Um, hey, when I walked my dog this morning, it was 33 degrees outside. So it's cold. It's cold like 70 or is that like 65 for you? 60 60 here? probably put the park on I Get it, that's 33? Fahrenheit Correct, Yes, Yes. Okay, all right hey, welcome back to the podcast.

If you are the kind of person that sells second homes or wants to generate more online leads and dominate search, if you're working new construction or if you just want to build a really big business, you're going to love today's podcast my guest Nick Fong Ronn Val Real Estate really the second home expert in all of Mexico number one transaction business in the Baja Nick Welcome to the show man hey Tom how are you I am really really good my friend I'm really good. So Nick for the people that haven't uh gotten to know you, you know you have an interesting background. Before we get into all the sausage making and the Brilliance of your business, can you take just a second and sort of describe how you got to to the Baja where you were raised. A little bit about your background yeah I'm originally from Chicago and born and raised I Went to the University of Illinois in Champagne Orbana got my degree in real estate Finance but right out of college didn't actually apply myself.

uh I Went to Uh IT Consulting for five years and I got fired from my job after five years and in the exit interview my managers at the time told me you know what Nick we think you're better at sales and so there started my journey I went into real estate, got my licens, started my own real estate company in Chicago um did that for a couple years and uh, 2001. So over 22 almost 23 years ago I went on spring break to Kabo San Lucas with a bunch of friends who were doing their spring break because they were finishing their MBA and I didn't even know where Cabo San Lucas was I had to look it up on a map I thought it was somewhere near Cancun but it it wasn't It was at the southern tip of the Baja Peninsula and so uh, 22 to almost 233 years later I'm now um, happily married two kids and running a big operation in the B. so I love So first of all let's go back to you got fired. you got fired as an IT consultant they said you should go into sales.

What was it like being fired? it was I was I was very comfortable. um and that was a big problem I collected a paycheck every two weeks I was making good good money but I didn't know Tech at least two and I started my own company, got my license and it the rest is history I also got into real estate mortgages I was writing mortgages and also doing uh, the real estate brokering. Um and in my first year I was making more money as a real estate agent SL mortgage loan officer than I ever did as it consultant. So what was the transition like for you though? you? you moved because you know I was I've been going to Mexico since I was you know, 13 or 14? Uh, down to like Rosarita Beach Where my older brother and his you know, his girl girlfriend's you know, family had a house and traveling down there at that time I Mean you didn't speak the language, you met a girl and you started a real estate company? I Mean that? that's pretty extreme Nick A lot of people would hear that and think you know, how did he do all that Like you didn't speak the language, you didn't know the marketplace and you started a real estate company and a mortgage company.

Help us help us understand your psychology. I Started by buying my first house. so Rio and I bought a house and it was the house that we moved into. It was her dog, her cat, and my mother-in-law my future mother-in-law We weren't married yet and so I I started investing in real estate.

so I started buying land and I started evaluating the real estate market like any real estate investor would because I was still running my real estate business in Chicago while I was living in 2004. December through the spring of 2005 in Cabo so I was managing that from AAR and I was investing in real estate. and then I realized before actually proposing to Roso that wait, I think I could do this here because I've learned the market. There's a lot of opportunity.

a lot of um, old ways of selling real estate of by real estate companies. So I'm going to, actually, um, work with a brokerage here to learn the nuances and the differences. So I worked for a couple years for a real estate broker that was big here in Kabo San Lucas and after a few years, I decided you know what I could do this better myself and I set up a company Rosio and I and that was Rol Real Estate back in 2010. So 2010.

So so just for the listener to have context: what does the business look like today? How many offices? How many agents? You're the number one transaction? Brokerage in all of the Baja So give us context for like, what does that look like Yeah, so right now we have eight offices and we're building out our ninth and 10th office. Currently, we occupy the whole state of Basur. We are located in all the key locations, We have 92 agents and we're on boarding another six to eight agents currently. For sure we'll be over a 100 real estate agents licensed in our company by the end of 2023.

And in terms of the different departments, we have all the Departments that you would need for a company to scale and to be the size that we are. We have a Media Department We have a marketing department, a call center Property Management project management where they do home builds, remodels, and a whole vacation rental slers department. So it's so when you say all the things that a real estate brokerage needs to scale and the first thing you say is a media Department right? Most of those companies don't have a media department, they certainly have marketing. they've got project they maybe they have Property Management So so you've also become sort of extremely well known as this second home Community expert right? What percentage of the the greater Baja Market is a second home Community versus full-time Community Okay, um, we're very for in the Baja to have an MLS system.

Very few areas in Mexico have an MLs so we can really track that very closely. according to our MLS the second home real estate market just in Los Cabos So Cabo San Lucas and San Jose del Cabo were probably 75 to 80% of the properties are second homes. Wow, that's significant. that's really.

and has it always been like that? Yes. So for our MLS properties nonlocal like U Mexican Nationals living um in Los Cabos it has actually been higher than that. So I would say when I first got started over a decade and a half ago, I was 100% Mexican Nationals Were um, not my clients. 100% of my clients were Americans and Canadians.

So now we're about 75 25. so we are working with a lot of Mexican Nationals but they're still the minority. Got it? Got it? So it's interesting you. you get there.

you learn the business, you learn the language, you know you, you do some deals and then you start a brokerage. So did did you ever feel like quitting? Did you ever think to yourself I'm not sure if this is going to work out. maybe maybe see maybe we should go back to Chicago Grab your mother, grab the dog, grab the cat, let's get out of here. you know I I Never did I never did.

The closest I would say I got to it was in 2020 when the pandemic hit. Yeah, because at that point we had already, uh, decided to scale maybe two years prior. So we started taking on a lot of overhead, a lot of uh, financial and Personnel responsibilities, and that there was a time where you know I'm really putting pen to paper and trying to figure out okay, if we don't sell another house, how long can we last? Yeah, that kind of conversation. but besides that, no, we've been very fortunate.

Um, our real estate market in the Baja um follows the US market. Typically it Trails about 6 to 12 months, but in the last few years it's been following like neck and neck. So when the real estate market dips in the US it also dips for us. Got it? Got it? So I Want to just take a second and just unpack? so? Media: Department uh, you know, outbound telemarketing? Department I Know we're going to talk about online lead generation and the significance of that.

Um, but I'd love for you to just unpack. What does the media Department look like today? and do you recommend that for other large teams or brokerages or individuals for large teams? Yes, 100% Um I think when you have enough transactions enough Uh Revenue coming in, it's much more affordable and you're actually going to be able to put out more content. better content control. um, the schedules of the the photographers, the videographers, and the whole editing process.

So our department right now is four people full-time They um, have their own media office which duel as our podcast. Studio That's something that we recently did in the last, uh, four to five months. it was. um, we just do a lot of content.

We um, list the most amount of properties in our Marketplace We'll list and sell four to 500 listings a year and so they're out there doing the virtual tours, the professional photos um, and feature video listings, the podcast editing everything, and it's um, it's very intense in terms of the media, but that's the way everything is. It's content content content, right? right? So I think when when people heard that they were thinking of you know content for you know advertising or content for social and branding But from what I understand and correct me if I'm wrong is is you're listing so many houses, you're doing so many transactions that what percentage of all of your content is just product? Very good. I would say it's over half over half of the um, stuff that the media Department doing is the actual listings properties that we're handling I Mean we definitely, uh, Focus heavily on the agents and the staff and our clients and the lifestyle. Yeah, but I would say it's maybe 40% of what we're um, creating Got it? So I want to talk about your your telemarketing group? So how many people do you have in that Isa Osa role and I know this is going to devil nicely.

CU We want to talk about online lead generation and search where you just dominate. There's going to be a lot of lessons, uh, for the listener to just unpack there so so help us understand how many people do you have in that Division and what are they doing every day? Yeah, right now we have a manager and four isas. so four Insight sales agents that are um, N9 to5, uh, six days a week and on Sundays we always have a floater. so someone that is covering.

So so that's all inbound phone calls, emails, text messages. but then also we I would the majority of our um Isa call center activity is outbound, not inbound. So we generate a ton of leads every month. Uh, well over 2,000 per month.

And so their job is just filtering through, contacting, having conversations. Um, nurturing the clients to the point where one of our 100 sales agents will get assigned those leads and we're assigning anywhere between 1 to 200 leads per month to our sales agents. So let's let's talk about uh, the math. So if you're generating a couple thousand leads per month, and in this year, how many transactions will you do? 600 700.

So this year already to date, we have over 600 transactions pending and closed and just under 300 million. Okay, so just under 300 million, 600 plus transactions. So on 2,000 leads, let's call it so. 20,000 24,000 leads, 600 transactions.

Um I Guess the the obvious question that I want to ask is, how are you generating all these leads? Let's talk about search and online advertising and then we'll get into sort of the the sort of non-traditional model that you built around. All this. this so help us understand, how did you get started with it? How did you get to that number and how much of that now is search versus say Google and paid advertising? Interrupting my own show with a quick little announcement. If you're like me and you recognize this is the time of the year when we've got to make decisions, we got to look back at what's worked in the past and decide what we want to have happen in 2024.

Then yes, it is time for you to get your plan together. Now if you're one of my coaching clients, you know you just go inside a loom. You download the 2024 plan. You and your coach work on that together.

If you're not one of my clients, go to Tomferry.com There's be a link below. Download and copy the plan, get to work on it. Use chat GPT and other resources to answer the tough questions about the strategies you need to implement to ensure your success in 2024. So Tomferry.com get your business plan and let's get to work.

Now let's go back to the show. Yep, Okay, so we're very heavy on paid advertising. So the normal um Google Yahoo beinging type of search traffic we I mean we spend a lot of money. Tens of thousands of dollars every month for lead generation and but it's worth it to us.

We have a lot of Agents We have the call center, We have the infrastructure and the years of knowledge to be able to um to take advantage of that investment Every month. Um, we make tens of thousands of phone calls Every month we send a quar million 300,000 emails every month to our database. We are um, sending maybe 5 to 10,000 text messages every month to our database. We we're it's A it's a very heavy, intense contact business for us.

and it it doesn't stop with our call center. So we have a whole uh Ronal University a learning plat platform where new agents and even experienced Agents come into the company and they're learning the Ron Valway. So how we do it? How we embrace the technology? What are the different departments? Where are the differences in advantages we have? Um, as a company and all of our agents? Uh, compared to the rest of the market? So you're very much getting into the model? Um, which I want to unpack as well, but I want to stick to So 300,00 ,000 emails a month? 5 to 10,000 text messages a month? How many? you know? Probably tens of thousands, if not more outbound phone calls every single month, following up on old leads, obviously contacting the existing leads. but at 24,000 leads, 600 sides? Let's just figure out the math on that.

I should I should know that, right? 24,000 So is that like 2% conversion? Am I Reading that correctly? Yeah, it's it's less. I would say it's probably one, or possibly a little bit less than 1% conversion because we're a second home real estate market. The big difference that I've seen compared to other big teams that are selling in the States In a traditional normal permanent resident, full-time resident Market is you don't need to buy it. It's uh, it's not a need, it's a want, it's a desire.

And because of that, if we don't sell a property when the client is actually in town, it waits till next year. Yeah, and they'll continue looking online receiving emails. but it's not a a need and therefore the conversion is much less. Which makes it even more important to nurture and keep in touch with the clients, right? So so you saw a study we released um, late last year and a lot this year.

Where in the US and Canada as an example, it's about 115 days from the time of lead is generated to the time it's put into escrow, right? The the sale is made, not closed. So 115 days probably feels like a lot to most people. And then you saw the same study we did with Boomtown that showed it was like 8% converted in the first 30 days and it was like up to I. Want to say uh, I don't want to I don't want to misquote the number? let's call it like sub.

40% bought in the first 90 days, but the vast majority all bought. You know, 120? 180 Etc I would imagine in your Marketplace it's got to be dramatically different. What? What is the typical time from lead generated to sale made? This is the sad part for our agents and the whole market. and I don't It's not just Cabo, it's not just the Baja, it's every second Home Market that I see in Mexico is it's over a year.

So of the closed deals, the average time from registration in our system to actually putting a deal under contract is over a year and then our average closing is 60 to 90 days. So wow, new agents! It's extremely challenging that first that first year to to make a living and so um, kind of going back to what we were talking about. Seeing that issue, that challenge. We created a program in our Isa call center so we've had a handful of agents that had little to no EXP experience.

Be in an Isa They earn a salary. Yeah, for 6 to 12 months they learn the system, they know how to make conversations, they know how to nurture, and all the while in their off hours they're going to open houses, they're doing uh, tours, shadowing an experienced agent, and it dovetails very nicely into the transition to be an agent. What I love about that is it's a career path, right? It's a career path and I Know not every agent does that because you got experienced agents that join you from other brokerages or people that move from the US and Canada and decide to come to work with you. Um, but I like that career pathing strategy for new agents.

Let let's go back to the online lead generation for a second. So you're spending, you know, tens of thousands of dollars a month on lead generation and some people are going to hear man for like 1% conversion. Like does it, does it add up like what? what will the gross revenue of the company be this year and and what's profitability look like so people have content next? Yeah, I mean we're well over $10 million in revenue on an annual basis and we we're profitable. So we're um, we're definitely in a in a growth um, uh, mode right now in the past few years because we're continually growing.

In fact, I'm recording right now I'm in San Miguel de ending. so I'm in Mainland Mexico Yeah, um, a big part of our business is working with developments and developers and and we're expanding. But with all being said, we're still very profitable. Um, it's very fortunate.

Very, very fortunate. Yes. All right. I I Appreciate that answer I Appreciate that answer.

All right. So I want to talk about new construction and for the person listening right now that has had the desire to, you know, work with Builders to work with developers? Um, maybe help us understand If you were going to start over today without the success and the track record that you you have, what advice would you give to someone that wanted to go after Builders and developers to earn that business? Um, if I were to start all over, it would be teaming up with a company, a brokerage that had, um, the infrastructure like Ronal Real Estate, and the experience. Because if I were to rewind 15 years ago, I would be extremely intimidated I wouldn't have the knowledge to be able to, um, give the confidence to a developer um, that we could properly represent and also advise them. So I I See it from uh, my own agents.

They're out there. They're making the relationships, they're making the contacts. Maybe they don't have real estate experience, but they're Introducing Me and the company to developers and we have the track record to be able to back it up and to have the meaningful conversations with the developers. To the point point where they're um, they're engaging us and we're representing their whole project.

So it's interesting because I work so much with Douglas Elman You know in the very early days in New York City and now across the across the country and so many other brokerages that specialize in this, the smart agents would always do the same thing. get the in-house development team involved, but somehow you have to make that connection with the builder. Have you found that there is a better approach if you were going after a builder that you wanted today? Even you know with your track record that is captivating to them that causes them to listen even if they have their own inhouse sales team. But you saw sales being sluggish.

What's your approach to to engage that developer that builder for me? Um, the experience in the second home real estate market catering to the American and Canadian buyer is a niche that is extremely valuable to the Mexican developer. Yeah, because the Mexican developer typically is not from Cabo they're coming from Mainland Mexico Mexico City W Laara Monteray and they're used to building and selling with their own sales team inhouse. But to Mexican Nationals uh, Mexican peso based. All of our real estate in the Baja is US dollar based and as I mentioned, 75 80% of the inventory sold to the foreign market.

It's very different and so the developers that understand that they don't know that and it's a big mistake to try to enter into that. That's where our Niche is. So what I need to be able to convey to the developers is that it's a different Market even though me as a foreigner now a Mexican national um, but I'm born a foreigner um I'm in Mexico teaching them the Mexican developer how to sell real estate in Mexico The big difference is the buyer. the consumer is not who they're used to dealing with.

It's interesting. Uh, you know a mentor of mine who I've mentioned you before Mike Vance would always talk about in every business you're looking for. What are your unique factors? What is the thing that you have that if people want it, they've got to come to you. And when I think about what you and Rosio have built, it's you've got this massive marketing machine that is generating buyers And sellers from all over the US and Canada you're able to then take that and almost like a force, put it towards a new development project and sell it faster, sell it more efficiently so that really is your unique.

Factor Yes, yes and four years ago I realized that this was going to be a forever growing Trend in the Baja that we set up a development department in the company. So we have um, five or six people in that department from marketing to content creation managers, assistant manager, coordinators, and transaction coordinators in that department because it's a different animal. yes and there special attention that needs to be given to those projects. I would say 40% of our listing inventory or more is developments and is that is that typical for the market or is that just your model? Uh, so it's it's not typical.

Um I would say only a handful of brokerages do what we do. Um, but I you know 60 to 70% of the inventory is new construction. It's just that a small 10un development is going to be represented by a mom and pop brokerage or the developers can try to sell it themselves. but they don't have the really the infrastructure to be able to um sell at scale.

So we represent anywhere from 200 unit projects to as little as 50 unit projects 100 to $200 million projects. Got it? Got it? So you know Nick you and I've had I don't even know how many conversations. this could be the most serious I've ever seen you I was just sit here just like like you know this is this loving guy who for for the person listening if you were with me at the virtual Summit in I think it was like October of 2020 Nick did a talk called making your phone calls and if you remember Nick you know you're you're walking through CBA you're like you can make phone calls in a pool, you can make phone calls on the beach, you can make phone calls while drinking a Corona and it was one of like the highlights of the entire Summit because I think that's where your personality really showed up. but I do appreciate your serious nature as we talk about this incredible business that you guys are building um for for my friend that's listening if you so Nick if somebody wanted to visit you guys in the Baja like how do they reach out to you it's really easy.

Ral.com is our website. we're all over social media and when you actually land in the airport you'll see our big billboard at Bage Claim. I've seen it many times. yes um we do.

and it's not just you know, marketing, the for lead generation and for clients but we do a lot for our local communities with all of our offices. In fact in two days we're going to be doing actually tomorrow we're doing a big charity event in one of our offices in Los Bares in the East Cape. Um and 14 local charities will come. We're going to be sponsoring it and giving thousands of dollars to the local charities.

this is you know, really important for us for our individual agents to be able to serve the community. Um yeah, I'm a little bit more serious today. I I Think it's um, uh, I think it's important for the the newer agents and also experienced agents or brokerages that follow you to know that there's a whole new world of second home real estate? Yes, and it's a great way to Um in this in the changing Market To um, expand your your Um experience, your uh, knowledge and look into um, the second home real estate market because a number of our agents on our team also sell in San Diego um in Canada and they get their license here just to be able to sell across the border like what I did nearly 20 years ago? Sure, we certainly saw and everyone listening you know knows the sort of the CRA czy migration that happened during the pandemic. If it was on a beach near a lake, near a golf course on a mountain that real estate exp, there was one or two insights you wanted to share just in your experience, reflecting back mistakes to avoid things to.

Aspire to what? what? what? last bit of advice would you share for our listeners? Um, think bigger for me? Um, even though we're the biggest Brokerage in the State uh I could have um, been given the advice early on. If I was given to think bigger, it was really in The Last 5 Years years almost six years that we've grown to the level um, the scale that we have and it was your coaching has been integral in that. It all started with deciding. You know, I'm successful as a agent with just four agents on my team.

but what could I be doing bigger and thinking bigger? surrounding myself around people that think bigger that do bigger things and um I I can I can remember back in 2018 being at the first Elite Retreat yeah and I was so intimidated being around 1500 2,000 top agents um in the world and I went back to my hotel room and just thought boy, I'm I'm like nothing I'm nothing and at that time I think I might have sold $50 million of real estate and I just felt like I'm nothing and um but sitting down with my coach at the time really putting pen to paper and thinking big I was able in three years from that time to achieve a number in the company in terms of Revenue transactions that I thought was completely unattainable. Um, and from here it's just going to go bigger and bigger. So my biggest advice is it can always be bigger than what you're currently thinking and get people around you to um to challenge you to think that big because when I was a single agent or just had a couple agents on my team, I was still one of the biggest Um companies in Los Cabos But the reason why I um wouldn't have grown as much without your leadership with the coaching system is um I wasn't exposed to bigger thinkers and so that I'm extremely thankful for extremely I was is really thinking it's that word exposure and and Nick you did that for the person listening today getting them exposed to thinking big and what's possible. So with that said, I look forward to hearing about your business plan which I know we have a coaching session coming up this week.

so Nick thank you so much for being on the show. It's about time. Uh, for my friends out there you know. follow Nick on Social Ronal Real Estate Nick Fong if you get him on Instagram and absolutely go visit this guy if you're down in Cabo he is He and his wife.

They are fantastic! Thank you thank you so much my friend. We will see you soon and for my friend out there watching, make sure you share this with a friend, leave a comment if you would and we'll see you guys on the next podcast. Take care.