Inexperienced brokers almost certainly lose money when marketing overseas real estate in China

Hard Lessons:

  • Do not spend large sums of money, in advance, for marketing in China
  • Do not throw logic out the window when dealing with China
  • You can win big in the sell to Chinese game 

Brokers are getting ripped off left and right and center in the ‘sell to Chinese’ market. It’s partly their fault for not asking for specific analytic data (Like modern marketing tools like Facebook and Google provide) but most of the blame lands on unscrupulous websites and marketing companies popping up to take their money. It’s sad to see this develop in a market in which I was one of the very first to create.

But on to the story of our hero in this story. A Canadian broker/entrepreneur suddenly called me on a Saturday afternoon 4 years back. It was obvious he was in a rage. It took a few minutes to calm him down, find out who he was and figure out what he was talking about.

Basically had what happened is that he had paid a very famous company a significant upfront fee for a large exhibition space at a Chinese real estate event. He also paid for a massive build up of his booth which was the largest and prominent at a property show in Shanghai. I asked him how he knew my number as I had never talked to him and he obviously hadn’t taken my China Cash Buyers course or he wouldn’t have been in this predicament.

He said that he had watched all my free videos and read my blog posts but hadn’t opted in to the members area where I help brokers one on one. Nope. He was going to do it himself. And wow did he do it!

He paid a total of $115,000 upfront to a company that I won’t mention by name to sell his project at their event. At this point it was water under the bridge and he begged me, “Paul I know I didn’t buy your course but I need your help! Bad! Please come down to help me!”

So I jumped in a cab and headed over to where the event has being held at the previous location where the Shanghai World Expo was held. The first thing I thought as I headed down there was, “what the heck was he thinking picking the middle of a famous Chinese holiday and that terrible location??” and next thing that crossed my mind was, “If he my name and how to reach me from his cell phone at an event, he must have seen my videos: why didn’t he call before blowing his hard earned money??”

It was a sad sight at the event. Just him and a massive, expensive and very empty booth
It was a sad sight at the event. Just him and a massive, expensive and very empty booth

When I got down there, I immediately felt a wave of pity. He was totally alone in this massive hall and standing in the middle of an obviously expensive, massive ridiculous looking event booth. He told me that for the length of the event there had been a total of 1 visitor to his booth and that visitor had gone to every booth and pretended like he was going to buy plenty of real estate. Obviously a plant by the promoter trying to save his skin.

In the old days (before land prices rose in China and people were still poor) at Chinese real estate shows, fake buyers were a very common sight. The first thing we used to do is spot all the fake buyers and weed them out so we made sure to not waste brochures and time talking to them. They were sent by the organizer to beef up the customer presence.

So back to our here here, let’s call him Justin. Justin was angry. In fact I was worried that he was murderous. He had spent all of his companies marketing budget for a massive project and had gotten exactly zero in return except for a kick in the face. I’m not kidding either. He actually asked me if I knew any mafia figures that could rough up the organizer!

I went to work trying to figure out how we could salvage something out of his investment at the same time as I tried to piece together how he could have been ripped off so badly. Before I went down there I researched his background. He seemed intelligent and had obviously been successful in real estate until this point but as I’ve seen so many times before, he was curiously careless when tackling China.

I have no idea why business people throw common sense out the window when dealing with China but more often that not I see an otherwise intelligent human being totally go off the deep end when trying to crack the Chinese market. Why? I have no idea but if I can, I help them avoid such expensive and disastrous mistakes.

In Justin’s case, he had seen the name of the company, which is a large real estate company in China as the sponsor or organizer of the event. However, what he didn’t know is that they were not organizing this event. They are famous for being loosy goosey and allowing their name to be used by people who simply pay a fee. And the person organizing this particular event was famous for ripping off foreign realtors.

Churn and burn. Each event had a whole new cast of characters. Bright eyed and bushy tailed and ready to sell to rich Chinese with suitcases full of nice red RMB. Well at least that’s what they expected. What they got was a sad, protracted, lonely 3 days in which they knew they had been scammed the first hour into the event and it only got worse as the hours….and then the days passed.

Periodically the event organizer would show up and try to cheer the attendees up and most of them would play along because what did they have to lose? Better to pretend like it was good to at least save their pride. And these were real estate agencies from all over the world. Top estate agents from London, Dusseldorf, New York, LA, Sydney…all standing their with egg on their face.

I saw this a hundred times before I started my training company to help these otherwise sane agents to approach the Chinese market in a way that actually had a chance of succeeding. By the end of each event, everyone was drinking beer during the show and trying to pick up the translator girls they had hired. It was water under the bridge and most of them would try to make the best of a bad situation.

Justin was different. I got the feeling he borrowed money or sold a house or something because he seemed to be in a very bad situation. With Justin to be honest, there was nothing I could do in the end. Everything he had done was wrong. Everything he prepared. His brochures. The assets he was trying to sell were not attractive to Chinese at the time. They were presented in a way that, even if there were people there to look at his stuff, they made Chinese run the other direction. And the guy he wanted money back from was well known in Shanghai for being a total scammer. If there is one good thing about this story it’s that I haven’t heard of this particular individual since that event. He made so much money he cashed out before he was physically assaulted is what i figure.

Anyway, I can’t go through all the mistakes now (in my course I do, however) Justin made but will hit on two big ones.
MISTAKE #1: Planning a sales event during Spring Festival
MISTAKE #2: Choosing a location with zero foot traffic (in this case, the middle of a deserted, abandoned ex-Shanghai Expo zone)

Chinese holidays in 2016. Beware, everything changes on these dates
Chinese holidays in 2016. Beware, everything changes on these dates

Here is the Chinese holiday calendar for 2016. For real estate agents wanting to present at an event, I would avoid the green dates as they are national holidays. National Holidays can also be extremely lucrative depending on what you’re selling and where you are selling it but if you’re not sure, then definitely avoid those dates. I would even avoid a week or two before and after them if you want to be sure as many Chinese holidays are not as clear as Western holidays and can drag on way past the official date. Just prior to big holidays, most Chinese are not thinking of making big purchases in my experience. They are thinking of what they want to eat and where they want to go. They are not in the mood for big, serious commitments.

In Justin’s case, the dye was cast before he even called me. His money was spent;  In addition the clock was against us as he called me on Saturday late afternoon and the event ended Sunday noon. Barely enough time to clean up. I’ve been put in difficult situations before and usually come up with a game saver but, even though I dragged in some friends who were open to buying in Canada, at this point, Justin was his own worst enemy. He was crushed. I kept thinking, “if he just would have called me before he came, I could easily have saved the day as his properties were pretty nice actually.” But it wasn’t meant to be.

Watching Justin go, I wondered how much this utter failure of an event would mean in his life. $115,000 USD is significant for any individual in the real estate business. The good news for you reading this is that you don’t have to fork out even $10k for an event or $6,000 for advertising with a property portal with no clear analytical data. These days, just like everywhere else, you can pay per click, 25, 50, 75 cents a click to find buyers. And that low price point combined with the real time data you will receive, will help you to improve your marketing with each day. ie Now, if you do it right, you know what you’re getting yourself into, how much it will cost and why. And you can change along the way. It’s no longer a one and done.

No longer do you need to close your eyes and write a huge check and pray in order to try to reach Chinese investors. And you can work with people like myself that have been in the game for a heck of a long time and have literally seen it all.

When I started selling in China in 1989, it was a different world. I would have 150-200 people follow me around all day just watching me with their mouths wide open. Literally just sitting there all day looking at me. If I went to the bathroom, they came along. If I ate in a restaurant and sat near a window, i could wave to my buddies, all 150 of them, so I never got lonely. Sometimes me and my buddy would count people staring at us for fun. I usually won unfortunately. lol

Those days of me riding my Mao style solid steel military bicycle with burning coal in my bicycle basket (to keep me warm at night) and failing hopelessly to stop my hands from burning as the coal heated up as my bicycle sped up are long gone.

China is a wealthy country now. Chinese real estate passed the USA in value years ago. And Chinese have spent $40,000,000 USD in one city (Vancouver) real estate alone in 2015! And the modern Chinese consumer is sophisticated. To succeed selling real estate to Chinese you need a bit of help. That’s what I do.

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