Memo From Frank
Thanksgiving is not a big time of year for billboard sales. Nobody puts a vinyl up of a giant turkey. McDonald’s – the #1 billboard advertiser in America – does not even serve turkey. But it is the appropriate time of year to give thanks for all of our blessings. Whether those blessings are financial, or your health, or your family, or other accomplishments, this is the time of year to say “thank you”. And we would like to take this opportunity to say “thank you” to each and every person that reads this newsletter and shares in the complete narrative on the billboard industry.
Have a Happy Thanksgiving!
Tips On First Meeting The Landowner On His Property
So you phoned the owner of the land about installing a billboard on it, and they’re interested. You have an appointment set up to meet them at the property. What are some tips on making that meeting a success?
What to wear
The first rule of meeting a property owner is to dress conservatively. You’re asking this person to give you about a 30 year lease on their property and what they want to believe is that you will follow the terms of the lease and pay them. A flowered shirt and shorts may be appropriate in Las Vegas, but not when meeting the landowner. I have always gone to such meetings in suit pants and wingtips and with a long-sleeved shirt with the sleeves rolled up. That’s kind of the look that says “you can trust me”.
What to pull up in
While an American pick-up truck or car is best, the important factor is having a magnetic sign made with your “shield” (company name) on it. Before you pull into their property, get out and put the magnetic sign (which you keep in the trunk) on both the driver’s and passenger doors. Only big companies put their name on the doors of the car and it will give you immediate credibility.
What to say
Cut out all small talk. Everything you say has the potential to turn off the seller, so say as little as possible. In addition, small talk may lead to the question “tell me about your company” and if you just started up that’s not the question you want. Instead, when you approach the owner, say “let me show you where the sign will go” and start talking immediately about the sign and lease and the money they will receive.
What to have with you
Have the lease with you because 50% of the time they will sign it at the end of the meeting. Bring it in a manila envelope that you carry with your legal pad to take any notes. Don’t pull it out until the opportunity presents itself. You can say something like “so are you ready to get this process started?”. If they say “I need to show your lease to my lawyer” then hand them the envelope with the lease in it (and with your business card attached”.
There is an art form to meeting with the property owner. It’s really just common sense. Follow these tips and you’ll do fine.
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Why The Time To Buy Something Is When Nobody Cares
This is a Ferrari California. It’s about a $4 million car. But there was a time in which you could buy one for around $10,000. The key to buying or building assets is to strike when nobody much cares and values are extremely low, and then let the market and values increase over time. So how do you do this with billboard signs?
Look at future highway projects
Most cities, counties and states produce booklets that show where all future roads are going. This is invaluable information to plan growth yet most people don’t know it exists. When you draw these future roads on a map, you will immediately see the growth patterns. And these projects are 100% accurate as they only show roads that are already in the right-of-way purchase stage or under construction. It even shows proposed completion dates.
Where’s the Walmart?
Walmart has the greatest market diligence team in the U.S. They are able to plan out years ahead of time where the population is going, and build their stores ahead of that growth. They even buy up the surrounding land and sell it to developers trying to harness that growth. Wherever there is a Walmart is a nudge that you’re in the direction of growth.
Decide on which direction the town is expanding
Using the above data, plus housing costs on Zillow and other information, you can pretty easily map out what direction the city is heading in. Just about every city in the U.S. grows in only two directions. In Dallas, it’s north and east. In St. Louis it’s south and west. Figure out what direction your city is growing in.
Bet on your hunches
Once you’ve decided on the future direction, it’s time to put your money where your mouth is. Look for opportunities to buy abandoned signs or build new inexpensive signs beyond the current city boundaries and in the direction of the growth. Since the area is not hot yet you can get really cheap deals on signs and land rents.
You can do some really great deals if you are ahead of growth and development. You can buy things or build things for a penny on the dollar. Those opportunities end as soon as the growth gets there.
How To Successfully Do A “Combo” Ad
Sometimes the most successful form of advertising is to have not one advertiser on that face of the sign, but two (or even more). This is called “combo” advertising, and it can create super-effective ads that pay for themselves monthly and lead to endless renewals. So how does it work?
Common goal with half the cost
The true power of combo ads is the value they represent to the advertiser. By splitting the sign, they only pay 50% of the normal cost. That makes the $1,000 ad only $500, and that increases your odds of closing the deal by 1,000%. All you need are two businesses that share the same desire: to put up a billboard to have their business revenue increase. It’s not rocket science.
To work, the two advertisers must not be adversaries – they must be compatible. The best combos are a hotel and restaurant, or a hotel and a gas station, or a restaurant and a gas station. They perfectly co-exist because any motorist who does one activity might do the other, too. But you would not want to put on a sign a restaurant and funeral home, or a car dealer and an accident attorney.
The best combo ads share a common exit. That helps enormously in the ad design as you don’t have to put up two separate exit lines. That’s not saying you can’t pull off a combo where they businesses are not at the same exit, but your renewal rate will be higher if they are, and renewal is the bread-and-butter of good business.
Combo ads allow for inexpensive – yet highly effective – billboard opportunities. You should seek out such situations as they have enormously high rates of renewal and satisfaction.
This Is What Financial Freedom Looks Like
We live in scary times. The economy changes constantly, and what seemed like sure things are suddenly bankrupt or shrinking. The same can be true of your employer. So how do you attain financial security in a crazy world? Billboards can be an option for you.
Easy to manage equals no conflict with your day job
Billboards require some of the lowest management requirements of any U.S. business model. The sign has no moving parts, and you can inspect in once every few months to make sure the light bulbs are working. You only rent the ad space annually or twice-annually. Nothing you ever do can’t be done on a weekend. No interference with your day job at all.
Low cost of entry
You can buy some signs for under $1,000 and build some signs for under $3,000. There’s no other form of real estate that you can get into for amounts this low. That being said, there are steel monopole billboards that cost $100,000, so you have to be a good shopper and know what you’re doing.
This is one of the big forces of billboards – you have the ability to add more signs onto your portfolio easily because the management requirement is so low. I have personally rented over 300 billboards per year before, thanks to 80% renewal rates and working smart. If a single billboard makes $3,000 per year – and you own 30 of them – that’s $90,000 per year in your pocket.
High return levels
Billboards have investment return levels of $3,000 to $10,000 per year and those rates of return are certainly the highest of any form of real estate. You can take a portfolio of just three signs and the cash flow can build you an empire of billboards in less than ten years. A single billboard can beat the yield on a bank CD by ten to fifty times.
Track record of success
Many American fortunes have been made from billboards, including Ted Turner, John Kluge, and Artie Moreno (who all made $1 billion in them). But thousands of other people have made significant wealth with them, and they are a great way to create an additional stream of income.
If you worry about money all the time – or just feel concerned about having a positive cash flow each month – then consider billboards as an alternative to this worry. They’ve been producing income for over 100 years.