Michigan Foreclosure Report by Mark Ijlal

I wrote a sweet and short piece on Mark Ijlal’s Top 10 Rules To Eliminate All Fixer Upper and Contractor Headaches in Michigan Foreclosures; sometime ago which no surprise here that is one of the most read posts on Michigan Foreclosure Report.

Apparently 10 Rules are way too much reading for some folks because I get emails, on almost on a daily basis which begin like this: “ Mark I know you said not to do (blank) when fixing foreclosures in Michigan but ………..”

Frankly speaking 95% of new real estate investors invite all the headaches on their own heads when dealing with contractors. I don’t why it is when it comes to contractors even the smartest ones start to act like dopeheads?

The same guy who was walking around with a laptop full of spreadsheets ready to analyze any potential foreclosure deal in Michigan to its death cannot bring himself to ask a contractor to sign a 2 page agreement outlining what they are supposed to do once the rehab starts!

Why? Why? Why?

I cannot come up with even one good excuse for that.

I have members in my Inner Circle who have no absolutely no problems rehabbing more than one house at a time dealing with not one but 2-5 crews without breaking a sweat. Alan Boike, Rita Dalian, Rodney Townsend ... and I am probably forgetting at least a dozen more.

So what they are doing what other investors who buy and sell Michigan foreclosures are not doing?

During our monthly mastermind sessions some big things come up again and again regarding this topic.

Out of which three stands out all the time. Now I would still recommend you print out my previous post on that which is found here as a starting point but here are 3 dirty secrets that will give you high blood pressure if not followed all the time.

If you would like to avoid hair loss, high blood pressure and days filled with rage in your lives as related to contractors trolling around in your Michigan foreclosures doing God knows what then read on:

Dirty Secret #1: They are not your friends anymore as soon as they start fixing your foreclosure:

It does not matter how long you have known the guy “personally” – you have to ask for professional references. There is a difference in between hanging out with somebody, slugging some Buds and watching the game on his big screen plasma. When money is involved, check are being written, deadlines have to be meet – what football teams you both love are not in the picture anymore.

Almost 100% of conversations that are about to tell a sad tale of contractor woes start with – “ I have known the guy for….”

So???

So what if you have known the guy or gal for 10 years? What that has to do with how soon can he get the sidings up on your foreclosure in Oak Park?

You got to ask for references and you got to spend 20 minutes calling these people up and asking these questions:

”Mrs. Jones my name is Mark Ijlal and Brand Jones, owner of Brand New Paint out of Farmington Hills, gave you phone number as a reference. I am thinking about using Brandon to paint my house and wonder if you were happy with him the last time you used him? Did he finish your project on time? Did he go over budget or was everything done in the amount he told initially? Will you hire him again or recommend him to your friends or family?”

That is it – that one strategy will reduce 80% of all drama in your life. You will be surprised on what great excuses people will give you for NOT to give you any references. Run don’t walk away from them if they cannot give you any references.

Dirty Secret #2: Prenup Agreements Are Signed Before You Get Married:

Always use a written agreement that outlines what needs to be fixed, how long will take to fix it, the amount of money that will be needed to fix it etc – Paul Mueller and David Schmidt both Ijlal Inner Circle members made a great agreement that pretty much all of use now when dealing with contractors. Important thing is to give a bonus when they finish on time and whack them with a fine if they don’t. Don’t ever give out all the money (I cant even believe that I have to warn people about this) but rather break it down in 3 or 4 parts. That will reduce another 10% of your contractor drama.

Dirty Secret #3: Greed Is Good as Gordon Gekko Says But No When It Comes To Picking Contractors and Fixing Foreclosures:

Don’t always greed dictate your judgment. Just because somebody cannot give you 3 references and is shifty about signing an agreement with you but since he is also giving you a quote which his less than $5000 than the next guy – you decide to make an exception.

Don’t do it.

This is not a cafeteria where you get to pick and choose what you want to order or not. Either you follow everything or you don’t – but you cannot get results if you decide to do things that you like and skip the rest.

Breaking the rules; being a renegade; doing your own thing sounds sexy to everybody’s ears but I rather have more money in my bank account by following the rules.

Look if you like thrills – take up jumping from planes or tie a bungee around your ankle and jump or go to Cedar Point and ride the coasters up and down. At least you will have some fun doing it. Not following these 3 big rules and my 8-point checklist and then complaining about why the house is taking longer than anticipated to fix is not funny at all.

I will tell ya what I tell all my members all the time – if you are lonely and want a friend – get a dog. Don’t try to turn friends into contractors or contractors into friends – both strategies are a waste of time and money.

A lot of big time builders have reduced their commitment to build high-end subdivisions ($500,000 and up) in the tri-county area recently, which have flooded the market with lots and lots of good quality contractors. Look up Angies List in your area; ask other fellow investors in your Michigan City for referrals but STILL follow these rules.

No exceptions. Ever.

You will be a happy real estate investor in Michigan at the end of the day, with a long and prosperous life full of smiles.