Help me make a decision...(serious)

[Michele 1]

I have a serious question to pose, and I need to make a decision by tomorrow at 5 pm...

I am a realtor. One of the hardest things is to find people who are willing to sell their house. There is a website which recently came out to my area, and offered protected zip code leads (protected meaning that only one person can "own" that area, and receives all the leads from the site). I thought it would be interesting to see, and bought an entire zip code 18 days ago. The idea is that someone goes to the website, enters their property information, requests an evaluation of their property, and it is "assigned" to the realtor in that zip code.

Terms of agreement are simple - pay XX and get a guarantee of YY leads. The zip code I bought was guaranteed to produce 2 leads per calendar month. In the 18 days I've been using the system, I've received 8 leads (4x the amount promised). They do not promise that the leads will lead anywhere - that's my job...

I have an opportunity to buy an additional entire zip code, which will effectively lock up nearly 40% or so of my usual community. The lead guarantee is 12 per month.

The cost seems reasonable, and if there are only two deals which get produced in the next 6 months, it will pay for itself and buy the next 6 months' subscription to the same area.

Here's my dilemma. Because I haven't got med insurance, and due to recent medical issues, I've got no ready cash. I've managed to get most of the way out of credit card debt, but to buy this additional zip code, I would have to use the credit card and go back into debt.

Keep in mind that the market is red-hot in my area, even with the holidays approaching. Also remember that each home listed and sold will also result in the purchase of a replacement property (a second commission check), or a referral to another agent in another area (which will result in passive income).

So, in your opinion, should I spend the $$ or not? Elaborate should you choose...

Thanks!!

Ciels-
Michele

~Do Angels keep the dreams we seek
While our hearts lie bleeding?~

[freeflir29 0]

Well....The way you tell it it would most likely pay off. However, I'm an inherently cheap bastard. I would have to see the numbers involved. I'll abstain from voting.

[kai2k1 0]

Its one tough decision Michele. If it were me, as much as i would want to buy it, i think i would stay away from putting myself in to too much debt. If you feel that you can afford it, go for it, if not, i wouldnt.

There's no truer sense of flying than sky diving," Scott Cowan

[skymama 35]

I say go for it. Sometimes you have to spend money to make money. This should also be a business expense that you can write off on your taxes, right?

She is Da Man, and you better not mess with Da Man,
because she will lay some keepdown on you faster than, well, really fast. ~Billvon

[Michele 1]

Quote

This should also be a business expense that you can write off on your taxes, right

Yes...it would. I don't have many of those, so it will help quite a bit.

Ciels-
Michele

~Do Angels keep the dreams we seek
While our hearts lie bleeding?~

[Jib 0]

Just some thoughts... Knowing nothing about the website and its marketing (or future marketing), I'm not sure I can help. Do you think people are actually going to know about it based on their marketing and use it? Are they spending big bucks to buy banner ads and key words? Also, what does the site promise the consumer? Can the cost increase next year -- a lot? I got the impression from one place that in the off chance (wouldn't tell me renewal rates for 1st year) I wanted to renew, I'd pay dearly. Good luck.

--------------------------------------------------
the depth of his depravity sickens me.
-- Jerry Falwell, People v. Larry Flynt

[lawrocket 3]

Go for it, Michelle!!! It's priming the pump, and securing some leads.

Hopefully, it will pay off even better.

My wife is hotter than your wife.

[Greene 0]

I have been a realtor, broker since 1980, I suggest you check all the info you have posted. If it sounds to good to be true, well you know what that means.

If you are a good realtor you will not need any help.

Do it on your own and keep the money for yourself and your firm. Sounds like another ASC scam only with a different twist.

Could it be possible that ASC is also in your area for real estate referrels? :(

[gmanpilot 0]

Michele,

I voted no, I don't like to make decisions on someone elses timetable. Eighteen days does not seem like enough time to evaluate the program. Why the rush to get the other zip code?

_________________________________________
-There's always free cheese in a mouse trap.

[Michele 1]

Jerry, that's my thought...priming the pump is the hardest thing in RE, and with the market anticipated to tighten up next year, I need to look forward to that, and get ready now.

Jib,

Quote

Are they spending big bucks to buy banner ads and key words? Also, what does the site promise the consumer? Can the cost increase next year -- a lot

Great questions.

They are paying for banner ads, but I don't know about key words. It's an established company back east, and is emerging on the west coast. I've seen a handful of spots on the tv for it, as well, during prime time.

What they promise the consumer is that they will receive a competitve market analysis from a licensed, in-good-standing realtor from their community, if available, or the closet realtor to their area which they have. In other words, if they are outside my zipcode, and they need a CMA and I'm the closest realtor, I get the lead. The time guarantee is simply within 3 business days of the request, they will receive, via e-mail, a "mini cma", with the disclosure that the price range is based on comparables in the 'hood but no visual inspection, which may change the price.

As to the cost question, it is a 6 month guarantee, and I suspect that they will up the prices if the areas produce listings....but I don't know that, only that the next 6 months are at a set price.

And just for the record, as I was typing the original post, I received another lead...which makes it 9 in 18 days.

Ciels-
Michele

~Do Angels keep the dreams we seek
While our hearts lie bleeding?~

[Michele 1]

gmanpilot...

Quote

I don't like to make decisions on someone elses timetable

The timetable is actually self imposed, in a way. The area is open, and I've got it "on hold" until tomorrow at 5. No promises to buy, but they've promised to not sell it to someone else until I can make my decision.

There is a "rush", as you say, because there are only 5 zips in my community, and three (including mine) have already been locked in. The 5th one is not a good area at all...lots of government supported housing, and lots of rentals. not a good area for prospecting.

I am struggling with the 18 days eval time, as well...but I also know the area will not be available for very long. There is a distinct possibility that I can negotiate the price, but it will still be an owie for a bit.

Ciels-
Michele

~Do Angels keep the dreams we seek
While our hearts lie bleeding?~

[cloudseeker2001 0]

I vote yes............Let it Roll Baby Roll!

"Some call it heavenly in it's brilliance,
others mean and rueful of the western dream"

[Jib 0]

Is the guarantee 12 leads in 6 months or at least 2 every month for six months? (If they just started advertising, it may be curiousity too or an initial surge that will taper off.) Do any of the nine leads seem to have any promise? Could you verify that the people that contacted you were the owners of the properties?

--------------------------------------------------
the depth of his depravity sickens me.
-- Jerry Falwell, People v. Larry Flynt

[Michele 1]

Quote

If you are a good realtor you will not need any help.

I am an excellent realtor. But I do need help.

In my town, there are nearly 400 realtors working it (over 80 in my office alone). It's a tough market here, as the sellers are not selling, and we have hoards of buyers (interest rates and whatnot).

As for marketing, there are so many marketing campaigns going on - postcards, newsletters, doorknocks, that homeowners are not paying any attention to it, and have been very loud about the "do not call" (which we respected far earlier than it was a law), and so cold/warm calling is out.

I need to develop a name recognition, a face/friend aspect, rather than spending something on the order of $350 mailer per month for a 500 home farm, with a .25% return. I did that for several months, and ran out of money with nothing to show. I can't compete yet with guys like you who have 23 years in the biz...don't have the contacts and don't have the capital...

I am not sure about ASC - can you give me info on it please? - but my brother checked out the company, and it has a great credit rating, a great reputation, and the references checked out (and they were my selections of references, not shills...I got their names from the "forum" area of the webbie, and got their phone numbers there and called...). It's been established for several years (6?), and has no investigations pending that we could determine.

I think it's on the up-an-up, but I've been wrong before.

Thanks for the cautions, though...they are taken to heart.

Ciels-
Michele

~Do Angels keep the dreams we seek
While our hearts lie bleeding?~

[Michele 1]

Quote

Is the guarantee 12 leads in 6 months

Sorry, I wasn't clear.

12 leads per month, which means in a 6 month period, it would bring in 72 leads guaranteed. The promise is if the leads do not come, then that month is divided by the numbers of leads you do get v. the dollars spent, and the cost is adjusted downwards.

Quote

Do any of the nine leads seem to have any promise?

Two came in today, so I haven't got a good feel for them just yet.

From other 7, I have a "good feeling" about 4 of them, and two are simply I dunno. One was someone who said "thanks, leave me alone now", which will happen.

As for the two today, they are decent leads, inasmuch as the location and home. We'll see...

Quote

Could you verify that the people that contacted you were the owners of the properties

From the 9, again, one (the last one just received) has not been developed (my brother is handling that tonight), and only one other was from someone I could not determine if they were the legal owner. The other 7 all check out via the tax rolls and a quick title check (all which can be done at home...yay, internet!!)

I like this kind of questioning. It really helps me think critically about the opportunity.

Ciels-
Michele

~Do Angels keep the dreams we seek
While our hearts lie bleeding?~

[NoShitThereIWas 0]

Michele,

I would say if you have checked this thing out thoroughly and it all boils down to a matter of risk in terms of debt/it not paying itself off ...

I would say, if you think at the very least it will pay for itself go for it, then the only thing you lose is your time and your effort.

And ... if the other zipcode has given you quite a few more leads than expected combined with being a great realtor ... These are all positive reasons of why to move forward. Try and put it into a risk vs. benefit type situation and then decide which one carries more weight and then look to your instinct.

Now the leads you are getting ... are they actual "real" leads? Are any of them panning out or working with you long term?

I would say try it if it feels right Michele but listen to your gut instinct. If somthing pressures you for time to make a hasty decision I would already be weary but then I have been duped by crooks before so I am a little more critical now.

Someone said if it seems too good to be true it almost always is, but if it seems like the numbers and dollar signs speak for themselves, hell go for it. No one gets ahead in this world without taking risks. Any of us Skydivers will tell you that

Roy Bacon: "Elvises, light your fires."

Sting: "Be yourself no matter what they say."

[tbrown 26]

You should do it, even if it means running up the plastique. It is a business investment, and a deductible business expense. What else are you going to do with your money, throw it out an open airplane door ???

Your humble servant.....Professor Gravity !

[Greene 0]

Check with Jan Meyer. Http://www.make it happen.com and searcj fpr Atlanta Skydiving Center.

You would not need their help for skydiving business, nor the people that are "selling" you their services for real estate referrals. You will lose, they will win.

Lee West, real estate broker, and agent since 1980

Skies blue

[Michele 1]

Quote

it all boils down to a matter of risk in terms of debt/it not paying itself off ...

I would say, if you think at the very least it will pay for itself go for it, then the only thing you lose is your time and your effort.

That is what it boils down to. If it doesn't work, well, then I'm out a chunk of cash, but not the write off...

If it only produces 2 deals, it will pay for itself and the interest on the credit card.

if it produces 3 or more deals, then I have profited.

If it produces 4 deals, then I can do it again, if I decide to.

If it produces 5-7 deals, I can pay my Dr. for any additional procedures.

If it produces 8 or more deals, then I get to go on vacation.
I've been trying to think of what it is that bothers me...and it's simply that I am scared of spending that much on something I don't know for sure works. I don't want to be eating ramen for the next 6 months because I made a stupid decision, but I also don't think it's terribly stupid.

I took a cheapie zipcode to test it out...lower house values, less of a guarantee...and it's performed to expectation. I may not have performed to expectation just yet, but I am sure I will convert several of the leads I've got now, or will get soon. Maybe not right now at the holidays (people tend to think it's a bad time to sell....it's not, though)...but in the first of the year.

Sigh...

It looks like most others would take the risk...and I am leaning that way myself. I'm just not sure...

Quote

What else are you going to do with your money, throw it out an open airplane door

Well, yes, that was an option....

Ciels-
Michele

~Do Angels keep the dreams we seek
While our hearts lie bleeding?~

[Deuce 1]

Dunno Michele, BTW I got my test date of December 8.

I think I'd stick with the one you've got and see if it works. If somebody else gets the other one it's 3:1 they're out of the business in two years or less anyhow, right?

Two LA-sized commissions to get square? I'd see how the one is doing first. That's some serious cheddar.

[Michele 1]

{quote]Two LA-sized commissions to get square? I'd see how the one is doing first. That's some serious cheddar.[
/quote]

Yeppers, it is. But don't forget to include the fact that I have a franchise fee off the top (corporate $$), and then I need to split the balance at my commission split level with the office itself, and insurance, and TA fees...so it really isn't all that much all told. More like one whole one (medium sized, at 2.5%), if I were able to keep the whole wheel of cheese...and that's for both zips, not just the one...

As for your test daet, let me know how I can help you, and I'd do almost anything (that Corrine agreed to...) to see you succeed...

Sigh.

Torn between two options, not knowing what to choose....

Ciels-
Michele

~Do Angels keep the dreams we seek
While our hearts lie bleeding?~

[Squeak 17]

Hi Chook, the way I do deals with credit is from a point of failure.

"What if you get NO Deals can you still afford to pay off the debt."

I own 3 properties and the 2 investments were purchased on this pinciple, if all else fails and they do not have tennants, can i afford to maintain payments, and live. The answer is yes so I borrowed the money and bought the 2 properties.


So can you aford to pay off the debt if nothing at all comes from the leads?

Bare in mind that you will gain some back at tax time, but don't use that as a decision maker.

You are not now, nor will you ever be, good enough to not die in this sport (Sparky)
My Life ROCKS!
How's yours doing?

[kryos 0]

You say the market is "red hot" in your area. These people give you guaranteed leads for a set amount of cash. You are the only one to get the leads in a given zip code. You say you've already gotten 4x the amount of leads promised on the one zip code. Tell me, have you converted any of those leads into a listing? A sale? Anything that brings in money?

Evaluate that second part of the equation before making a final decision on purchasing the additional zip code. You are clearly getting more leads that promised, and that's a good thing. But, as you say, are those "leads" leading anywhere? If they are, then you've got a money-making winner on your hands, and I say buy the second zip code ASAP.

Unfortunately, you sometimes you have to spend money to make money. True, credit card debt sucks, but if you really think the proposal is a money-maker ... and from the information you give, it would appear to be, then I say you would be foolish not to spend the money. You can make it a priority to pay off the credit card debt with your earliest proceeds from the investment.

Blue skies and good luck!

--rita

[wingnut 0]

michele,i'm a gambling man myself (keep me away from the craps table) and i would say do it but then again i have always gambled money i could loose (well i could f payed off a credit card with t too though..lol) so go for it or not..... it's a big choice and only you can make it. if it will hopefully help in your goals then go for it...... as some people say here...."go big or go home"..........hahaha see it's a pun.... you can "go big" or well you sell realestate so you can "go home" to...hehehehehe........ best of luck in whatever you decide... and if it's ramen you end up eating well you got a case of em coming your way from me and in clay's tradition a first date special, a super value meal from mcdonald.....

______________________________________
"i have no reader's digest version"

[slotperfect 7]

Based on the immediate results from purchasing your first Zip Code, I would say that buying the second is a worthwhile risk.

On the other hand, living without medical insurance is not, in my opinion, worth the risk.

My advice is to buy the second zip code, setting a goal as to when you will have it paid off, and work hard to close on enough houses to not only make the debt go away, but to make the investment propel your busines and you financial situation forward.

In the meantime, come up with a plan to secure medical insurance for yourself.

Love ya,

Arrive Safely

John