The book I’m reading right now is called Design Matters: How great design will make people love your company. (In North America it’s called Do You Matter? and you can buy it on Amazon here
The areas they’re talking about in this book and many other similar books are called Interface Design and Customer Experience design. The idea of customer centric design isn’t something we talk about very often in real estate circles, no matter how much we think about our investors. It seems to be particularly problematic in US real estate circles where there’s a significant hard money lending industry. In Canada, there’s a much stronger emphasis on personal or private loans, and most of us experience a closer personal relationship with our investors.
REIN does one of the best jobs I’ve seen for creating an experience out of investing with the Personal Belize exercise. Helping people create a vision of what their goals feel like is an important lesson.
To apply this design/experience mentality to our investors we have to look outside the typical issues we concern ourselves with. This is more than doing your ROI and cash-flow calculations properly. It assumes your management, book-keeping and accounting are figured out.
It’s about how the experience, from purchase to return, feels, smells, sounds and tastes. Approach it from the JV partner’s side:
– How does it make them feel when they receive statements, emails or phone calls from you?
– Does the layout of your emails, statements, letters, website and other marketing create a feeling of unity? Conversely, when you send things out in 3 or 4 different formats/fonts/colours does it create feelings of chaos in your investor?
– Is there an advantage to physically taking your JV partners to the properties? How will those experiences make them feel? Does it fit with their goals? Is it a good use of their time?
Your real estate business is about more than properties and numbers. It’s about relationships and if, like most of us, you don’t have all the money you need, your business should be designed from the perspective of your investor.
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Chris,
Very interesting post.
I think a lot of individual real estate investors do not pay much attention at all to the design of their business.
A friend of mine is a graphic designer and owns his own advertising agency. He lives, eats, and breathes, ‘design’.
Whereas for me, design is often an after-thought.
You are very correct when you say, “It’s all about the experience, from purchase to return.”
If a JV does not have a good experience, or a sub-par experience investing with a real estate investor, chances are they will not re-invest their funds or provide any additional funds to the RE investor.
Regards,
Neil.