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Is Real Estate and Multi-Level Marketing (Pyramid) a good combination??

Aloha Fellow Rainers,

I was recently approached by a Realtor about this concept of Real Estate MLM (Multi-Level Marketing). From what I hear this combination is pretty new to Hawaii, but has been growing nationwide.

Has anyone had any experience with this? If you have:

1) What has the consumers response been to this type of selling?

2) As Realtor's do you folks see this as legitimate competition or is do you feel it taints the industry?

I would appreciate hearing some opinions about MLM before I consider sending referrals to these type of Realtors.

Thank you for your help!

Pete

*MLM: Companies like Quixtar, Amway, Arbonne, Herbalife, etc. "Pyramids" Recruiting people to be your downline to sell under you, having them recruit people under them, etc. The higher in the pyramid, the more money you make.

Posted by Pete Castillejos - Hawaii Mortgage Loan and Refinance on 04/29/2007 04:52 AM

Comments (7)

multi level marketing

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7 Comments on Is Real Estate and Multi-Level Marketing (Pyramid) a good combination??

APR

2007

I have written several posts about doing multiple services. Selling real estate and doing loans is a bad plan.

I am sure multi-level marketing may be attractive to those that are not so successful selling homes.

What is multi level in real estate? I haven't heard of this. The only familiarity I have with MLM is the old scam mlm, talking people into purchasing useless things for the purpose of getting them to talk people into useless things, with the end result being a residual or something. New to me- but the mlm would make me RUN! If I'd run, you might want to call it something else, because I wouldn't buy a house or get a loan from someone in a multi level marketing situation...

I agree with Laurie, I would also run for the same reason.

Randy - I agree. LO's and Agents are better off doing one or the other.

Laurie- Yes, it's exactly the MLM you are thinking of, and they combined it with Real Esate... so the more Agents you have selling under you, the more you get paid off a portion of their commission. I heard there are Lenders that do this too. I feel the same as you about MLM, so I'm not sure it would fly in Real Esate either.

I have seen organizations that make this really work. There is a franchise in my area that does loans as well, but they operate in their own space and for all intents and purposes they are seperate entities. However, they have very effective links via a share outlook server, messaging sytsem, etc. This allows them to work well together and I have seen it work to the benefit of deals where this ability to work together easily really paid off.

I have also not detected any heavy handed pushing of their "in house" loan folks. In fact, I know that agents in that office will often refer buyers to two or three loan folks where maybe one of them is from that associated office. So clearly, there is no commandment from the boss that all clients need to be pointed to their own loan folks exclusively.

On the flip side, I have seen organizations where the internal loan folks are heavily pushed - creating a situation that smells actionable to me.

In short, I think it depends on how the services are offered.

Robert - I apologize if I wasn't clear. What I am referring to with Multi-Level Marketing are companies like Amway, Quixtar, Herbalife, etc. where people "recruit" people to sell products underneath them, often called their "downline". And those people recruit under them, and so on. Pyramid is another term you may have heard. This concept is now being used in Real Estate.

APR

2007

Hey Pete,

I would stay clear from that if it's associated with MLM. Went to check out one that involved our industry. I was invited by a friend and I was curious to see how they structured things. Through all the rah rah I was sitting there shaking my head. I could see how were doing things and guess what the main thing they pushed...Option ARMS. To them it was great for any situation and were selling the would be new recruits on the low payment.

Call me sometime, we can go to lunch.

Sean

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