Real Estate Mastery – Demographic Modeling

Demographic Focus as a core element in your Business Strategy

Preface - Sometimes I tend to be a bit prolific in my writing.  Hang with it - I think you'll find this information valuable.

Laser-focus allows one to maximize efficiencies within a business model.  What is a business model?  I'll cover that in another Blog.  For now, assuming you are in the Real Estate industry, I will just recommend that you read the book The Millionaire Real Estate Agent.

Previously, I used geography as an area in which to concentrate laser-focus.  There are many areas in which to focus for an efficient business. 

Concentrating on Demographics is critical for a well-focused Real Estate industry professional.  Let me give an example of demographic modeling in action.  As in almost any area, there are many "classes" of clientele.  There may be, for example, first-time home buyers, buyers for new construction homes, move-up buyers, investment property buyers, etc.  (Of course, I am a Home Mortgage Loan Specialist, so I'm partial to buyers.)  I have obviously not even mentioned the wide array of seller classes that abound, but you get the point. 

I live in a somewhat affluent area south of Denver, Colorado in the town of Castle Rock in Douglas County.  While there is some room for first-time home buyers and investors, it is more a community for mid to high end construction, move-up buyers and those who are affluent.  Given the variety of potential home buyers needing home mortgage loan financing, I have chosen to focus on the move-up and affluent market.  Since my community is also rapidly growing, I have also begun developing a level of expertise in new home construction. 

It is important to note that last point.  This is a little off the topic, but a good business model should be comprehensive, yet focused, keeping both the short as well as long term in mind.  While construction, for example, is not a centerpiece in my demographic, I am preparing myself as I expand my business model for those move-up and affluent clients over the next few years.  Another way in which I serve those clients is by developing my business expertise to include financial planning and estate planning, among other services.  To truly serve my demographic, I must not only be expert in their mortgage needs, but I must be fluent in a wide array of matters that are relevant to their overall financial needs, especially as that relates to anything real estate related. 

Douglas County is not necessarily a place for first-time homebuyers, but rather move-up and upscale real estate clientele.  This allows me even one other advantage. 

Let me ask - would you rather work with a buyer considering a $150,000 piece of real estate, or would you rather work with one who will purchase a $400,000 home?  No-brainer, right?  My business model falls right into the "work smart, not hard" mindset.  Actually, I work smart AND hard, so instead of being happy serving ten clients a month and doing home mortgage loans totaling $1.5MM, I may work with seven buyers and do $2.8MM in real estate loans.  By the way, the three fewer clients is not due to laziness; it allows me to provide a higher level of professional service to those with whom I do work.  High service is one of the requirements of those in my chosen demographic.

What I'm driving at here is that there are segments within segments within segments to target in order to attain a solid business efficiency; eg: a particular demographic concentration within a specific, defined geographic area.  And, not only does this result in a niche, but upon doing this, one becomes more and more knowledgeable about that niche and, as a result, an expert or trusted advisor.  In my market, I will challenge almost any other person who does mortgage loans to know as much about clients in the move-up/affluent demographic as I do.  And I'll get more into that aspect of laser-focus in my next blog.

Real Estate Mastery covers many facets.  Demographic focus is of vital importance.

Greg Polashock is a Real Estate Home Mortgage Loan Consultant and Certified Mortgage Planning Specialist with Cherry Creek Mortgage and resides in Castle Rock, Colorado.  He can be reached via email at Greg@GregIsFinancingSolutions.com, by phone at 303-887-0672 or on the web at http://www.gregisfinancingsolutions.com/.