Business of Real Estate seminars! - Posted by Lonnie
Posted by Lonnie on June 23, 2003 at 03:15:02:
Ever heard of $5000 seminars or education
materials from self-claim gurus on real estate
and notes? Or the ones that contact you with a ‘salesmen’? No wonder its good business.
Say you, the boss, selling education material for
5k to each client and you give EACH salesmen the
3k/month and 10% commission on the sale closed
deals. (Each deal the client has to pay 5k, so
salesmen get 500 bucks per deal)
List of 40 people to call per month.
Consider the following scenario
BEST CASE: (HIGHLY unlikely)
ALL 40 clients signs up with credit cards.
Salesmen earn 23k/month [((405k)/10)=20k + 3k].
You grossly earn 200k/month (40clients5k).
Only 4/40 clients sign up (10%).
Salesmen earn 5k/month [(45k)/10)=2k + 3k].
You grossly earn 20k/month (4clients5k).
PROBABEL WORST CASE:
Only 1/40 clients sign up (2.5%)
Salesmen earns 3500/month [(1*5k)/10)=500 + 3k].
You grossly earn 5000/month.
Your fixed expenses:
business rent: 2000/month
business util: 500/month
your net profit per month PER salesmen
200,000 - (2500 + 23,000) = 174,500 per month
20,000 - (2500 + 5000) = 12,500 per month
PROBABLE WORST CASE;
5,000 - (2500 + 3500) = (-1,000) per month
BUT if you hire 5 salesmen. Your profit:
(200,0005)-(2500+(23,0005)) = 882,500 per mon
(20,0005)-(2500+(50005)) = 72,500 per month
PROBABLE WORST CASE:
(5,0005)-(2500+(35005)) = 5,000 per month
This all translate to per YEAR FOR YOU profit wise if you hire ONLY 5 salesmen to make calls for you
882,500 * 12 = $10,590,000 profits annually
72,500 * 12 = $870,000 profits annually
PROBABLE WORST CASE:
5000 * 12 = $60,000 profits annually (the salary of a programmer working for someone else)
So from this analysis, you can tell that selling
education material (whether they are scams or not) is SUCH A profitable business. Sure beats
working for someone else since even the worst
case is the salary of a college grad. Even if
the number of successful calls were 5 percent as oppose to the probable worst case of 2.5 percent,
you can since make a bundle. AND if you INCREASE
the number of salesmen, It is HIGHLY UNLIKELY
that you will have negative cash flow from this business…why? You can see from the example above
what happens when increasing from 1 salesman to just 5 salesmen for the worst probable case. (Do the math your self if you increase to 15 salesmen for the worst probable case. even 2% success rate will be very profitable for that)…the more you call, the highly of successful response like mail order. Plus there are still LOTSA suckers out there who buy these materials.
Only way they go out of business is ZERO or less than 2 or 1 percent success sign up rate.
No wonder even the TRUE ‘gurus’ who did deals
themselves eventually will switch to selling education materials than doing deals. Not to mention the ones that falsely claims they are gurus (by like doing one deal themselves and say I?m an expert.) So beware of gurus… like
stenfanchik and pmgmentors or anyone. Just 45 minutes of their worthless time ‘mentoring’ you OVER the phone per week is BIG bucks for them.
Just like the porn industry.
Wouldn’t you want to be in this high priced seminar educational material business also?
It sure beats flipping property or notes for 3 or 5k or each 10 or 20k per month, no?
Just my 2 cents to alert people of these high priced materials during bad economic times now.