How do you create value-add opportunities for your clients?
If you look up the definition of ‘value-add,’ it means either increasing value or increasing cash flow. The reason this is so obvious for any client is that they have a problem and you have a solution. If you can be the resource for them to tell them what to do and how to do it, they’ll come to you every single time. On my team, we regularly go through the processes of creating value for our clients.
One of these processes is looking for inefficiencies in the market. Sometimes a property will have a lot of square footage but not many bedrooms, or unfinished spaces in which more can be done. Let’s say you’re looking for the availability of a property that has unfinished space, like the one I’m standing in in today’s video. For this space, you may be able to finish off a similar basement that’s, say, $30 to $35 per square foot. At the same time, homes are selling for $135 to $250 per square foot. That margin is significant enough to create a value-add.
Some people might not know that a space like that would be $30 to $35 per square foot, so I’ll say this: Adding a theater system or something similarly over-the-top could add significant cost. What I’m talking about here is just making the best use of the property. If it’s a 2-bedroom/1-bath, you can create a 3-bedroom/2-bath with a living room to make it more marketable, attractive, and sellable. If the client then wants to move, they can either sell the home or keep it as a rental property and then move. At that point, you’ve potentially created cash flow for them.
Sometimes agents tell me in this type of situation that they’d rather just have their client sell. However, if they help their client move and create a situation where they own a rental property that produces crazy cash flow, not only will their client refer them to more people, but they may also end up buying more properties with the wealth they’re building. I started working with my very first client 15 years ago, and I’ve been able to do about that many transactions with them by keeping the mentality of adding value to their life.
If you want to bring more love to your clients or have them love you more, find opportunities for them. For example, I recently asked a client of mine who lost their job to send me their resume in case something came up that I could send their way. You’re not just an agent to your clients—you’re a friend who can get them the information they need. They have a problem, and you can be the solution.
If you have questions about today’s topic or would like an analysis of your business, let me know. I’d be happy to help you.
