Greetings everyone,
I’m a real estate broker. I just wanted to ask a few questions to the serious investors on this site to see what they think of a new business model I’ve come across. There’s another competing agent in my town that is heavily marketing investors via e-mail blasts of mls listings that fit all the criteria of a distressed sale. For instance, in the mls, I can search for fixers, short sales, reos, foreclosures etc and I can input clients into the database to be e-mailed immediately whenever a listing is posted in the mls that fits their criteria. Now, this agent pre-approves these investors for 100% financing. The rent to owners he markets to move in to SFR with a NNN lease place and an option to buy. This is NOO 100% financing for the investor and therefore the return would br infinite since there is no capital outlay when the investors signs on. The agent calls it the shark pond. The agent purports that if his investors aren’t ready to go within 15 minutes then someone has already snatched up the deal. So, lets see, he’s planning on rolling this out to a nationwide network of 17,000 Realtors next week. Up until now, it’s been well received since he’s only got a handful of investors. The question is, would you as an investor be interested in something like this? Would you pay to get into his Platinum list? Only $1000. Even if every Realtor in the network only had one client, thats 17,000 investors for 20 deals. Not very good odds. So, I guess I’m asking what’s the value add to an investor in this scenario?
Would you rather prefer an agent that put you on the shortlist or would you rather take a number…17,001? The MLS is a commodity after all and I retrieve the same info at exactly the same time he does…he justs wows his investors into a feeding frenzy with QuickAlerts and other marketing gimmicks. I’m just wondering…would you as an investor be more interested in a broker that works with only a handulf of investors, or thousands of them? Any help in understanding how I can provide a value to my investor clients given this new parasigm would be greatly appreciated.
Thanks
Blackmore
Is he a student of Rob Minton. google rob mintons name and I think you will see similarities in their program. I just thought of this when I saw the fee for investors thing.
Eric Medemar
Blackmore,
This plan is aimed squarly at newbies. The reason that I say that is that no experienced investor needs to pay $1,000 to be on someone’s platinum list, just to get listings of distressed properties.
I have a young, hungry realtor that does this for me absolutely free. In fact, she calls my cell phone when she finds a deal which is faster than waiting for me to discover an e-mail. Additionally, MY AGENT understands exactly what MY purchasing criteria are and will not waste my time with something I’m not interested in.
Therefore, no, I would not pay $1,000 to get something that I already get for free. However, that does not mean that this is a bad business model. There is an entire industry of companies targeting newbies. If newbies will pay $5,000 for a bootcamp that promises to reveal “THE SECRET” of instant riches with no work (a secret which doesn’t exist), then they would certainly pay $1,000 to be on a platinum list of distressed properties. Many newbies don’t want to leave their house and their computer, and your list will help make that possible.
Good Luck,
Mike
Sounds great from his point of view but terrible for the investors. Seems like he would have a steady stream of sales at inflated prices due to bidding wars, etc.
I met with an agent yesterday who had a similar proposition. His “VIP Program” for Buyers required a six-month contract making him my exclusive broker in THREE counties, plus a $495 fee on any home I put an offer on. Even aside from the fee (which would be in addition to his commission), how is one agent supposed to effectively represent me in three different counties - especially when he’s probably found 100 suckers to actually sign up with him.
Of course, 90% of his program is what a quality agent should be doing for me anyway! The other 10% (which included a VIP daily email list) wasn’t nearly worth the commitment he was asking. Needless to say, I walked away - I just wish I had known his gimmick before I wasted my time sitting down with him.
To answer your question in short - No, even as a new investor I would not touch a program like that in a million years. But I’m also not the type to spend thousands on guru programs either.
Thanks for the input everyone,
This is pretty much the repsonse I was anticipating. I’m not sure if he is a disciple of Rob Minton. He does require a year commitment with a 90 cancellation period. I don’t see how any investor in their right mind would be interested in paying someone 3.5%, plus a $1000 just to take a number, say 17,001, and pray your PDA is working. Although this competing agent supposedly doesn’t allow bidding, you have to be the first to respond in order to get the deal. Therefore, the impact on everyone in my area, is apparently, that any deal that pops up on the MLS can now be snatched up in an instant by a pool of “investors” nationwide. Therefore, in order to remain competitive, I will provide a service similar to this, but obviously with no fee and a reduced commssion…I mean how hard is it for me to setup an automated e-mail service with a spreadsheet import telling my investors their cash invested, cash flow, cash on cash, etc. etc. Oh well…the world is flat. Therefore, find out what the consumer wants and give it to them, now!
As an investor, I would tell this guy to take a hike. I can get that info for free, Realtors have few sales and they make their living on selling. Investors, if savvy, are having realtors call them with deals all the time. Finding distressed properties is not difficult. Realtors will most often do it for you. I always remember, they have one to sell, I have many to choose from .
I would definitely not pay for listings.