Re: Here We Go - Posted by Tyler
Posted by Tyler on April 27, 1999 at 02:20:17:
I must admit, Ben, I’m enjoying your perspective. I hope you’re not getting your feathers all ruffled up on your end…judging by the “HERE WE GO”.
I still think I need to clarify further, because a lot of your points I agree with. Maybe I need to elaborate on my ideas of “BIIG” and “storefronts”, because we are getting a little crossed, here.
When I say “marketing like a major Corp”, I’m talking about doing things more professionally than any small business owner I see around my area. And MUCH more, than any investor I know around here. On most of the investors business cards I have, their name is twice as big as the message (I BUY HOUSES, etc).
This is exactly what you’re arguing: that the seller doesn’t care about your name or how long you’ve been in business. I agree with all of that.
But here’s what I mean by being big, presenting a good image, and at the same time (as you accurately inferred) positioning myself in the market:
You never know when or where you’ll find a motivated seller, right? Pretty thin market. So if you CAN position yourself in the mind of the community, BEFORE they need you, then when they ARE ready to find you, they will know where you are, or who to call.
I personally think it’s crazy to think that everyone who gets in a tough situation, with their back against the wall, will immediately go to the “Real Estate Wanted” column of the classifieds. Quite frankly, I would bet that a good portion of the population doesn’t know the ads exist. Even for the folks who DO know about those ads, there will be many who might not even call because, IN THEIR MIND, they don’t see how you could help them.
If you don’t see a solution to your problem, it’s hard to know who to call to get a solution. Does that make sense? I’m saying that while there are lots of people that will go right to the classifieds, find your ad, and call you, there will be those that never make it that far. And so, who will they call first? Maybe an agent,who knows. Maybe they’ll give up and just go into foreclosure. Too bad…we could have helped them.
As an example, let’s say that you drive by a big sign on your way to work every day, that says “We’ll buy your used Nintendo games”. Chances are that eventually, when your son gets tired of his 27 games, and decides that a Sony Playstation is cooler now, that sign will come to mind…or else the next time you drive by it, the light will go on. If you hadn’t ever seen that sign, you may have just thrown them out. Let them sit around and become obsolete, or give them away at a garage sale. If you had no idea there was a solution, you probably wouldn’t know to look for one.
Kind of a corny example, but the point is that most people just don’t know that that we exist. And that’s the truth! Think about the reactions you get when you tell most people what you do. “You do what? Buy houses? When did you get rich?” or “what do you mean you don’t have to get ‘pre-quallified’” They don’t have a clue what we could do to help them…they know nothing but conventional.
We know what most people don’t know that they don’t know. (say that 5 times! :))
So my logic is that you should position yourself in the the mind of the community, as a solution to a problem. A problem they might not have today, or think they’ll ever have, but you know that when they need you, they’ll be calling. Or they’ll tell a friend in need. And you will have established a good “image” upfront, by having a business that they can be confident in. They’ve heard of you, seen your office or sign, maybe even recognize your logo. There’s also the argument of adding credibility when you can have them come to your office in town, as opposed to meeting at McDonalds to sign papers. To me, that’s all image and I think in any business, it matters.
In addition to the storefront sign “name awareness” type advertising, I’m also talking about targeting a specific message to a specific segment to focus on generating an immediate response. These campaigns reach the person who needs us TODAY. These would obviously include letters, postcards, and to a certain degree radio spots.
The classified ads will be there for the people who know how to, and are able to, search ME out.
I guess, going back to the original post, I may have given the wrong impression of the kind of “BIIG” I wanted to analyze. I’m not talking half page newspaper ads with a logo and a one liner, or a two story building with a clock on the sign. To me, big, as compared to the rest of my competition, is BIIG. But not the kind of big I may have projected.
The other thing we were discussing was focus vs. diversity.
My reason for wanting to know about several segments, is because they all serve different needs for my financial situation. My objective is to create the “large pay checks” as you spoke of, and put much of that back into my assets, so I can build my passive income. You can’t create passive income, if all you are doing is buying and reselling. You create a JOB for yourself, albeit a good paying job.
I don’t want to have to reject callers with MH deals, like the other investors I spoke of, because I “don’t know how to make money with them”. I can get huge returns, and build nice secure low maintenence positive cash flow with MH’s. Take some cash from the big rehab I just sold, and throw it into MH’s. Or buy some paper. I like L/O’s for the multiple profit centers, additional PCF, and low risk. Plus there are lots of deals that a simple L/O can solve, that no one else can really touch. So really, Ben, there is a reason for my diversity. A good system is the most important. If I was a disorginized one man show, I wouldn’t be able to do nearly as much as with a streamline system. And in that case, I would agree that being a specialist would be more profitable. But for me, my focus IS on one thing: perfecting a system to solve sellers problems. Within that framework I can use various strategies to create solutions and use the different advantages of each segment of REI to reach my own financial goals.
I’m going to stop rambling on, now. It’s past midnite and I’ve been sitting here WAY too long!
I hope this made some sense…
Don’t forget to e-mail those book titles, Ben. I am interested…