1/13/13: Embracing Change in the New Year – Getting Investors Up to Speed

Technology is changing the way people live, work and play.  Now that’s not a bad thing, but it’s easy to get left behind.

But just like calculators made doing math different, those who use them most effectively understand the basic mathematical concepts behind the speedy calculations.

So what does that have to do with real estate investing?  That’s what this episode is all about.

Talking tech and embracing change on location in sunny San Diego:

  • Your talkative and embracing host, Robert Helms
  • The Godfather of Real Estate, Bob Helms
  • Special guest, internet marketing guru, Pol vanRhee

Since Bob started investing only moments after God created dirt, we start out the conversation capturing Bob’s observations about the impact of technology on the business of real estate.  You can bet he’s seen a LOT of changes over the centuries.

In the beginning “high tech” was a calculator.  That’s a big step up from those old mechanical adding machines.

Then copy machines replaced carbon paper.  Really.  We’re not making it up.  People used to take two pieces of paper and put a dirty piece of paper in between them and type…or even write by hand.  Then the dirt from the middle sheet would make impressions on the bottom sheet and presto!  Instant copy.  Amazing.

Then things picked up.  Word processors replaced typewriters.  Fax machines became all the rage.  Then everyone had a desktop computer.  Before long, there were pagers, cell phones, laptops, smart phones, tablets and implants.

Okay, we’re not at implants yet.  At least not for communication.  Then again, a nice set of implants says something…but that’s a different discussion.

Did we mention the internet, and search engines and social media?

You get the idea.  More change is coming faster.  It’s easy to get overwhelmed.

But remember…technology is primarily designed to make the basics of human activity more efficient, which doesn’t necessarily mean it’s more effective.  There’s a big difference between being efficient and being effective.

Efficiency is about getting things done fast and right.  Of course, you can be highly efficient doing the wrong things – and that’s not very effective.

Effectiveness is about getting the right things done faster. Which brings us back to focusing on the principles behind the technology.

Real estate is a relationship business.  Sure, there’s lots of data and financial analysis.  There’s records to create, share and store.  But the CORE of the business is connecting with people and doing business.  From that stand point, all business is based in relationship.  Yet, we contend that real estate is different.

Why?

Because homes and offices are PERSONAL.  And the numbers are BIG.  There are emotions involved and people want to work with people they like and trust, in relationships where they feel understood.  You might buy a book or a pair of socks on line, but a $300,000 four-plex?   You probably want to talk to someone.

Yet with all this wonderful technology at your disposal, it’s easy to forget the human factor.  Technology should ENHANCE your relationships, not replace them.  It sounds obvious, but it’s really easy to forget.  Why take the call, when you let it roll to voicemail?  Why call back, when you can text or email?  Be careful.

Beyond that, even the holy grail of marketing, “word of mouth” has a new meaning because of technology.  Someone may simply forward an email, share a link, like a page, tweet a URL, etc.   Your mission is to make that easy for your tenants to tell other prospective tenants about your property.  And to be keenly aware of how quickly bad customer service can spread.  There’s little margin for error in today’s connected world.

Pol vanRhee explains how the internet allows people to perform research, seek out products and services, and share information with unprecedented speed.  This means you have more competition when you’re searching for deals or marketing your properties.  It can be good or bad, but that’s not the point.  It’s here, like it or not.

So get ready!  It’s a brand new year and there’s lots of change and opportunity on the horizon.  Open your mind and arms and get ready to embrace it!

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Are your social-networking habits effecting your borrowing power?

Unless you’re Donald Trump, you probably need third-party money to close some deals.

As real estate investors, we want to make the most of our borrowing power.  But is it possible your social media habits will effect your next loan?

Yes, it is possible.

Rumor has it banks and lenders are gathering intelligence through social media and how they intend to use this information is debatable. Let’s take a deeper look at what is being collected, how it may be used and what you should do about it.

Banks and lenders have always assembled data to determine one’s ability to pay. Traditionally the sources have been credit reports, pay stubs, previous years taxes, bank statements, co-signers and so forth. Now, one’s “social-graph” (online relationships and habits) may have an impact on a lender’s willingness to extend credit.

Does your social media presence reflect financial distress? Do you have friends who are in distress? Are you changing jobs? Moving back home? Buying a new car? Planning a wedding? Taking a dream vacation? Getting divorced?

Your financial situation is greatly reflected in how you live your life. Nowadays, people are sharing their life stories through social media, which is creating a more connected world.  But it’s also offering financial institutions (not to mention employers and business associates) a whole new world of insights into things that may not improve your chances of getting that great loan or employment offer.

For legal reasons, the likelihood of an individual’s social sentiment dictating borrowing power is slim. However, word on the street is that banks and lenders will use this information to better direct their marketing efforts. Those with higher social rankings, within their internal system, will get better offerings than those with less favorable profiles.

We have limited this to just banks and lenders; however, this same approach could certainly be applied by potential business partners looking to finance one of your deals. Obviously, as real estate investors, we want the best offerings and here are some tips to preserve your social sentiment.

  • Have secure privacy settings
  • Be conscience of what you post and how it could be interpreted
  • Understand that you are trackable in the digital community
  • If you are not paying for a service, then you (that is, your information) are the product

Social media has created a small-town world and allowed meaningful relationships to develop virtually. This is a powerful thing, which means there is potential for both good and evil – so be conscious of how you use and participate in social media.

Remember, EVERYTHING you put on the internet has the potential to be seen by ANYONE and can live FOREVER.  As an investor and entrepreneur, it’s essential to be diligent in building and protecting your personal and professional public appearance.  Make sure what you’re putting out there consistently presents the public image most advantageous to your investing and business goals.

Staci Davidson is a social media strategist, coach and consultant.  For more information, visit www.stacidavidson.com.