Madison Real Estate Investors Association

The Ebb and Flow

It’s an interesting phenomenon, the ebb and flow of membership at the Madison REIA.  Turns out, it tracks closely with most REIAs across the country, but it does not track at all with most professional networking associations.  I wanted to understand this curiosity a little better, so I took a closer look.

First, let’s define what this ebb and flow is all about.  Through social media, search engine queries, and referrals from individuals and organizations, people find their local REIA.  The individual referrals are the best because they are person-to-person and all about explaining value received by one person explaining it to another.  It’s like seeing a great movie – you share it with people.

But those organizational referrals can be a double-edged sword, especially if the referrer is a “fly-in guru” that has come to Madison, talked people into parting with their money for a “boot camp” or personal coaching, and then admonishes them to go “find your local REIA” on the premise that this is where you will really learn what this stuff is all about and interact with like-minded people.

While the latter points are entirely true, the problem is that it’s the guru laying claim to having discovered this awesome resource just for you and, consequently, you now deserve to “step up” to a more advanced coaching program where you’ll really get the juice.  But that juice is expensive, as you may already know.

With all these sources funneling into the REIA, a few people will look closely at the value that they might get from being a part of the association, and they sign up as members. This is the flow of membership increases.
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I’ve had some discussions lately with coaching students about marketing.  One student was perplexed and somewhat upset, understandably, that “nothing is working”.  So, we drilled down into his work to see if we could uncover something.  I asked what he was doing for his marketing.

“Direct mail” was the answer.  Good, that’s a great way to reach out to a lot of people and get decent results; although this was clearly NOT the case for this guy.  Now, I should mention that I have seen his marketing letters and they are really great – to the point, clear, and all about helping the prospect.

So, naturally, I went to “quantity” and found that he was doing about 100 a week.  Not an avalanche by any means, but certainly enough to generate a response or two from time to time.  But, “nothing” is what he claims to be getting.  Absolutely nothing.  Makes no sense, really.

Later that same day, another student approached me with a couple of questions and remarked that he was fielding a “bunch of leads”.  “Wait a minute”, I said with this earlier conversation in mind, “where are you getting these leads?”  Oh, direct mail, talking with REALTORs, and friends.

So, the first thing you could rationally conclude is that he had multiple streams of marketing going on, but with all things being equal, he should have had little or no response from direct mail.  Not the case.  He was getting the lion’s share from direct mail response.  He was having good conversations.
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I was looking for something in my old properties folders when I came across a couple of gems that made me smile and, at the same time, made me thankful that no one was killed in the process.  Now, before you think I’m being all dramatic, let me explain what one of these two properties was all about.

This was “back in the day” when most of the properties that we acquired came off the MLS.  Life was so much simpler then.  Banks would foreclose on properties in default, many of which had been long since abandoned, then they would take them back into REO inventory and have a REALTOR list them.

We miss those days of so-called easy pickin’s when banks had no intention of touching the properties, they just wanted them GONE to eliminate the “non-performing asset burden” on their books.  Now there are “programs” and “PMI” and other things that can make holding these assets lucrative.

We all thought it was weird when a bank would come in, strip out carpet, spray everything in sight with a bad flat white paint, carpet the floors, and then list the property at a price as though it was newly remodeled.  It was truly lipstick on a pig in the strongest sense of the word.

So, let’s talk about property 1 – it was pretty trashed and had that special brand of homeowner uniqueness to it – one step up into the living room, one step down into the kitchen, two steps into the main floor bathroom, etc.  You get the idea; an ADA nightmare.

But we noticed something interesting about the kitchen – the floor was rock-solid, but all the surrounding floors (one and two steps up and down) were regular-sounding wooden subfloors.  The kitchen sounded like it was “flat on grade”.
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