These tech mistakes are devastating businesses, and are setting many real estate companies and investors up for bankruptcy.

Be sure you aren’t copying these blunders that can cannibalize your venture.

Artificial Intelligence

Just as spell check and autocorrect tools still haven’t been perfected and create a lot of frustration some 20 years later, there is still a lot of intelligence lacking in AI tools.

It may be trendy, and we all have to adapt to the times, yet, poorly implemented this is destroying even large multi billion dollar companies rapidly.

The biggest and most devastating issue here is installing AI chatbots and doing away with human customer service. It is just alienating the best leads and long term customers and revenue sources.

Then there is ChatGPT, spinning out cheap low grade content which is no doubt burning years of work and investment in SEO rankings. It may be used for expanding your non SEO content, such as emails, as long as you manually review them word by word. Though overall, it is likely doing more harm than good to most real estate companies. Many may find it costs an enormous amount to recover from these mistakes, if they can escape Google penalties.

Automated AI based decision making tools, such as for credit, also bring more risk than most have thought through. They have not been tested in the courts yet to fully see the liability at stake.

Privacy & Data Protection

Especially when it comes to plugging in new tech tools and automation businesses are requesting more sensitive data than ever. Including IDs, facial recognition verification, and more.

These are an area of massive legal liability. Only collect what you need. Only hold onto what you need. Be sure you are in compliance with data laws, and have the legal team and finances to deal with any issues that arise from data breaches and hacks.

Not Testing From A Consumer Perspective

Do embrace new technology. Just make sure you are first testing it thoroughly from your customers’ perspective, and routinely test it again.

If it is not adding value to them, and making the experience better, it will cost you a lot more than you think the efficiency is making you.

Failing To Hire The Best Talent

The best team wins. You may not be able to afford to keep up with paying current rates of $390k to $900k a year for AI talent. Though you can, and must afford the best business development and marketing managers you can find. Those that can bring years of experience across all mediums, channels, and technologies, and help implement the right choices for your company with a refreshed and modernized strategy and plan.

Failing To Update Websites

If your website is so outdated that it burns teenagers’ and childrens’ eyes, it’s time for a makeover. Today, it’s not only about design in visuals, but also carefully crafting words that sell.

Not Using The Data That’s Available

The recipe for success is combining human expertise and hard data.

Don’t guess what is working in your business and marketing, or believe the mainstream media headlines for what’s happening in the economy or with inflation.

Use the most accurate data you can find. Make sure that it is interpreted accurately, with relevance to your industry and individual business and customers.

Not Prioritizing The Right Metrics

When you start digging into the data it is easy to get lost and distracted with so many metrics.

Focus on your NPS score and real profit.

As capital flows get interrupted and shut down, and borrowing becomes much more expensive, what options are left to fund your real estate deals and business?

Capital Markets Face New Tightening Again

It appears to be that time in the cycle again when capital and credit tightens up, and becomes much more expensive.

Capital markets and especially venture capital for tech startups appears to be contracting. Which will likely prove to be a downward spiral as more of those businesses implode, and their investors become even more fearful.

Failing banks mean fewer options for traditional commercial loans and home mortgages. With higher interest rates making borrowing more expensive through these and other working capital channels.

New regulations to tackle the above may in turn give banks even less liquidity to lend.

So, what are some of the ways that you can continue to fund your real estate business and deals?

Private Funds

Some private funds may still have capital they need to deploy. Or cash from recent exits that they need to put back to work in real estate and mortgage loans.

Friends & Family

Many of the people in your life are currently also eagerly and urgently looking for ways to protect their money from failing banks, a declining stock market, and poorly performing retirement accounts. All while trying to find ways to avoid recent tax hikes and new taxes, while trying to keep up with extreme inflation.

You can help them by putting their money to work, and giving them strong returns.

Grants & Awards

If you are interested in interest free and non-dilutive capital then look around at the various grant programs and competitions available.

You may find additional funds that don’t have to be paid back. Which can also help build your credibility.

Transactional Funding

Perhaps easiest and most efficient of all is transactional funding for your wholesale real estate deals.

Best Transaction Funding can provide 100% financing for your deals, at low rates, and keep your business and income flowing smoothly during these times.

 

Here are the factors real estate wholesalers should be monitoring as they plan acquisitions and marketing campaigns now.

The Supply Chain

Manipulated or just messed up, the average US household is finding supply chain pains and disruptions very real.

Some are ignoring it and hoping it passes. Others are stressed about it. Some are finding it painful as they can’t find their kids’ favorite foods and the end of year holiday season is a big question mark.

In real estate it means that some construction materials are not available. Furniture is hard to come by, and orders placed are not guaranteed to arrive. Rehabs are taking longer than normal. Fewer new homes will be coming to market.

The Second & Third Home Market Is Growing

According to Bloomberg the demand for second and third homes is growing. This can be a great niche for wholesalers to target. One which is often rich with qualified buyers who aren’t price sensitive.

The New Recession

Some analysts are arguing that by the time the next set of economic data comes out it will reveal that we’ve already entered a new recession. They are mostly basing this on what they see as the leading indicator of falling consumer sentiment.

While the majority of mainstream data being published shows the economy is growing, while mortgage forbearances decline and unemployment is low, it is important for investors to seek out the raw data to draw their own common sense conclusions as well.

On the bright side, recessions are a great time for real estate wholesalers to find distressed inventory.

Though any new stimulus and new policies could easily mask a dip or extend the current run up.

Warp Speed Inflation

Those making less than $250,0000 are probably feeling the impact of rampant inflation already. It is at the grocery store, the gas station, and in the tax bills. There is no sign of it slowing.

The good news is that real estate keeps growing faster than inflation. That includes house prices and rents. Many of which are up 50% to 70% this year alone.

Liquidity & Credit

How fast things can continue to grow versus running into a financial crunch depends a lot on credit markets. This includes interest rates, international credit, and mortgage availability. Some markets have been seeing close to 60% of home sales going to cash buyers already. Financing is essential to keep things moving. Right now that money is available. Especially for real estate wholesalers. Take advantage of it.

 

At least five new notable changes could be set to fuel the recent real estate bull run even further. If you thought we might be peaking, or have felt prices are a bit too high, these happenings could drive even more action over the next year…

CDC Eviction Ban Ruled Unconstitutional

Two judges have recently ruled that the CDC overstepped its authority with its COVID related ban on evictions. One of them called it unconstitutional. This doesn’t mean that every foreclosure and eviction will now go through overnight, and the CDC is sure to appeal to avoid bankrupting financial losses. Yet, it is a great step in the right direction for landlords and other real estate professionals and businesses that provide them with inventory.

More Government Paid Housing

New changes to HUD housing vouchers are not only injecting an extra $5B in funding into the program, but are also waiving requirements so that the government can pay the rent, even if renters can’t prove their identity or residency status. Fox Business reports that only around 20% of those eligible are currently receiving the help. Under the expanded voucher program, renters are supposed to be able to forward these government payments to any landlord who will accept them. For landlords too scared to take on cash tenants, this could certainly revive the market.

Mass Rezoning To Boost Property Value

New legislation is being used to undo and eliminate exclusive single family home zoning. In favor of making every parcel of land eligible to build multifamily apartments, including in the suburbs. This dramatic change could fuel a massive flurry of new development, and greatly changing the value of lots that single family homes sit on now.

Lenders Easing Up Access To Credit

The Fed reports 27% of banks are easing their lending requirements for credit cards, and 17% are making it easier to get car loans. Traditional banks appear to be starved of growth in their lending businesses after tightening last year, and burning many customers when they wanted help the most. Some like JP Morgan Chase are saying they will even offer credit without credit scores.

The Bubble Is Popping In Other Asset Classes

On May 19th 2021 Bitcoin investors lost almost half of their portfolio values in a single day as the price crashed. Similar hits were seen across other cryptocurrencies, including Dogecoin. Then there is also the anticipated correction in the SPAC market and public stocks. Except another big rush of capital to the safety of real estate as investors see the data.

 

Google Ads is changing its rules. How is it affecting real estate wholesalers, other investors and agents and lenders?

Google has announced new advertising and ad targeting rules which will kick in over the next few weeks. This could shut down any existing ads and PPC or CPM ad campaigns you are running and impact your plans for future campaigns. What do you need to know? What are the alternatives? How can you still run effective and profitable Google Ads campaigns with these changes?

The New Rules for Advertising Online

Google issued new policies for advertising on August 18th 2020 which go into effect by October.

The rule changes are heralded as a step towards decreasing the chances of discrimination. Though they may also make online advertising more expensive and prohibitive for small businesses and individual advertisers.

These changes specifically target those advertising anything to do with housing, employment and credit.

The bottom line is that you will no longer be able to use ad targeting filters to reach customers and prospects by:

• Geographic zip code

• Parental status

• Marital status

• Gender

• Age

Facebook and Google have also already been limiting other features, such as filtering and targeting by income levels.

How These New Rules Impact You

As of October 2020 any current ads and campaigns with these targeting features will be shut down by Google.

You can still run ads for buying houses, selling houses, private lending, owner financing and renting. You will just be very limited on targeting. Which means you’ll have to run much broader campaigns which run to many irrelevant viewers and consumers. Total ad cost and cost per lead could then skyrocket. Especially when you consider that 25% of your PPC budget can already be eaten up by click fraud.

One day in the future these new rules may actually be deemed discriminatory in themselves due to turning the tables only in favor of the largest advertisers who can afford to lose millions of dollars, and of course for Google who stands to benefit from higher ad revenues while delivering less results.

The alternatives are to turn to other forms of marketing, such as inbound Search Engine Marketing (SEO), affiliate and referral marketing and in person networking.

The Keys To Creating Effective Google Ad Campaigns

On the bright side, these top of the funnel ad targeting issues are only a small part of running a successful and profitable Google Ad campaign.

You can still relatively easily and inexpensively drive plenty of traffic to your real estate website. Where the difference is all made in actually getting real leads, deals and dollars is in:

• A mobile first website designed to both look great and maximize conversions

• Instant engagement and strong follow up

• Consistency

As you adjust to keep those wholesale deals flowing, make sure you take advantage of our Verification Of Deposit service to get your offers accepted.