HOW YOU DO ANYTHING IS HOW YOU DO EVERYTHING!
We recently attended a great 3 day event hosted by “Flip this house” an HGTV hit sensation, here is what they had to say about the current market, realtors, investors, contractors, mortgage brokers and more.
Deciding to be an entrepreneur will enable you to work in any manner you choose. No boss, no timed lunch and no work on Saturdays.., unless you’re in real estate of course! For everyone thinking they can do more with their real estate license or housing related career, this post will help you drill down on all your options and ways to network with people in your real estate related industry.
Your much needed Business Systems
Systems run businesses. You must first create a solid system and then implement the system in your business infrastructure to be successful. Truly efficient companies have very detailed systems in place. By having a great system in place you can insert new people in your business and remove your self from the day to day grind of project management. This will allow you to run your business without your business running you!
Key Factors to creating a successful system.
6.People and Communication Skills
8.Leadership and Decision Making Capabilities
Action in my opinion is the most crucial of all. If you know how to take action then you can accomplish anything, you must believe you can do. Action separates those who do from those who only dream of doing.
HOW DO YOU BUILD A GREAT SYSTEM AND START USING IT RIGHT NOW?
MARKETING – is the most important step in successful real estate and investing. Lets face it marketing is what makes the phone ring. Remember take action, look at what other agents are doing in the area in which you want to sell homes. If they are doing it, chances are they are making money doing so, other wise you would not continue to see them. Don’t think you have to spend a ton of money to get started. Start small, use your time efficiently and don’t be afraid to ask others Agents or your Broker what is working and what is not. Write all your options down on a piece of paper, the cost and how complex they are to use. Then talk to others in your business, ask their opinion, you will be surprised how much great feedback people will give you from their experience. Most important, just because a certain type of marketing didn’t work for someone else does not mean it will not work for you. Take Action, ask question and then decide the best way to spend your money you have available to market your business and your self. Don’t give up too soon! If you believe in your marketing and you can afford to do it for 6 to 12 months, keep after it, don’t change your strategy and give up too soon. Do not get frustrated and give up If you are not a millionaire after the first 30 days. Consistency is King and it comes down to numbers, eventually you will get traction from your Actions and efforts.
Real Estate is a TEAM Sport!
It’s vital that you surround your self with the right people as it will determine your success and income earning level. Don’t cap out on earnings and success because you do not have a SYSTEM in place to handle your opportunity!
4.Hard Money Lender
5.Private Money Lender
6.Title Company & Title Agent
Now remember all these fields are filled with people that are experts in their area of expertise. You may not know why you need these key people in your immediate Rolodex, but trust us when we say, You Do! Don’t be afraid to call people in these fields of business. If you don’t know why you would need an Insurance Agent in your type of real estate sales, then simply call an Insurance Agent in your area and tell them what your business model is, you plan to bring in new customers and they will tell you how they can help you and even give you examples of trending requests or things you may want to be aware of. This way when you have a potential new customer or lead, and you are asked a question about insurance, you can give your investor an answer it with confidence or inform them that you need to check with your TEAM member – Insurance Broker/Agent that handles all your Insurance related details and you will get right back with them with a specific and relevant answer. Would that make you seem smart and let the investor or potential new client say, wow this agent is really on the ball, they have a team of educated affiliates, etc.. . Providing a little extra knowledge and simply having a plan so you can communicate with your customers will prove to be very helpful and is most times the difference between you getting the lead and earning a new customer for life.
If you do not know where to look for these experts in your area, simply go to google search and type in Real Estate Attorney in ………..”your state” “zip code” etc. Remember call people, take Action, you are not bothering these people, they are waiting for calls each day, they are waiting to tell you how great they are and how they can help you in your business success. Please remember to be polite on the phone and always get right to the point, ask someone how they can help you, and quickly explain to them what your SYSTEM entails and how you are executing it right now!
Broker/Realtor – Are in the business of connecting people with deals. Whether you are looking for properties to buy, sell or lease a real estate professional has a special place on your team. Access to the MLS and knowing how to use it quickly and efficiently can be a great tool in your business model and successful SYSTEM. Remember Agents are out and about all day everyday and are usually in the loop of what’s happening in their area of expertise, use them for their knowledge, they are looking forward to your call!
Realtors that work with a lot of investors can be the key to helping you achieve success. If you have the best property in the area, and know the inside information on the property before anyone else, then you need to act quickly and find a buyer. Investors are great because they are in the business of buying quickly and understand a “good deal”
How do you find Realtors that specialize in working with investors? Call every brokerage in town and ask the office manager which agent specializes in working with investor buyers. Then call these agents and set up a phone appointment or lunch meeting. Let them know that you want to add them to your TEAM as a potential contact when you have a great deal, and in turn they may even push some of their extra work off to you, in which you can make money. Networking, but remember you must have your SYSTEM in place in advance, so get your contact list stacked with people you have researched and know you can count on in business situations. It sounds easy, and it is and once you have everyone in your SYSTEM available to you, you will see how you start to ask people additional questions, and your business will start to grow and so will your understanding of other fields related to your business expertise, which will inevitably lead to more success.
Real Estate Attorney – A real estate Attorney will be one of your most important members of your team and you will rely on him or her for many real estate related issues. An Attorney will always play in with larger deals, and if you’re using your SYSTEM there is not reason that your business won’t grow and larger deals inevitably present them self. Larger deals can be the difference between being an ordinary Agent and the leader of your industry. Real Estate Attorney many times are great people to network with as well, bring them a new client and usually they will return the favor. Build your network define your SYSTEM and you will be surprised how much your business will grow.
Mortgage Broker – A mortgage broker is the middle man and point-of-contact between a buyer and their lender. Usually mortgage brokers have established relationships with many different banks and have knowledge about numerous funding options available for your buyers. If you don’t understand the significance of the key industry leaders we have mentioned and are not sure how they apply to you and your business, then you are the exact type of person that should be calling these other professionals in your area, explain what you do and asking them how they can help you grow your business. Mortgage brokers are different then Hard Money Lenders, in the sense that Mortgage Brokers primarily work with traditional (conventional) banks who will only lend on certain types of properties. The benefit of going with a traditional bank is that conventional financing offers lower interest rates, longer financing terms, and won’t require as many points in contrast to hard money lenders. Also, traditional banks, depending on the borrower’s credit score, will also require less of a down payment (15% or less depending on credit scores) in comparison to most hard money lenders. WHY CAN YOUR MORTGAGE BROKER BECOME THE MOST IMPORTANT MEMBER OF YOUR TEAM? Mainly because the mortgage broker is directly responsible for cashing you out of the transaction. Often times their performance will determine how quickly and how often you get paid. Keep this in mind when interviewing a mortgage broker to add to your team and SYSTEM.
Hard Money Lender – Is an individual or company who lends money to rehabbers to purchase and rehabilitate dilapidated properties. They are called hard money lenders because they money they loan is not cheap. Hard money lenders have created a niche for themselves funding deals most traditional banks shy away from. They make up for this additional risk by charging a higher interest rate and more points to the borrower. Hard money lenders will also fund deals in a timely manner as compared to traditional banks. A good hard money lender can usually fund a deal in 7-14 days where most traditional banks take between 21-28 days. If you do not know how to find a hard money lender, ask other industry leaders in your area or google Hard Money Lenders in……”your state” “zip code”, etc.
Private Money Lenders – Private money lenders are an important contact for wholesale real estate sales. They provide short-term financing between the purchase and sale of properties. You can use Private money lenders to fund a purchase then pay them off when a property sells. You can also solicit Private money by asking people if they would like to self direct their IRA for real estate investing. Currently most IRA accounts are CD’s are paying below 4% annually. If you can guarantee someone 10 to 12% on their investment annually, then you will most likely have a satisfied customer. This is also a great way to build your network. If you make someone 10% on their money, chances are they are going to tell a friend or family member, that will also invest or self direct their IRA. There are companies set up specifically to help people self direct their IRA accounts for real estate investing.
Title Company & Title Agent – If you use title companies to close real estate transactions in your state then it is imperative you find one that understands creative closing and is responsive to your particular needs. Title companies are great because they are neutral to both parties and follow the closing instructions provided by those parties in writing. A creative and knowledge able Title agent will help you with Assigning a property and actually closing it in your name and going on title. When you assign a property there is only one HUD-1 Settlement Statement recorded which can work to your advantage if there is ever a potential problem with the property or investigation down the way. The down fall to only one HUD-1 settlement statement is it shows the amount of money that everyone is making, often times this can kill a deal, if one party thinks the middle man is getting too much money for their part. A double closing, will negate this problem all together by having two separate HUD-1 settlement statements, however you need to have a Title Agent that is familiar with this process and will explain the procedure to you.
Contractor – It’s been my experience that often times successful contractors turn into real estate investors, buyers and/or sellers. Referring a Contractor work can always add up to a win win for both parties. The Three main contractors you should seek out and add to your team and SYSTEM are 1. Clean out, 2. Demo, 3. General Contractor.
YOUR CLEAN OUT CREW/DEMOLITION CREW – Knowing a crew of guys that can clean out a wholesale or distressed properties will be very important for your investors. Agents usually don’t take the time to find a good clean out crew and end up paying more to a General Contractor that subs the work out anyway. The only difference between a clean out crew and demolition crew is the amount of work to be performed. As you become familiar with pricing and work needed to be done you will quickly learn the importance of each of these type of entity’s.
GENERAL CONTRACTING CREW – Often times an investor that wants to buy your wholesale or investment property can not see the potential or does not have the experience or expertise to realize a great investment staring them right in the face. Usually General Contractors can ease their nerves and even show them similar or previous real estate transaction where a little bit of contracting went a long way in the net profit on a transaction. Make sure a General Contractor is Licensed and Bonded in the state in which they intend on performing any work and make them fill out a term sheet which lists all the repairs, expenses and the amount of time a job will take to complete. A good Contractor can make you a lot of money and boost your success very quickly. Take lots of pictures, which you can use to show other potential investors in the future. A picture is worth a thousand words!
Insurance Agent – Your insurance agent is a minor player with a major role. The reason he or she is a vital part of your team is they will be your advisor and will cover your butt if a major catastrophe occurs with one of your real estate properties. Understanding the insurance part of real estate will also help you inform your clients more efficiently, which will make you appear more knowledgeable and ultimately bring you greater success.