The Laziest Passive Income Business That Runs Itself

0:00The only time it becomes like maybe an hour or two a day of work is when you scale up to a point where I'm at where I have like over a hundred clients. I know I do really well and I make around 35k a month. And it might be sound impressive to some people and it is I guess kind of

0:15impressive. Is that profit? That's pretty much the overhead is like so low. It's our company does around $100,000 a month as a whole and our overhead's maybe less than $5,000 a month. Kyle, tell me what a website landlord is. So essentially a website landlord is people who own pieces of internet real estate. And it's not domain flipping or anything like that. It's you're basically building a website for a certain niche in a certain city and then renting out that lead flow that comes through it to an actual local business owner. So let me give you an example. If I were to build a website right now for

0:52junk removal services in Austin, Texas. I don't own a junk removal company. I don't have a client that has a junk removal company. Anybody can build whatever website they want, you know. So, I go out and build this website that's all about junk removal services in Austin, Texas. I do what's called SEO on the website to get it ranking. I get that website ranking to page one. And once it's on page one of Google so that it shows up anytime somebody searches for junk removal services in Austin, Texas, obviously people are going to be clicking on it. Obviously, there are hundreds if not thousands of people in

1:25Austin, Texas every day going to Google to try and find a junk removal company. So, if my website is one of those sites on page one, I'm going to get a percentage of those people searching. And once they come to my site, they're going to see the little phone number that's on my website, right? It's called a tracking phone number. I can control where all those calls flows to. It's my like dummy number. So when people call that phone number, it automatically forwards to a business owner I've partnered up with, right? But to backtrack just a hair, before I even have a business owner hooked up to them,

1:57I'm getting the site to page one. It's getting calls at first. I'm just letting all those calls go to voicemail before I have a client working with me. It's no big deal. Let them go to voicemail. There will be more callers next month. There's never ending. And you're capturing their info. they're not like as likely to convert, you know, if you find a guy to buy your leads and he calls them later, but at least you still have the data and it's proof of concept. So, you can say, "Hey, Bob, I get three calls a day for people searching for exactly what you're

2:23selling." Exactly. Exactly. Well, the best part about this is that the overhead is so low in this business model. Like if you're using the most expensive tools or like the most drag and drop userfriendly tools, you're spending no more than like $25 a month in total overhead per site. That's for the hosting, the URL, and the phone number, right? So, the benefit of that is that once I do have a website that's getting like 50 to 100 calls or so a month, I'm calling up that junk removal company in Austin, Texas, and

2:54I'm like, "Hey, man. I got this website. It's getting like 50 calls a month of people looking for junk removal services in Austin. I connect them to you for a week for free and I'm not going to take a credit card information from you. I'm not going to um make you sign anything. It's literally just a free trial. And sometimes it sounds too good to be true to them and they're just like, "It sounds suspicious." But usually they're like, "Well, whatever. All you need is my email and phone number." So you give them the free trial and you just want them to start trusting

3:21you and to see that your leads are good. So then they'll want to pay for that. Right. Exactly. So, I give them the free trial and by the end of that week, if they've made some money off my calls, that next conversation I have with them is really just about what monthly flat fee we

3:35negotiate. Can I pause you because I feel like that's the that's a big key of this is if they're making any money on on my calls. How do you know that they're reporting accurately, that they're not lying, that they're following up with the leads, that they're actually answering the phone, etc., or is does there just have to be a good bit of trust involved? Well, I could see if

3:55they're answering the calls or not. Sometimes in the call tracking platform, I could see the recordings and stuff, but the thing is is if they are didn't make any money off of it, then they're probably not going to be a good client for me anyways. So, I'm just going to move on to the next person because if they're not making money off of it, why

4:12would they pay me, right? Sure. And if they are making money off of it, they're not going to want me to turn the calls off. So, the incentives are aligned. Exactly. So, can you see the the recordings or the call transcripts as well? Yes. So, if they're like, "Sorry, yeah, I got a few calls but didn't go anywhere and then you look at the transcript and it's

4:30like, all right, $700 invoice sent." You're like, "Hey, bro." Yes. But you're saying that doesn't even happen that often because they see that the calls are good and now it's just a matter of not will you pay me, but how much will you pay me? Yeah. It we come up with a flat fee and I don't do any contracts with them. I'm just like, you know what? cancel anytime because I have the leverage because I'm sending them the calls and if they cancel the calls go away. So they're basically if they cancel they're agreeing to lose a big portion of their income, right? So they could cancel

4:58whenever they want, right? So they have that exit. So it's a pretty easy conversation. They saw the calls, they trust me versus a standard marketing company who does like sells Google ads or Facebook ads or something like that. these sales calls for those people. It's it's a trust game. They're working out like, "Hey, can I convince this guy to pay me $1,500 a month for the next six months and without any guarantee of

5:25results, right? That's a tough sell. It's like you have to show them testimonials and be like, "Look, I promise you I'm really, really good at this, but sign this contract and you're going to pay me for the next six months whether I get you results or or not." With me, the whole script is flipped because I'm like, "Hey, I already did the work of building and ranking a website and it's sending you calls and you're making money off of me before we even agree on a deal." And I'm not

5:48pressure selling them. Yeah. This is more of like a a landlord and tenant relationship, not like a oh customer, please work with me, right? Relationship. This is the rent. And if you don't like I've had I've had rental homes. It's like the rent is not negotiable because I've got 18 people applying for this house. 100%. you don't want these calls, I'm

6:07just going to call Joe down the street. And I know that sounds like aggressive and mean, but like my service is hugely beneficial to small business owners who can't afford to to take that $1,500 a month risk on some marketing company with no guarantee of results. These small businesses, most of the guys I work with, they they only have 1,500

6:28bucks to gamble on a marketing company. So with me, there's no gambling. day one they're getting leads to pay for my services which really a huge benefit to these like more mom and pops that can't afford to gamble in a marketing company. Well, you mentioned like I don't have contracts like I don't I don't negotiate on price and this is a trust business and results are the greatest form of trust there is. Right. Contracts equal lack of trust in a relationship. You're

6:57saying I already brought you results. They were free. I called you and I brought you results. like this is the price. I don't need a contract cuz I got a guy waiting. Exactly. I'm not afraid of you cancelling. I could call the next person. I love like this is one of my general frameworks for life is do the hard thing first. So like if you start a business and it is just a beast and you're beating your head against the wall and it takes months to get profitable, that means everything after that point is just going to be so much nicer and easier. every business after that point,

7:26every sale after that point in the same business. You're saying, "Listen, bro. I did the hard part. The hard part is ranking. That's my skill. You're good at junk removal. You keep doing that. I'm really good at being a website landlord. I've already done the hard part. I've proven the results and then everything

7:42after that is just gravy." Exactly. Exactly. It's it's just day one results. And uh that's that's really the benefit. The only downside for the business owner is that their brand isn't being advertised on my site, right? But they don't care because the only reason you want to be on page one is because you want the customers that come from page one. And

8:03it's tons. It's not just any customers. It's high intent customers because no one is typing into Google junk removal services in Austin unless they're looking to purchase junk removal services in Austin. And plus, a lot of these people have had experience with paid ads. And paid ads, you get such low ROI because you pay thousands of dollars for them. And plus, if you're anything like me, which I think most searchers are, once you go to search on Google and you see a bunch of ads in this top section of the front page, you scroll right past them and go to the results below, which is where we are. Because

8:37people have this inclination or what's the word? the the belief that if you're in the spots below the ads, that means you're the best in town. When in reality, showing up right there has nothing to do with your quality of work. You could be the worst junk removal company in the whole state and you'll still be on page one because you have

8:58good SEO. Well, just like anything, if you're the best at marketing, you win. Yeah. Right. Yeah. And and the great part about the best part about this business model, we talk about the money and everything like that and that's awesome, but genuinely once you get that client in the door, this becomes 99% passive. All right? As you scale to more because once the site is built and ranked, majority of the time, your website does not need to be touched ever again because we're competing in low competition SEO spaces

9:30like longtail searches. Not even. Not even because junk removal Austin might not be a great example because I haven't done my research on a actual lowhanging fruit niche in city. But SEO is just a game of competition. I don't want to go into a niche where like personal injury lawyer Los Angeles where the competing websites are funded by major marketing companies that these law firms are paying $50,000 a month to. I want to compete against Joe, Bill, and Steve in Oram, Utah with a junk removal company where they have websites that I'm competing against. They bought those websites maybe back in 2005 and haven't touched them since. And so I go in

10:07there, make a halfdecent site, and do basic SEO and I'm knocking them out of the park really quickly. And I don't have to do ongoing SEO to maintain the site because I'm already so far ahead and they're not even noticing that they're that they're not in the number one spot anymore. and they're still getting roughly the same amount of calls because being in spot one, two, or three is roughly the same. But I want to just mention the passive part one more time because it is genuinely passive. The only thing that the only time it becomes like maybe an hour or two a day of work

10:37is when you scale up to a point where I'm at where I have like over a hundred clients and maybe 20% of those clients every month credit cards decline and I have to go follow up payment, right? And so I just test involves me shooting out texts and emails every day to follow up with them to collect the payment. Maybe by the end of the month, one or two of them don't pay. I have some churn and then I'm following up just making phone calls to find a new client to replace

11:01them. I mean, what we're talking about is basic supply and demand. You're saying you look to the supply and demand first, not necessarily the keyword volume, but the supply and demand. And there are at least a thousand home service niches out there. And I know that sounds like too much, but there's really not. If I say the word gutters, then it's gutter cleaning, gutter repair, gutter replacement. Like just in the gutters, there's at least 10, right? So, let's just say there's a thousand to be conservative. And then let's say there's only a thousand cities worthy of trying to rank. That's a million supply and demand variations that we're talking

11:33about. Are you telling me that the market is so perfectly efficient that all million of those combinations are there's a there's the right amount of supply and demand in all of them? Absolutely not. and a decade from now there still won't be. Right? So that's the level of opportunity here. And on this podcast, we only reserve the P word passive for like things that I truly believe can be. And I I don't like that word usually, but I will use it when I feel like it applies. And it seems like this is one of those exceptions where it

12:04does apply. So listen, it's not like dividends, right? It's not passive dividends. Well, and it takes activity to get to the passive point. I'll tell you right now, you know, people like to talk about real estate like it's passive, but it's definitely Oh, dude. [laughter] Don't get me started. Definitely not. This is a thousand times more passive than real estate because the risk is so much lower. You're not taking out a half a million dollar mortgage on some property and your overhead is maybe 20 $25 a month in total overhead. Plus, you cash flow way more and the maintenance is so much

12:37lower. So, let me ask you about pricing. I'm going to make an assumption here because I'm kind of in this industry and I've I've been in lead genen forever. Different types of lead genen directory sites to me there's a lot of overlap here with directory sites. I mean a directory site could be a a website

12:53landlord a rank and rent site, right? So, I'm going to make an assumption that you've tested a pay-per-le model here as opposed to a flat monthly price model because you thought, man, it we could be much more profitable if we charge 30 bucks per call. And 30 bucks per call is very generous because we know that his close rate is 50%, his average job is $800. So, 30 bucks per call is cheap for him. you tested it and then you saw that it just didn't work as well because these business owners want to know what

13:22their bill is going to be every month. Even if they net out behind, they would rather pay you a flat fee every month because of the predictability of it. Is that accurate at all? So, what most of these business owners want to do is a commissionbased and they want to just pay on jobs they close. But obviously, I can't do that because that requires me to track all their jobs and trust them to be honest. you know, there's no way for me to know if they

13:45actually closed a job or not. And if you could if you could trust them perfectly, it'd probably be more profitable for you. I'm actually for It's funny you bring that up because for the first time ever, I my contractor that I use for my house, we've become pretty good friends and just recently I started generating concrete leads for him and we're actually doing a 10% commission with it and it's turning out to be way more profitable. But that's because I totally

14:07trust him and he's a cool guy. Yeah. Yep. But the pay-per- call thing, yes, it's unpredictable for the client. And I've done things in the past where they have fluctuating tiers of rates where it's like, hey, if you get 25 to 50 calls, you're going to pay this much. If you get 50 to 100 calls, you're going to pay this much. I've kind of abandoned that, not only for the client's sake, but for my sake. I know I do really well. I make around 35k a month, and it might be sound impressive to some people, and it is, I guess, kind of

14:35impressive. Is that profit? That's pretty much the overhead is like so low. It's entire our company does around $100,000 a month as a whole and our overhead is maybe less than $5,000 a month. Yeah, it's crazy. The reason I have switched from the tiered pricing to the monthly flat rate pricing is because I wanted simplicity. When you have the tiered pricing, I have clients reaching out to me being like, "Why did my invoice pop up to 1,500 this month?" Then they want to go over every single lead with me and determine whether it was actually a legitimate lead or not. Yeah, I don't want that headache. I'd rather

15:10make less money and have this be 100% passive than squeak out an extra 5 to 10 grand a month because I'm like overanalyzing and auditing all the leads. Auditing leads. Yeah. I don't want anything to do with that. Clients that have been with me for five years and I haven't spoken to them or had any communication with them since and they've been paying me every single month and that's my goal. How long did it take you after starting this six

15:35years ago to see your first win? Three months. I kind of did it a backwards way. I since I was really hungry to get money in the door, I didn't do it the classic way of building the sites first, then finding a client. What I did was I went onto my phone, I went into my Facebook, Instagram, I made a list of all the business owners I knew, right? And I came across this one friend of mine who was an attorney, um, a workers comp attorney. He was a friend of mine from high school. I hadn't talked to him in 10 years, though. But I reached out to him. I made a screencast

16:03video where I recorded my screen and showed him how this business model works and how I could build him a site targeting Torrance. I could build him a site targeting Long Beach, Anaheim, Seami Valley and specific cities targeting where I could generate him leads from. And he loved the idea. He wanted to try it and he said, "What do I

16:20have to pay to get this ball rolling?" And so I just I had never I had never made a single dollar in my life outside of W2 earnings. And so I just threw out a number because I always heard in movies and stuff, aim high. And you know, in your defense, like a personal injury attorney as like an agency owner is like

16:37the golden club. Well, it was a worker. They've got budgets. It was a worker. Okay. You said that. Okay. So, it was still attorneys are great clients. Yeah. They've got cash. Yes. Exactly. I I just threw up the number. I go $6,000 and within 20 minutes it was wired. And I looked at my wife. I'm like, "Somebody just wired me

16:54$6,000." I'm like, it didn't seem real. But the good thing about that is I still at the time wasn't like an expert at this. But what was good about that is that this was somebody I knew and I didn't want to burn his trust and and burn a relationship. And so by him sending me that money, it lit a fire to get things going. I didn't care

17:13or deliver. Yeah. I didn't care if I spent every single dime of that $6,000 in outsourcing or or the ways to make it happen faster. I just needed to deliver results because I knew if I did, it would be a long-term relationship. and he's still my client to this day. If that gave you an idea, this channel is where I put the best parts of my podcast, The Kerner Office. And over 80% of you watching are not subscribed. So, let's fix that. It's free. And every week, you're going to meet another business owner who shows you the real numbers. And YouTube thinks you'll love

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