How to Select a Geographic Farm
How to Select a Geographic Farm
I meet with agents all the time and one of the most common questions that I hear is how do I select a geographic farm.
Number 1: How Many Homes
The first thing that we want to look for when selecting a farm is the total number of homes in that particular subdivision or neighborhood. And ideally we want to be at 500 homes. Anything less than that really isn’t going to be worth your time or your money because there's not enough homes that create enough turnover which leads me into my next point.
Number 2: Turnover Rate
What's the amount of turnover that we should be looking for? And really we want about 6 percent. So if we're going you know back to our five hundred home example for our farm that means 30 homes should be selling in that neighborhood per year. Year over year that's going to create enough transactions to where you're getting enough revenue or enough potential sales coming in to make your investment worth it.
Number 3: Market Share
And the last thing that we want to look for is is there an agent that's doing 10 percent or more market share in that subdivision. If there is they're probably already farming that neighborhood or maybe they've done it through open houses or another lead source. But you know those signs are gonna be all over the place and we don't want to try to go into somewhere where there's already a dominant agent established.
The next thing I want to talk about when selecting your farm is budget. So there's really two ways that we can approach our farm. And the first one is gonna be sweat equity and the second is gonna be check equity.
So with sweat equity you know it's gonna be you know knocking on doors. You know frequently handing out you know you're doing door drops maybe it's a flyer maybe it's an invite to an open house. Maybe it's a gift it could be you know whatever it is but you're gonna be putting in the physical work to actually become an established agent in that farm.
Now with check equity it's going to be just like it sounds. Writing a check every month. Maybe outsourcing it to a company who does mailers for you. Maybe it's Facebook or Instagram ads but you just write the check every month and then they do the work for you and then you just follow up on those leads.
The last thing that I want to talk about is frequency. So whether that's you know check equity or sweat equity just like we just talked about you know we didn't talk about how frequent do I need to be doing mailers. If you're doing check equity or door drops if you don't sweat equity and ideally we want to be you know if it's a new farm it's going to be three times in the first three months you've got nine total pieces and three months. And then after that we want to do twice a month until you decide either you don't want to be in this farm anymore or that you know you've died and you're no longer in real estate or you've retired whatever it is we want to make sure that we're consistent you know like I said biweekly after those first three months. That way people are constantly seeing us constantly seeing us constantly seeing us. So then when it's time to list their home you're the person that they think of.
So as I mentioned at the beginning of the video I've coached agents on how to select this geographic farm but not all of them are fresh on starting a new farm. Some of them have just failed at their farms and they haven't stuck with it long enough. And that's a huge important piece to understand is that geographic farming is a long term play. That's why it's called geographic farming. You know if we're gonna be in it for possibly 12 to 18 months before you're going to see return if you're being consistent now if you're being inconsistent it may take longer or you may not get any return at all.
So my hope for you is that you will you know do the math study the numbers where's the turnover where the total number of homes and then select the right neighborhood for you based on those stats. And then most importantly be consistent and stick to it.