I know you all can help me pick an idea apart, so wanted to get some feedback.
I’m starting an investor network that will be backed by a performance guarantee. I wanted to do this because most of us have been taken by contractors, agents, lawyers, etc. I now have a close network of real etate pros that I trust and we send referrals all of the time. I wanted to create a more formal network so we can leverage each other’s relationships.
Before I launch, I wanted to pick the idea apart or get a hot/cold feeling from REIclub.
Basics:
[b]1. Network members are backed by a $500 Performance Guarantee. All promises are writing and signed by both parties. Should the network member fail to adhere to the agreement, the consumer will be paid $500 in certified funds within 10 days.[/b]
The idea behind this is that we’re putting money where our mouths are. Each provider will have a form where they outline what the consumer should expect as well as what is expected of them. This will include how to resolve issues or dissatisfaction, timelines, communication guidelines, etc. I’ll interview the consumer first. If someone just wants a referral from the network, that’s fine. No need to sign the agreement, but they won’t get the guarantee.
2. All referral, wholesale, and assignment fees or commissions are guaranteed upon completion of negotiations. We will not solicit the owner directly when an agent or investor brings us a deal. This to help investors, agents, etc. trust that they won’t be pushed out of a deal they bring to us.
Oh, also, preliminary criteria for service providers and investors are as follows:
- Must be the CEO, Owner, or decision-maker for their company for 3 of the past 5 years.
- Must be an active real estate investor for 3 of the past 5 years.
- At least 50% of their client base must be commercial or residential real estate investors.
- Cannot outsource more than 50% of work that directly affects the transaction or consumer. I won’t guarantee builders or general contractors since they rely on too many outside contractors.
I know this can seem too formal, but I just want consumers and agents who don’t know us to feel protected when we make an offer or they first work work with us.
My two cents about the idea, is that I have grown a bit paranoid about the items that you are addressing, thats a good thing I think.
I have spent $$$$$$$+ over my decade long career learning that there are alot of people cannot perform. So much so this I probably pass by good service providers because I dont want to “go through the motions to try out the new guy”.
The guarentee, at least is something (although candidly, $500 is not going to mean much to me if someone jerks me around).
Couple of question (s);
What is the specific value proposition your proposed group will provide to the customer?
Who specifically (by example) is the customer?
How will the group make money from the customer?
What means will you have in place to verify (part two of your posting) info on the members?
As a final thought, when developing this network, I suggest you host an inexpensive, but well thought out one day workshop for your providers, get everyone in the same room.
Do a couple of round robins on goals and objectives, maybe employ a facilitator (i estimate the cost of one at $1000 for the day), and actaully commit to paper what everyone in the room wants to do.
Id fly in just to sit in and put my own “money where my mouth is” to be a “helper” for the one day even.
I think that like any partnership, matching up and dos and donts of your groups goals and objectives is crucial.