While real estate is an industry that still relies on paper for some important aspects of the business, technology is still greatly influencing the industry, as J Massey explains. Finding sellers and buyers is mostly done online these days and if you aren’t embracing technology, you’re missing out on deals.
Instead of the traditional direct mail of yellow letters and postcards, J Massey talks to us about how you can hit a bigger audience by advertising online. Technology has brought us efficiency to our business.
Mike: Welcome back to the flipnerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
J Massey: Hello everyone, J Massey here CEO of Cashflow Diary and host of this session of the REI Classroom. And today we’re going to talk about how technology is influencing the business of real estate.
Mike: This REI Classroom real estate lesson is sponsored by theinvestormachine.com, FlipNerd’s private investor coaching program and your blueprint to investing success.
J Massey: Now, you may have noticed that real estate, well, still uses paper. We still have to be in person to even get some deals done and especially when a notary is involved. So you could be asking yourself, what role, if any, does technology play inside my business? Well, here’s what I will say to you. I’m going to make a blanket statement. I’m going to tell you that if you are not using technology and bigger and better fashions, it won’t be too long before your business is obsolete. Here’s why.
The number one area where technology is influencing real estate today, right now, is inside your marketing. You may have noticed that investors don’t necessarily come knocking on your door, neither do deals. And it’s for only one reason. The person with the problem doesn’t know you exist, aka, your marketing is probably still yellow letters and flyers. So stop that. Not because it doesn’t work, but because your customer has moved on to other pastures and they’re not finding you there. If you do the math, you’ll soon learn that it is cheaper, faster, significantly more efficient to go source your customers, buyers, investors, sellers, etc, online versus offline.
Now, this isn’t to say that you’re going to just put a Facebook ad up and suddenly sell a house, that’s not going to happen. You’re not just going to be able to make an ad and suddenly have $100,000 of investment capital show up. That’s not going to be the case. It’s still a relationship business. Because, well, we’re high trust. We’re also high dollar.
However, the relationship now begins online versus offline. Think about this for a minute. There are approximately 150 million people who use sites like Facebook a month. That’s a lot of people. How many flyers can you send out in a month? I’m guessing you can’t reach anywhere near a fraction of a fraction of a percent. And yet you can do that same thing for pennies and sometimes less than a penny per person online.
Number two, when it comes to real estate etc, let’s say you’re the cash flow kind, right? Because that’s exactly what I like. If you’re the cash flow kind, one of the most difficult things that can face you is finding strategies to keep your property profitable. Well, interestingly enough, technology has entered the real estate field in such a way to be able to allow us to find that highly profitable customer significantly easier than we used to. What am I talking about?
Specifically, I’m talking about short term rentals. This is not a new concept, okay? I’m not saying short term rentals are brand new. They’ve been around since civil war and before. Here’s what is new. It’s easier for the customer to find you and for you to find the customer. And technology has come into the play to be able to allow you and I to connect really, really quickly and efficiently and be able to literally turn our existing real estate holdings into quality short term rentals at very, very profitable prices.
What do I mean by that? Typically, on average with the students that I’ve worked with and my own portfolio in and of itself, imagine that house that you’re currently renting, imagine that apartment unit you’re currently renting, the condo that you’re currently renting right now, as its monthly rental rate. So let’s just say you’re renting it for $1,500 a month. Now, what I want you to do is to look at that same house and double that income. That’s what we are beginning to see in terms of efficiency and increased revenues. Now, is there more work involved? Yes. But, here’s the fun part. It too can be systematized which leads me to the third thing that technology is bringing to the table.
It’s bringing efficiency inside our operations. You ever have trouble communicating to say, your property manager or your maintenance guy or your accountant and CFO? Or maybe, even just that operations person. Well, what if you had a very centralized repository to be able to go out there and always do business no matter where you are in the world. My entire business can be run from one cell phone and one iPad. Why? Because between the apps, web-based and otherwise that currently exist today, we can systematize everything that we need and especially make our communications very efficient.
Specifically, I’m talking about apps like Quip, apps like Slack, apps like SugarCRM. Many of these apps can come together to completely free you from your whole email strategy, no more sending all those back and forth. And most importantly, put you in a position of control anywhere that you have internet access. This is another way of saying finally, you and I as the real estate entrepreneur can actually go wherever we want, whenever we want. And we’re no longer tied to our portfolio locally.
It’s been fun talking to you guys today, I look forward to talking to you soon. Until next time.
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