Ep 17: How Real Estate Agents Survive the Unavoidable Tidal Wave of Change
For far too long real estate agents have been focused on commissions over what matters most, creating value for their clients in a way only local real estate agents can.
There's a tidal wave of change coming for real estate agents in the form of iBuyer, along with the added bonus of class action lawsuits.
Today on the VDI Podcast, Tim Murphy and Bob Grand are going to explore both from the perspective of a veteran real estate agent.
They will share details of the problems, and the solutions to surviving the storm ahead.
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In This Episode (timed with Video)….
00:00 Tim sets up the storm ahead for real estate agents
5:29 Why you have to respect Zillow
8:58 But what about the everyday agent, the agent that has built a business locally. How to think through the next step
12:45 The trap of the class action lawsuit
13:52 Why the class action lawsuit is a timing mechanism
16:20 Is the future of real estate set up like a car dealer?
20:01 The biggest eye-opening moment with iBuyer -- the fees!
21:40 How real estate agents can set themselves up to beat this system
The Value Driven Investor Podcast is produced by Digital Legend Media in Minneapolis. #BuildYourLegend at www.digitallegendmedia.com
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Full Transcript
Tim Murphy 0:00
We're back on the value driven investor podcast. And today we are talking about a hot topic, a sensitive topic, real estate agents. Change is inevitable. But there's a better way. And what am I talking about? Today I'm talking about that tsunami that's out there in the ocean. If you live out in Florida, or in the keys, and you know what's coming, like you can see it, you can see it on the horizon. But you don't know if it's gonna make it to you or not. But if it does, oh, what if? What if it does, because by becoming a value investor, you're going to be focused on delivering value to your clients. That's the difference. That's how we're going to survive the change and disruption happening in our industry. And that's why Bob and I have gotten on the value driven investor podcast, to let everybody know, today, we're aware, we see what's coming. We've been agents for me for 17 years. And Bob, for a hell of a long time, too. We see what's coming. And we've prepared for that tsunami, we're building our shelter. We're getting ready. Because we want to survive the change the disruption in our industry. For far too long real estate agents have been focused on one thing, commissions, and instead of being focused on what matters most creating value for their clients, in a way, only we as local real estate agents can. When I think about the tidal wave that's coming our way I think about two disruptions that are happening, disruptions that are shaking, real estate agents to the core. Number one, ibuyers, big tech companies trying to make the real estate transaction frictionless. Everybody's talking about the ibuyer, the ibuyer isn't new. It's newer. They've been around the open doors, the zelos. They're trying to figure out, how do we disrupt the real estate agent? the real estate industry? How do we make the transaction frictionless, which will then be a value proposition to the seller. And then number two, the class action lawsuit. If you're a real estate agent out there, and you don't know about this class action lawsuit that's out there, you better start doing your homework, because at the end of the day, the class action lawsuit is basically trying to ruin the integrity of the real estate agent by saying that we are inflating our Commission's that we are not giving the buyer a fair shake, because and that we're giving making the seller pay an inflated commission, which is then creating an inflated price. And at the end of the day, everybody's saying, Man, are they really worth it? What if What if we separate this? Can we negotiate the commission? If I'm a buyer, can I reduce the final sale price on my house so that it's more saleable? If I'm the seller? Why, as a seller, do I have to pay the buyer's agent commission? I get it. These are all confusing topics for the consumer, and the consumer deserves to know. But at the end of the day, the real question that we ask is, is big tech in the ibuyer? Or is this class action lawsuit and ruffling the feathers of the current real estate commission system really necessary? Or is it really better? Because really, at the end of the day, these two disruptors are focused on destroying the credibility of the real estate. These two disruptors are focused on diminishing the value real estate agents bring to their clients, in turn, destroying the value proposition agents can provide to justify the Commission's they earn. So where does this leave us real estate agents. When it comes to planning for the future? Everyone thinks we are overpaid. Everyone thinks we are making the transaction more complicated and confusing than it needs to be. Everyone, especially in today's low inventory market is wondering why they even need a real estate agent when they can just sell or buy a home on their own.
What do we have to say about that? grando. Again, it's always awesome having you on buddy. But this is a hot topic. And I really think that we have to address it as real estate agents. Yeah. And I think we also really have to address it because you and I look at number one, we don't even look at it. As real estate agents anymore, but we are licensed. And we do live in that community. And we do care about that community. Yeah, for sure. But at the end of the day, our plan our way is just different. So let's circle back man, I want your insight on the ibuyer and the class action lawsuit like how what are you hearing? What are you seeing? What are your thoughts on it? Because every day, we are consumed with these two topics, especially the ibuyer topic, and like, how do we survive that title?
Bob Grand 5:29
Yeah, I mean, you know, if the whole ibuyer thing and looking at the market, there's there's always, you know, efficiencies that can be added to markets, right. And ibuyer could be one of those efficiencies that helps streamline the process for some people, and the real estate industry. In the ibuyer world, much like probably like the Zillow world, but you know, you have to respect Zillow, they actually, they do hold their agency license and stuff like that now, so they're moving in that direction, they also offer the service of ibuyer, it's not much different than your I that come in and also make a cash offer. There's one big difference though, they typically make really obscene, you know, high or market priced offers, and then then back their way into some fees and stuff like that. So with the whole ibuyer thing, I think, you know, will it take over the market? Is it going to end everything for real estate agents? I don't really think so. Just because I think that with any of those types of systems, it's really hard for some people to be able to utilize them. It only fits a certain criteria. I can't imagine Zilla going out and buying a $2 million home and saying, Yeah, we got another good one, we did a cash buyer on this. I mean, who would hold in their right mind a $2 million property, make the buy let you out of it. If they do do something like that, you have to be questioning what you're giving up. You know. And so I would argue that if you sold your nice big home to Zillow, that they would probably be benefiting somehow in a large way, right or one of the other ibuyer service. I don't want to say Zillow or anything like that. There's a lot of them out there. There's a lot of big national ones that are popping up and around the area. They're not in every market. They're typically in dense markets, where they can actually go in and really calculate the ARV, or the sales price of homes, or that the market the current market values of homes. So it's it's definitely interesting, definitely a little concerning, you know, out there on the horizon, but it's started a few years ago, and I really haven't. I mean, it's, it's there and it's kind of out there, but I don't feel like it's got this massive set of legs yet to take off. But, you know, in 2008, you know, I guess is probably when like Redfin, Zillow, Trulia realtor.com, all really got online and started kind of manipulating and reworking how MLS was, and then that kind of took over. So I think there's possibility with it, you know, but also, I think these are like hot market issues, right? You know how easy it is to sell a home in a hot market. It's really easy, right? But I don't know, Tim, you probably remember back in 2012 2013. It was really hard to sell a home, like really hard to sell a home. It was a buyer's market. And I was helping people make some good purchases on stuff. But also man listings weren't my thing. Like I was like, I don't want a listing, because it's kind of a pain in the butt right now. So in a hot market, I think that that's These are great topics to talk about, oh, the agents are getting paid too much commission. Oh, I buyer. You know, this is a big topic, but it's a hot market. And so I feel like a lot of these things go away. The second we have a market switch, I buyer definitely isn't paying market value in a market switch. I tell you that. Yeah, they do. They're crazy. Because they're gonna be out of business, a few months, class action lawsuits will go away, because there'll be begging for real estate agents to come in there and work their butts off to get a home sold. And there's a lot that goes into selling a house that I think a lot of people miss, you know, and don't quite understand it. And it is a local networked community with most real estate agents to kind of get those things done.
Tim Murphy 8:58
So let's think about the small people like me and you, right, let's think about the agents out there that are trying to make a living and feed their family. How can we help them think through this? What do you think the ibuyer is really thinking because Zillow back in the day, when they first started, it was a website. Nobody even knew what the website was. I remember picking it up going like what the hell is this thing? And that was a long time ago. I don't know how many years ago it was like 20 years ago, like what the hell is this thing? And then it was all about I read about all while thereafter SEO the owner is just a genius on SEO. He already went public with one company now he's gonna take that and and it's gonna all be about SEO, and it's just gonna be about content, right? And it was about content for years. And then all sudden, I was like, Oh, wait, no sudden they're getting listings on there. And then it was about data. And then it was about this. And then remember, zestimate came out here like is this zestimate like people like what's the zestimate? It's like, Dude, don't even look at that. It's so often because they didn't have the data. Well, now they have some more bet. They have a lot better data. They are Starting to make a big impact. They just got their broker's license and how many different states, they are essentially going to become a broker. They are a broker, they have lead generation, they have all this stuff, they basically, because we just handed it to them, oh, here's all our data, here's all our listings, here's everything you want, because you guys are gonna be nice to us. And now here we are today. Well, the ibuyer is Zillow. Five years after that website launched six years after that website launched, what are your thoughts of like, where are they going to be in the next 1015 years? Like, what is their real game that they're playing?
Unknown Speaker 10:35
Yeah, well, I think the real game is to consolidate a market and add efficiency to it, right? I mean, that's what technology does to markets. It's no different than, you know, back in the day, when, you know, the steel conglomerates, you know, consolidate all together to control the steel pricing, right? So if you can control massive markets, especially home markets, then you can control home values, essentially, if you get that big and can do that. I mean, they're a huge, huge company. I don't think they've actually posted a profit yet ever since they've been there. So they're just maybe they have been a few years ago, they haven't even been profitable. Right. But Amazon wasn't profitable for a long time, either.
Tim Murphy 11:13
Most tech companies are profitable. Yeah.
Unknown Speaker 11:16
Yeah. And I mean, and he sells a lot of trinkets online on Amazon. So imagine if you can control a massive amount of homes in the United States, you know, and that, I think, is probably one of the big, you know, outliers out there, can they and it's no different that we look at as an investor, they get this home, okay, what's what mold fits for it right? Like, are we going to take this kick it over? Is this going to be an Airbnb for Zillow? Boom, that's an Airbnb for Zillow. Are we gonna own this apartment complex or whatever like this? I mean, acquisition and real estate's no different. That's an age old principle. They're just trying to create efficiency to a market. And with that efficiency, it'll push people out, right? Because with efficiency comes consolidation. And with all those things, like, you know, the the prices of stuff that you get paid for a commission will go down, you know, so, when that happens, and I already see it with like, you know, red fin, you know, in in the area that we're in, they just dropped into this area in my market and Eugene, and I see the red fin listings, because I use Redfin now. And you'll see like this, and you'll see their buyer's agent Commission's like, 2%. You know, I think they're having a hard time selling those homes, because agents look at commissions, I want to know how much I'm getting paid. I've just worked for three months and lost 50 offers, you don't want a home, and then you go walk into a red pen home, you see, like, 2% like, I'm getting paid to pretend to work in these people for freakin four months, I've lost all these deals, because we're getting outbid by 50 $60,000. Like, what do you think the agents motivation would be to push that property? I think it'd be pretty slim.
Tim Murphy 12:45
Is that anyway, stop there, because you literally just walked into the trap of the class action lawsuit, because that's what they're saying. They're saying agents are the only ones that know what the advertised commission is, which, like you said, red fins only advertised advertised. And so the class action lawsuit saying, well, the consumer should know what the commission is being offered to the agent, or the consumer should just be able to negotiate whatever commission they want. And it shouldn't be attached to the listing. So let's just you just jumped in there, like let's bounce around her like, okay, let's talk about that. Like, is that right? Or Is that wrong? Well, I
Unknown Speaker 13:24
think it's livelihood, right. And so I think that, I mean, you can't tell me that you're going to go into your job. And if they said, Hey, we're going to give you a $15,000 pay cut, that you're going to be happy. You know, if you work 40 hours a week, you're not going to be happy if they said hey, but you know, good news, you still have a job and it's exact same job you did before. We're gonna expect you to do the exact same thing when you go back to the class action lawsuit. I believe Commission's should be transparent. Across the board. I fundamentally agree with that
Tim Murphy 13:52
the class action lawsuit is a timing mechanism. And in reality, whether they change it or don't change it, I really don't think it matters. I think at the end of the day, what matters is the value proposition. If you have a true value proposition, and you are a true expert, people do not one thing I can tell you as people value expertise, if you're an attorney, and you're the best attorney, I'm gonna pay you if you're a doctor, and you're the best doctor, I'm gonna pay you if you're a builder, and you're the best builder I'm gonna pay you. I really do see and feel and and and, and you've I've been told that you deliver everything that you're worth, well, then I want you on my team I because I can't do everything. I can't be everything to everything, everybody, you know, including myself, like, I don't go fix my own car because that's not what I'm good at. I'll pay somebody to fix my own car. It's called return on time. I know. So at the end of the day, if people feel that you have the value, they're gonna pay you so class action lawsuit or no class action lawsuit, who cares? Like if you have the value somebody is going to pay because you're the pro and it comes through And it will, if I screw it up, it could cost me 1000s and 1000s of dollars. So yeah, I want you on the team, you know, Tim Murphy, Bob grant. So I'm not really too worried about that class action lawsuit. I'm glad we went down that route though. The ibuyer though, let's circle back to the sidebar, because I still want to give me your insight on like, what's the real game? These guys are after? Like, where do you think they'll be sitting in 20 years, like Zillow sitting right now basically taking over as a broker? Well, I
Bob Grand 15:30
mean, you know, one of the things that I think is like, where are they going to make their money if they're paying market value, right, it's gonna have to be off additional things like providing the mortgage, providing the home inspection, providing all these services, right. And that's, like, where I think it's kind of like, where the industry could be heading. But ultimately, like, I think, like, we were talking about this earlier, you know, the car industry, you no longer really, typically negotiate much for a car, you see this price, maybe it's 1000, or two different, and that's about it. But there's no true negotiation haggling, like used to, and so that markets pretty much in consolidation, and it's becoming more efficient, where you buy them online and stuff like that. So
Tim Murphy 16:09
that's kind of one example. But um, how is the car How is the car dealer now making money off of additional services, right? fixing your car off of all that's
Unknown Speaker 16:20
gonna sell you a maintenance package for the next five years, because they're selling you the car at a discount so they can buy your relationship. And then the fact that you have this warranty that and but you got, if you have the words, you have to bring it into us, otherwise, the warranty is void. So then now you bring it into us, we prove that you can trust us. And that trust and consistency creates relationship and the relationship has the value, right? car sales is basically like they're trying to kind of implement those types of models into the real estate industry, which I think is interesting. And when we were talking, I was thinking back about a client that we helped them sell their home and they said hey, and they're in the the Portland market, North Eugene. So they do have the IR buyer service there, well, baked into the price that I buyer gave him market value price, but baked into that was a $70,000 fee. Now it was like sitting there adding it up. It's like a $70,000 ibuyer fee. Yeah, way more than the real estate commission. So I was like, I had to I go, you gotta send me that's like, and I was trying to look it up. So I could have if this thing, but um, I was like looking at it. And I was shocked. I was like, Oh my god, they're basically using a car sales approach where it's like, Don't look at this. Yeah, we'll give you your price you want. That's your price that you want. We got you there. Now here are the fees associated with getting your price. But what gave you your price price is most important, right? That's what you want it? Yeah, I want my price so that way, but Oh, it shouldn't be really what price you want should be I want to net this, you know, I want.
Tim Murphy 17:46
And it's what we tell buyers all the time, yes, quit focusing on the interest rate, focus on your payment. Because if you build in all these ancillaries, your payment could be ridiculous. relative to your interest rate. I always tell buyers, I'm like, Okay, I'm going to give you and this is the best test. When you know, if a buyer knows what they're doing, I sit down with a buyer and I say this, I say, Hey, I'm going to give you a 2.8 or no 2.75 interest rate, and your payments going to be $3,000 for a $200,000 house, or I'm going to give you a 10% interest rate and your payments going to be 12 $100 for a $200,000 house, which one are you going to take? And everybody's like, what? Well, I'm going to take the 2.75% and you're going to take a $3,000 $1,000 payment for $200,000 house? Well, I don't know what should I do? What should I do Murph? And I'm like, you should take the 10% and the cheaper payment because over the life of the loan, that's the payment. That's what you're gonna pay for the house. Oh my gosh, okay, okay, well, then I'm gonna take the payment. Exactly. That's exactly the point is it's a bait and switch. Like it's trying to continually just like trying to get a Verizon phone plan. I mean, I went to Verizon the other day, and I was like, Are you kidding me? Why does this have to be so complicated? Like literally, I needed MIT to figure out what my Verizon phone plan should be. That's what that's what open door. And that's what Zillow I buyers are trying to do. They're trying to say, Well, what does it What does the customer want? Customers focus on price? Well, then we'll give them price. Because you know, what's even greater about that is that if we can do that price, it's going to look like we actually paid more for the property than we really want to pay for the property. So then on the tax record, like in my market, the tax record is reflective of the price, but they don't know the tax record doesn't know that the HUD has all these deductions that went from the, you know, call it $300,000 price, minus 70 G's on the HUD, and the net was only 230. Well, that doesn't show on their tax record. So all the new consumer that comes out says, Oh, well look at they look what they paid $300,000 Well, gosh, that was a fair price. Like and now Zillow is like, yeah, that's awesome because now they don't know what we really got it for. Is it net value,
Bob Grand 20:01
exactly those fees, everything that's hidden and baked into it. That was that was probably the biggest eye opening thing for me is seeing that level of fees built into it. And maybe there's still some ability to adjust. Like, they threw that out there. It's kind of the first, that first kick over the, you know, fence that or lob the ball back over to say, Hey, here's our offer, and then have them go. Oh, yeah, but then what's the next thing to you? Oh, you don't like 70k? fees? Here? How about we cut this in half? Let's, let's make it 35,000 just 35,000 I buyer fee sound good deal. That's 50%. Right. So it's just a game that you can play with all those things. And, and that's what I hate about the thought process of going down those things. Because I love the real estate market words, I think it's actually pretty efficient. You know, when you look at it, and you're like, you know, listing agent does a current market analysis on a home, they add in, you know, commissions are always up for negotiation, right. So that's always been a thing, you can negotiate your commission, you so that person says, Hey, I'm willing to pay out a 2.5% buyer's agent fee, and I'm willing to pay you a 2.5% listing fee, that'd be a 5%, not a 6%, or a 6.5, or seven, like they like to make out in the news media that you're getting. But you know, with that, so you can do that, that that, that the system goes like that, and then goes from there, then they go through the process of listing it. And then incomes buyer. They know the price of the home, they're looking at the market, everybody's there, that agent says yeah, this is a good value this and that, then they put their money down, they go there, but there's not all this crazy crap baked into it. And it's a very simplistic system. And I think that's probably the thing that they're actually running into Tim, is the fact that it is actually a pretty good system. And they're trying to figure out how they can disrupt it, consolidate it and make it so they can bring all these things. And
Tim Murphy 21:40
I I'm sitting here going, Okay, this conversation is like, you just scrambled my brain, like, what am I even supposed to think? And you know what, that's why this podcast is fantastic. Because that's exactly the point. Between Bob and I, we keep, we could talk about this for three hours. And when you leave the podcast going, what, what the hell happened there. And that's exactly how you're going to feel after the ibuyer walks through your house and scrambles your brain between oh my gosh, they're being so nice. They gave me this purchase price, and then the bait and switch on. Oh, and it's not, it's not a bait and switch because they fully disclose. But as a non educated consumer, you don't really know what you're trying to do here like you don't it's like going to Verizon, you don't really know, am I getting a good deal? Or did they just like completely confused me and I just bought something I shouldn't have bought relative to my my intent and what I wanted. And that's the big thing here. And that circles back to the value driven investor way, our way, Bob grand Tim Murphy, the value driven investor way? Why do I think that will win? I think that will win, because we are taking everything that we just talked about. And we are trying to make it as simple as possible, because the ibuyer has brought in some good things a frictionless transaction, where if the consumer just wants to sell their house, they can, as long as they're happy with the price and they're happy with their net, then they can. Great, that's an awesome thing for the buyers. And I think buyers and consumers love that part of it. If the consumer wants to maximize the value of their property, well in the value driven investor way they can, because we will give them the option to work with us and our team to increase the value of the property through rehabbing the property because that's what we do every single day, we will advise them, we will manage the project, we will do whatever it takes to get them maximum dollars. And they know we can because we've done it for 17 years. So if that's what they want to do, we can help them do that as well and reach maximum equity. Now, how do we get paid, we get paid a commission we get paid for delivering the value, which is an increased return on investment on their property which needs to be remodeled, which needs to be improved to maximize that equity to give them that return on investment. And we get paid to do that. Now the beauty of that is if you're going that route, if you're a consumer and you call Bob dry and say this is what we want to do, well, then you know what we're gonna need to get compensated for that time. The reason that the value investor way is better for us real estate agents is because we have more leverage, we are able to provide more value and this value is stupid obvious. And we are able to create better relationships because in the car industry, that's what they're after is the relationship and the relationship equals trust. And the trust is built on consistency. Okay, I'm going to tell you this, the eye buyer is going to struggle forever to build trust and they're probably never going to have relationship because They're not local, there's this big conglomerate that has this technology. And they have a bunch of people that are just working for them so that they can get paid. They don't truly care about the people, the clients, like Bob, and I do, and all of us real estate agents that are out there that are really doing successful and really care about the people. And that's why we do it is for the people. Okay, and then the other thing is, return on investment. If you want to talk about value, you talk about return on investment, if grandma bought the house at $50,000 in the Dinah, which is my market, and I'm about to buy the house for $400,000 from Grandma, you know, what I can I always say to Grandma, are you sure you don't want me to fix up this house, or maybe even partner with me and build a brand new house, because you know what, I could probably make even more money. And every time she's like, Tim, I'm too old for that. And I'm like, no problem. But that's an option for you. And she's like, you know what, son, this is the perfect thing. This is why I want to work with you. Because you're guiding me through the all my options, not just one option, not just what's best for me. And return on investment equals value, and value equals the value of an investor way. grando. Tell him, tell him what you think. I mean, you've been doing this for so many years to the value to an investor the last two, three years. I mean, it's like a whole new approach to really taking care of our clients,
Bob Grand 26:29
you're leading with the clients best interest first. And I think that's the most important thing you could ever do. In real estate at any level, which you don't see that with a lot of other like people who wholesale or rehab, you know, everybody's a lead, everybody is a lead that they want to get that lead, convert that lead. And if I get 20 leads, I can convert 10% of these people. And I can get four houses. And it's all about the numbers where you know, for us, you know, being in the real estate, you know, agency side of thing. And on the investment side of things. It's not about a lead, it's about their situation, and what's best for them. We've said it multiple times. Yeah, it's about the people. It's like, set up multiple times, like, Hey, you know, you're, you're you don't really have a crazy life factor going on here. One of the top big fives, you know, and you've got some time, why don't we just list your house to sell it on the market? And then, you know, a lot of times they won't want to do that, because I'll have their reasons they'll come up with they're like, No, no, no, I appreciate that. I appreciate that. But I really want to sell it for this, I want to know. And then that also led us down that the thought process of some people just want the convenience and speed of a cash deal. And they're willing to give up money for that, you know, but you know, that's not their best interest, because that's not going to get them the highest and best price and a really hot market and a low market might be a different story, you know, or a buyers market, it might be a different story. So, you know, it's just one of those things leading with the clients best interest and taking that heart verse over anything, and doing the right thing for them regardless, because that's what you should do. And that's exactly what all these ibuyers xolos, all these big corporations getting into that they are liable to their shareholders, they are not liable to you as a consumer. They are just using you to get what they want, which is to keep that wheel going. So they can keep showing the profit going up
Tim Murphy 28:21
the right direction. And that is consistent because Zillow has been giving a story to real estate agents that we care about you. Well now, all these real estate agents that paid Zillow for so many years, are now bailing out from paying Zillow because the leads are crap. Zillow is now becoming a brokerage. Zillow is now going to bring on their own agents. Zillow is now buying properties, which are those agents listings. So the agent doesn't get to list it. Oh, but what we're all about the agent we we care about you consistently. They have not shown us that they care. And the fact that they consistently are taking more and more from us means that how can we trust them? And it also means like, does the relationship really matter to them? See, that's the difference. We go the opposite way we start with the relationship, we build the trust, and the trust is built your consistency just like Bob set, Zillow open door, they're the opposite. They don't need the relationship because they have money. They don't care about the consumer because they care about the property in the transaction and the leverage. It's a business to them, where to value driven investors and the value of an investor way. It's about all about the relationship, all about trust, all about consistency. And what we deliver through our value driven investor way and the processes and the systems that we put together is that return on investment which does equal value, and it equals a value that the eye buyer will never be able to provide for our community. For our people, for our local indro real estate industry, it just won't happen. So, if you if you think that it will, I would love to see how you think that's going to happen, because I just don't think that that's their big game. At the end of the day. I don't think that that's their game. And the other thing I wanted to bring up to support that is that BlackRock, if you haven't heard of BlackRock, they're the biggest investment company out there. I think they have a trillion assets under under management at some ungodly amount. Yeah, they just bought the biggest National Retail home buyer, which owns over 80,000 property, or 80,000. Properties, I don't remember the name of it's like something and they buy property to,
to rent it out on a contract for deed, or rent to own contract. And then BlackRock bought them. And now what I've heard, and I have to verify it, 100%. I've heard that BlackRock is now partnered with open door, and now open door is running around in my market, and I've heard this from other agents. They're running around making offers that are more than what agents think the properties are worth. What. So they're paying over market value. And that's what Bob said, Well, why would they pay over market value? And and I'll tell you, my this is my opinion, only my opinion. They're going to buy it. And they're going to make money somehow, some way, which is probably because they're going to sell it over to BlackRock. Well, why would BlackRock pay? Well, BlackRock would pay it because maybe they believe that inflation is coming. Maybe they believe that that's the best hedge for their $1 trillion in cash, that they need to play someplace. And maybe they believe that when they do an option to buy, or option that Yeah, option to buy to the renter, that they fit into that property. They know what their numbers are. Because they're a big business. They know their margins big enough that they can overpay today. And in five years, when they do that option contract, they're still going to make plenty of margin to make their investors happy. Because like Bob said, all they care about is their investors and the trillion dollars that they have under management. And you know what, that's the game. That's why they can pay more than what the agent would list your house for. Hmm, think about that. That's what's the that's the tidal wave that's coming our way is big business. trillion dollar billion dollar businesses uniting together against us, the people, the common man, the real estate agent, the homeowner, you guys, there's a better way, there's a better way for the homeowner, there's a better way for our clients. And there's a better way for us. And Bob, and I believe it's the value driven investor way. And that's why we are pumped about the podcast. That's where we pumped about this community. That's why we want real estate agents in this community. That's why we want to show real estate agents how to become an investor. That's why we want to show real estate agents how to partner with contractors. And that's how we want to partner in our local communities, with contractors and subcontractors. And Bob said, well, they're gonna find a way to package these deals, and they're going to find a way to add all these ancillaries in there. Well, why can't we find a way? Well, wait, we have found a way, Bob and I have a way where we can partner with contractors and subcontractors, and local vendors. And we can create value out of these properties. And we can can we can buy these properties and control the property. Because at the end of the day, there's one thing that everybody wants the product, the product is the property control, if you control the product, like every listing agent has ever said, since the dawn of time list to last, Tim lists to last. That's what I heard the day I walked into the real estate market. If you want to last in the real estate industry, Tim, you need a list to last. Okay. All right. Well, that means that there's a product and I need to control the product. And if I control the product, then I control everything. Well, why is I buyer overpaying? Hmm, I want everybody out there because we are really advocates of real estate agents. And we are we truly believe and I feel like we've proven it, that we have a way a different way for real estate agents to Yeah, be value driven investors, which is not a real estate agent. But it's actually somebody that people can trust that will deliver value to you, which is true of return on investment in a way that nobody else can. And there's very, very few of us out there, Bob. And I know one thing and that's what real estate agents are thinking right now. And if you're out there and your real estate agent and you're thinking man, I want to know more about that way. Well, then that's what the value investor podcast is all about. That's what this community is all about is that there's a better way for everyone. And if I could sum it up in one way, it's this. It's the people against big tech and the big conglomerates, like Who do you want to win and I thought about this long and hard because it brings me back to 2008 nine and 10 I was doing regular real estate transactions. I just the way everybody else was doing real estate transactions. And then the crash hit. And then there was no listings. And then the only lessons that I saw were foreclosures and short sales. And every real estate agent I talked to is like, I'm like, What is this foreclosures or short sales? Well, I missed the boat on the foreclosure road, because there are smart agents that had been in the business for 10 1520 years. And they signed up with Fannie Mae, Freddie Mac, all the big banks, and they were doing bank on listings. And you know what, good for them. I was late to the I was late to the party. But at the end of the day, I still I think there was a reason for that. Because I said to myself, I said, Do I want to work for the big conglomerate? The banks, or do I want to work for the people? Short Sales? Yeah.
I said, You know what, I want to work for the people. And I busted my ass for five, six years did hundreds of short sales, they sucked, the banks sucked to work with. But you know what, I saved? families and friends, hundreds and hundreds of 1000s of dollars, because I was able to walk them through short sales. Well, you know what, here we go again. Because here we go again. Do I want to work with the conglomerate? The eye buyer? Or do I want to work for the people? I'm going to tell you, I always, always will take the people because that's what I believe in. So we're gonna keep talking about this subject, because this is powerful. And thanks for joining us on the podcast today. See you soon. Thanks for listening to the value driven investor podcast where we lead by giving for more information about our community and what's new visit value driven investor calm. The value driven investor podcast was produced by digital legend media in Minneapolis build your legend, digital legend media.com
Transcribed by https://otter.ai
Digital Legend Media
