the book Blink. Just phenomenal how they can determine if a couple is gonna be together or not within the next three years based on 10 seconds of interaction about a topic they don’t agree upon.
Tony Ray Baker: Oh my god, if everybody read Blink and just got it, what a beautiful world this would be… [laughs]
Joe Fairless: Amen, yup.
Tony Ray Baker: It would be real nice.
Joe Fairless: I agree. What’s the best ever way you like to give back? I’m on the board of directors for Pet Partners & Therapy Animals, and from every sale of every house we’re giving back to the Pet Partners program, plus I volunteer my time now to serve there… So charity for me – I just love anything to do with animals bringing love to people. I think it’s great.
Joe Fairless: And how can the Best Ever listeners learn more about you and what you’re doing?
Tony Ray Baker: Well, right now ironically I teach classes – and I have for 15 years – so I just put up a website called TonyRaysMarketingOnaDime.com, and I just put up 9 or 12 hour classes for free, so they could go back and watch every one of my marketing classes on back to basics, guerilla marketing, and they can watch them all for free. I’ll be adding another six hours coming up soon.
Joe Fairless: So is that tonyraysmarketingonadime.com?
Tony Ray Baker: Yeah, that’s it. You’ll see all kinds of classes in there. They’re about 15 minutes each, and I’ll just keep adding everything I have. I have four cameras on me now when I teach at the association, and we’re just planning on editing them and putting them in there for everybody.
Joe Fairless: Perfect. Alright, Tony Ray, thank you for being on the show, thank you for talking about your experience and the approach that you took with the help of your business coach at the time to “first design your life, then build your business around it”.
Tony Ray Baker: Yeah.
Joe Fairless: Tony Robbins talks about success fulfillment is the ultimate failure, and this certainly ties into that, where we could have success in the business, but then 40-50 years down the road we realize “Well, we didn’t actually live the life that we wanted, and what was it all about”, so I really appreciate you sharing that, as well as ways to stay in touch with your clients after you work with them on a transaction… And you gave a list of nine things that you do. Thanks for that; that will be helpful, regardless if we’re real estate agents or not.
I hope you have a best ever day, I really appreciate it, and we’ll talk to you soon.
Tony Ray Baker: Thanks for having me on the show, I appreciate it.