BiggerPockets

It's Not Technology You Should Be Worried About, It's the People

Wednesday, April 07

Last night at our MnREIA meeting we hosted the topic on using technology to simplify their real estate investing.  Over the course of the last year and a half we, like many other real estate businesses have been diving into the deep end of technology learned and came to some realizations that weren't apparent from the get go.  I'm just going to be running through some reflections here, but before that I went to instill one point.

"Technology shouldn't be put before people."

I say this because Zig Ziglar is quoted with the notion that emotion triumphs over reason.  Personally I hate this reality, but in working against I've come to realize it's true...  Doesn't mean for a second that reason does that reason has no place because reason is what sticks around after that jolt of emotion fades.

Twitter

Twitter provides an excellent example of emotion getting the better of a lot of people and reason winning out over time.

Back when we first started on twitter we thought all we had to do was follow a bunch of people to become popular and then a certain amount of them would automatically follow back, boom increased following!  We were excited and that emotion cost me an entire week of hardcore twitter following.  By weeks end the excitement of a high twitter count dissolved when we realized we weren't getting any quality traffic from it...  we weren't getting retweeted... just zilch.

After doing some considerable reading on the topic and running it through my own reasoning battery it was obvious, reasonably obvious...

During my quest for followers I totally overlooked the people part of the equation.  Excitement got the best of me and it completely sent my twitter account far down the wrong road.  If I would have considered the people equation it would having been glaringly obvious that I wasn't targeting a real group of people.  There are so many people with multiple accounts doing exactly what I was doing, or worse yet doing exactly what I had been doing and then orphaning their account.  Bottom line, I was only wasting my time because I forgot the people and I neglect to think of twitter as a tool, that it was a purpose all it's own.

Terrible idea...  To touch base here there are 2 points:

1. A tool is meant to serve a specific purpose or need, not the other way around.
2. Don't over look the people element, if I would have looked more at who I was really following I wouldn't have wasted a week learning this lesson.

Fortunately reason has been gaining ground and there are now a couple honest to goodness ways to make use of twitter:

1. Using it as a newsfeed by using keyword searches, hasttags, and selective following.
2. Broadcasting your feed to twitter followers who take advantage of way #1.
3. Communicating with friends and/or your network in real time i.e. "Lo-so" networks like foursquare.

Now assuming everyone is following these reasonable practices you get to think in a vacuum, all safe like...  But even though this new online world is unfolding at an alarming rate that doesn't mean that the audience you think is there is really there yet.  Today there are still social media 'gurus' selling people on the idea that I initially took so if these 'gurus' are still rolling fown that wrong road while selling others on it then the audience is something we have to be overly aware of as our reasoing unfolds.

A simple way to look at social media

When you look at networks like facebook and Twitter it's important to keep in mind that what makes your experience, which should be inline worth a particular purpose, is who YOU follow/friend.

As a real estate investor I suggest that others create a facebook account specifically for real estate investing *period*  Do not friend your sister, children, or a single non real estate friend because then you will open the door to getting friend requests from their friends who are friends of friends.  This happens you are on your way to having an inefficient account because you will get a mixed stream of updates.

If you simply friend/follow people directly related to your industry, such as fellow REIA members who aren't part of your real life social group, you will have less clutter on facebook, not waste time sorting through misc. updates.  When your Facebook account has a soul purpose it is most likely to succeed and when you're aiming to succeed in real estate it is more than worth the second account. 

In either case, you make tool (twitter/facebook) work for you by the people you follow/friend.  Put people before the technology and build up from there and you'll be able to reason out own direction for the better.

Thanks for reading!

Isn't Real Estate Investing Just One Big Marketing Game?

Monday, June 22

*Starters will get a lot out of this* 

I remember the other year Cash Flow 101 was the game to play and among it all its left somewhat of an impression on my view of this business.  Basically the goal was to get passive income that exceeded your expenses and then you were out of the rat race and raking in the loot.  Kind of a comical version of the business but it did offer some light-heartedness in an otherwise high stakes world.

Humor can diffuse many things, taking a light approach to serious business is an advantage because your nerves aren't on the brink of failure and you play the game to win (or more specifically the win-win-win).

I embrace real estate for its marketing and to me anyone can learn how to do the 'how to's' of putting together a wholesale deal with options and assignments but the real throttle is your marketing which controls the pace of your business.  The more seller leads you have coming in and the stronger your buyers list, the more apparent it is that your team is doing well.

So here is how the game lays out if you're getting started and go into wholesaling and whatever else is in your reach:

Start by finding a deal:

In order for anyone to really take you seriously it can be a great deal easier if you have a killer deal in your hand.  Note that many successful wholesalers really only have a handful of rehabbers as buyers.  If you have a deal in hand and make use of your REIA (Real Estate Investor Association) then you will have a real estate ice breaker.  If I had a $100 dollar bill, but an option on it for $60 and went into a room full of investors who are all networking and talking about investments, then I'm sure that there are going to be some people in that room that will want to talk to me.  Same goes for an option.

Now anything that can provide such opportunity is not without its due diligence.  If it was simply that easy, everyone would do it and the discounts would be bidded into a distant memory.  But if you learn how to put deals together and how to market, then you are on track towards getting the attention of rehabbers.

There's plenty of material out there on how to put deals together and I'll let it speak for itself.  Here I care to address the marketing side of things and since the scope of my blog is to focus on the emerging techniques (in this day and age, internet and design) I will use this post to cover what I'm not going to be covering in future posts.  Not to worry, but it's just the way it was meant to be lol.

Ok so you're getting into wholesaling and here's you objective:

Get a lead on a motivated seller, contact, and convert.  Motivated seller gives you an option to purchase the property at a significant discount (typically there are repairs that need to be taken into account) and you find a rehabber who is looking for a fixer upper with a spread left over after repairs and your fee.  You then option it over to them, seller gets their money, rehabber gets their property, you get your first deal and an advertising budget (win-win-win)!

2 Parts Marketing 1 Part Deal

In order to make this happen you have to find a seller and find a buyer (the great trial of real estate).  Marketing is what will facilitate the coming together of these two sides and it's what will regulate the prosperity of your business.  Good marketing leads to more leads, the more leads you have, the more good leads you'll end up with, and finally if you have good leads on both sides of the aisle you are doing great.

Marketing Part 1 -

You want to find that motivated seller, the one who is going to lose the house without a penny to show for it unless you show up.  Through our marketing we have found that sellers typically respond well to tradtional forms of advertising such as:

• Flyers
• Bandit Signs
• Business Cards
• Print Advertisements
• Letters

For those of you who want to spend the least amount of money on leads I would suggest buying a list and going door knocking or call every FSBO in the paper and find out what the deal is.  But if you want to create a more systematic approach to flush out motivated sellers then what I would recommend out of the 5 listed above would be bandit signs, flyers, and cards being the most important.

Your goal here is to strike a motivated seller into contact you so you can get an idea as to what the situation is, what the repairs may be, and decide if it is worth taking a look at.  Once you get to the property you estimate repairs (which isn't as hard as you think because the discount you negotiate should cover minor errors) then run the numbers, formulate your MAO and go back to the owner.  Negotiate with the owner, explain how this works for them (make it a win3x), and get the property under an option.

Marketing Part 2 -

Now that you have the first part of the equation you just need to solve for x.  Finding that buyer...  Well if you ran the numbers and stayed under your MAO you should have an ace up your sleeve at the next REIA meeting.  This ace is your bankroll that seats you next to the rehabber so you can make contacts, personal connection, and a business relationship.  When you find a rehabber-buyer then you are in the paint and even if this isn't the deal for them you can still get the rebound and score a future deal.

It is important to nurture your buyers list because that is going to be your ace in the hole when you go back to trying to find more motivated sellers.  It is much easier to play when you already have a buyer in mind that you know this next deal would be perfect for and since you have the opportunity, take advantage of it!

Now the first part was advertisement driven marketing while the latter was all networking through your REIA.  This is a certain case and as your real estate investment operations will grow and you'll have to encounter marketing in all its forms, there will always be ways to do things more effectively, more systematically, and simply put, easily.  In our business it is all about stacking he deck in our favor because we are playing a numbers game through and through and since marketing makes up a large portion of it, it is important to stay on top of the latest marketing strategies/opportunities.

New Wave of Marketing?

These days it almost seems criminal for a business not to have a website, it's easier to forgive not having a YouTube channel or a blog, but we are living in the day and age of the internet where the easiest way to find an answer is to google it and the traffic is too juicy to deny.  The internet provides a whole new playing field for investors to play on and as time goes on it will be the field you will want to call home.

As with everything else, there are barriers to entry and in this case marketing on the web is going to be a very real barrier for many as time goes on.  But I say barriers to entry are what makes the game that much more interesting and fair.  If real estate investing was done by everyone then REO discounts wouldn't be what they are.  Motivated sellers would be overwhelmed with letters, door knockers, and what have you.  But technology spreads out all the styles so it isn't just one direct shock to the seller and it also provides those with the drive and desire to gain an edge on the competition by having a direct way to improve their business and get something out of their hard work.

Let's face it, if all it took to get the attention of a seller was a letter and a stamp the spreads would shrink drastically.  But since there are many aspects to it not everyone can jump in, lick stamps, and get their piece of the pie, leaving more for us.

So now we are in the age of technology, let's rock.