October 2010 Archives

I am teaching an ALL DAY, ALL NEW, FREE seminar on December 11, 2010 in Southfield. 8:30am to 3:30pm. Lunch is included.

My Christmas gift to MarkIjlal.com readers and to help you kickoff 2011 with current knowledge and contacts that will help you grow your Michigan real estate investing business in 2011.

Details are here.

The hotel room holds 75. I expect this event to fill up very quickly, so take a minute and check the seminar outline.

From Gaping Void Gallery

"I don't know anybody."

That is something that you might be telling yourself as you are starting in real estate investing in Michigan especially when it comes to private money or finding deals or getting some really good contractors to come to a foreclosure you might be thinking about buying and giving you an estimate.

I have two quick fixes for this:

1. You are not as helpless as you might think. Look at me. I came to America not knowing anybody in the business world. Years of working in minimum wage jobs did not actually gave a black book full of Michigan millionaires.

When I started flipping houses the list of people I knew stood at exactly ZERO. Or at least that was what I told myself. I was wrong though. I knew Nora and through her, I knew her brother and through him, I ended up an introduction to my private investor #3.

Also one of the co-workers, who were working with her, connected both of us to a contract he has worked with who did passable work. It was not a perfect world but it got us started. So if the people you know, even if the list is made up of 5 (I seriously doubt that) - they might know someone that can help you. So letting them know what you are doing and asking for help should be on your top list.

2. Go somewhere next week where you can find some people who know the people you want to know. I just got three phone calls today - all from real estate investors looking for this contact or that contact. Took me 10 minutes to point them to the right phone number and I went back to work.

You can go to a REIA meeting. You can go to an entrepreneur meet up. You can go play cashflow board game (from Kiyosaki) with bunch of local Rich Dad fans. I can think of a dozen places that I can go and spent some time in the next 30 days and walk out with the contacts I want.

You are not helpless. You have lots of people waiting for you to show up (KEYWORD: show up) and ask. It is not more complicated than that. But nobody is getting up right now in the morning thinking of you and wanting to call you today. You need to make that phone ring and fill it up with good numbers that will make the deals come to you. You are responsible for it. Not me. Not the world.

You just closed a deal with OPM funds. The closer leaned forward and handed you two checks. One with your LLC name and the other with the name of your private investor. You leave the title company in Southfield and start driving to Troy where you are going to meet her and hand over the check. The idea is to meet over some celebratory drinks and some appetizers and tell her about the next deal you are already working on buying and see if she is interested if doing a sequel partnership again.

This is all good but you should also add 2 more things to this meeting:

1. There is a no better time to ask them, since you are handing a big fat check with their name, that if they can give you a written testimonial on how the deal played out for them. Also their permission to use their name and picture in this testimonial and their permission to use this testimonial on your website or promotional materials.

2. Irrespective of whether they say YES or NO to #1 - ask them if you can use them a reference for future private investors / deal partners in your Michigan deals. Tell them that you are not ditching them but as your business grows you will be needing more people to partner up with you and provide OPM and you want the new partners to have peace of mind that they are dealing with a professional real estate investor who is serious about making money in the business.

Most people are going to say YES to one option. You don't ask, you don't get. So you gotta ask both, one after another, as cordially as you can. Before you know it, you are going to have a stack of testimonials and a list of reference phone numbers.

There are more than one kind of assets in real estate investing and not all of them are made out of brick and mortar. These above 2: testimonials and trusted references are two of the biggest ones that very few real estate investors ever think about collecting. Big mistake for many. Very big opportunity for you to speed up your OPM hoard.

I am a city boy. I was born and raised in a city of 16 million people. Just to give you some context, New York has a population of 7 million people. Trucks honking, buses rushing, thousands of people walk on each side of road in the blazing sun and literally millions of cars, rickshaws, taxis, buses, scooters and donkey carts rushing on both sides and sometimes in the middle of the road.

We lived in a small 2-bedroom apartment in the heart of the city and suffice to say I am not what you call the gardener type. I mean there was no land around me to plant anything. All black hot concrete. Land is simply too expensive (everybody buys cash, no mortgages, no personal credit) to be wasted on vegetables and flowers.

So early this year when my kids decided to plant vegetables in our backyard, you can imagine my nervousness. I am clueless about this stuff. My last memory about plants and vegetables is watering some plants in my grandfather's house almost two decades ago. But what we can all learn from kids is that they are really bad at hearing NO for anything. So they hounded me till I said YES.

I went to Eastern Market and bought $20 of vegetable plants. We planted cucumber, peppers (Bell, Habanero, and Jalapeno), cherry tomatoes, egg plant, mint, cilantro and cabbage. We dug the ground up, made up a brick wall, dropped two bags of soft soil, planted the little ones, watered them and then waited.

I also realized that there are poachers out there in my backyard - wild rabbits, occasional deer and bunch of friendly chipmunks and squirrels so I bought a metal fence to protect my plants. Then somebody told me about tomatoes plants falling on the ground as they get bigger so I had to go and get a metal cone to keep them straight. Lot of work eh? I thought all I had to do is to put the plants in the ground and be done.

Kind of reminds me of what I do every day in my business to build and then nurture my list of people who I meet during the course of running my business in Michigan. Building a list is actually not that hard to do at all. In a way it is lot like planting vegetables. You just buy the plants or buy seeds. Same way you can build a list of contacts by the emails you get from your website or Facebook or going to networking events (REIA's) or seminars.

That is the easy and fun part. The hard part is everything you do AFTER you got somebody to join your list. How you nurture them? Everything I did after I was done putting the plants in the ground. I watered them. Fertilized them. Put a fence around them. Same way I had to nurture my list by keeping in touch with them via phone, email, foreclosure tours, business lunches - they are all water and fences to keep those who make up my list to do business with me.

If you are not touching your list at least once a week - you will lose 10% of your list every month. They will literally forget about who you are or stop paying attention to you. Period. Look at your InBox right now - how many unopened emails are there right now from companies that have lost your interest mostly because their marketing to you have been random?

The vegetable garden actually turned out extremely well. The kids had a blast picking up tomatoes, cucumbers, mint, cilantro and peppers. I screwed up on cabbage and egg plants - they never grew. But now I know what to do next year.

When Nora was a partner in a mortgage company eight years ago, the biggest way mortgage companies got leads was telemarketing. You got a big office, activated 20 phone lines, hired a bunch of psychotic telemarketers, bought a list of everybody who had an ARM expiring in six months and started calling. You got a whole lot of people who hung up. You got some people who talked to you. Out of which you got some who started a mortgage application and out of which you closed some. 

It was with sheer brute force with telemarketers calling hundreds of homeowners every day, a loan officer could close 5 loans per month. While every single mortgage company was busting their heads against the wall, Rock Financial went to radio and the Internet and instead of chasing homeowners with telemarketing like everybody else was doing - got homeowners calling them. Now you can say... hey what is the difference? Tomato or Tomatoe... same thing right? A homeowner and a loan officer are talking on the phone. Same as getting a telemarketing lead. 

Nope! It is not the same thing.

While her company and the other 4000 mortgage companies in Metro Detroit were chasing people, Rock Financial was being called by the best leads in the metro Detroit - people who had stable incomes, documentation, and a 'desire' to refinance or buy a home ASAP. 

While her loan officers were calling the homeowners 30 times to get the W2 or Paystubs faxed over, loan officers at Rock Financial were getting everything you would need to close a loan right away on the first meeting with a homeowner. 

Rock Financial went from being one of the many successful player in the Detroit mortgage industry to THE PLAYER in a matter of months. While their competitors was complaining about the The-Do-Not- Call List, the headache of getting a website done, Google charging $10 per click for the words like 'Michigan mortgage refinance" and lazy loan officers who just could not close loans. Rock Financial kept on closing more and more loans. 

At the height of the refinance boom - industry grapevine had it that they were closing around 4,000 loans per month, with an average fee of $4,000 to Rock Financial turns out to be an astounding $16,000,000 per month. If you ever wondered where Dan Gilbert, founder of Rock Financial and a very sharp entrepreneur got the money to buy Cleveland Cavaliers...

Here is the best part about it all: while every single mortgage company (including Nora and her partners) were killing themselves in trying to convince the customers that their mortgage were "No Fees" and "It is completely free to you to refinance - the bank pays us"; Rock Financial merrily charged its customers 2% right on the HUD - on a $300,000 loan - that is $6,000 in fees. 

So think about this for a second - a homeowner with perfect credit, good documentation, house which is not burned down had a choice: pay Nora's company and hundred like her nothing to get a loan done or pay Rock Financial $4,000 to get the same loan and they went to Rock Financial. How can it be?

Very simple really. 

While all the other mortgage companies were trying to find and convince anybody breathing that they should refinance "cause 'rates are good madam" Rock Financial brilliantly used every marketing tactic open to them - radio ads, radio show on WJR 760, website, SEO, online ads, TV, sponsorships - to show up in front of people who were looking already to refinance or buy a home and completely convinced that they had to do it right now while the rates were good. 

And no, before you start writing a list on why you never do what they did because woe is me, I have nothing... they did not started with everything on this list when they began their ascension. 

The first thing they did was to put up a great website and started buying online ads. They invested the profits from their initial deals into radio. Then took the money that came in and built a radio show. 

They followed the 10% rule or in their case it might have been taking 20% of the top and invested it back in marketing. Anybody could have copied them at that particular point in their history because they were nothing special - just like hundreds of mortgage companies out there. But they made a choice about becoming serious and different in their approach to get business. 

Rock started with what they could afford at that time and slowly built the machine. Their competitors kept on telemarketing to people who did not want to hear the phone ring when they were having dinner with their families. Rock Financial did not do anything radical, if anything they broke the most holy convent of the mortgage industry at that time which was Thou shall not charge any upfront fees. They charged fees up the wazoo and their customers since they were the ones who wanted the loan in the first place, did not care even though hundreds of companies like Nora could have done their loan for free.

But for those customers there was ONLY one company in metro Detroit who was doing mortgages and that was Rock Financial. When people went looking for a mortgage - Rock Financial was THE ONLY NAME that showed up over and over and pretty soon it was the only name that they remembered. 

I learned a harsh lesson watching that unfold: it does not matter how good you are and how good your doohickey is - people do business with people who are in front of them and not with ones who are invisible to them. 

So when your 'customers' are looking for you: homeowners in your Michigan towns who are in foreclosure, motivated sellers, entrepreneurs who recently sold their business and are looking for places to 'park' their money, recently married couples who might be looking for a place to call home.... forget the mumbo jumbo about SEO, online marketing, Facebook Pages, blogging whatever and think about this: 

Do you show up in front of people who are anxiously looking for somebody just like you to help them in getting something done without any convincing whatsoever? Hot and bothered right now? Or do you choose to play the I-will-bust-my-head-trying-to-find-and-convince-them lottery that so many mortgage companies played and lost in the last decade to Rock Financial?

The all day seminar for October 23 is now sold out. Looking forward to spending a whole day in lockdown talking real estate investing in Michigan on Saturday.

1. Buying this REO for $500 in East Side of Detroit.

2. Buying a 2 bedroom instead of a 3 or 4.

3. Buying a 'cheap' heavily discounted condo which is not on a lake or in a HOT downtown like Ann Arbor or Royal Oak.

4. Buying house without a basement. In Michigan? No basement? Come on.

5. Buying a foreclosure in a city you know nothing about just because the price is cheap. Living in Troy, working in Novi but buying something in Ypsilanti just because it is discounted even though you have not driven through Ypsilanti in the last 4 years is not a strategy that is likely to bring a check back to you unless you spend some time BEFORE you buy in getting to know the good / bad areas around town.

6. Not doing a property inspection.

The first time I got an office, I decided that we had to look really 'professional' and 'corporate'. Don't ask. I was completely out of my mind at that time. So what does a corporate office looks like? Big desks and cubicles. I had a great desk at my home already so that was easy to check off.

The cubicles were a different story. I could not believe how expensive a cubicle could be. We were talking $5,000 each. I needed a bunch of them but I was in no mode to spend $50,000 for buying cubicles.

So I started looking on the Internet and finally found a company in Ohio who was moving offices and selling some of their cubicles for almost nothing. So I got a loading truck and drove 3 hours to somewhere in Ohio to pickup these cubicles, broke my back almost dismantling these cubicles and bringing them back to Michigan.

At the end of the year when my CPA was telling that I could depreciate and write off the cubicles, hey I was pretty happy. There were ASSETS you see in my business and as I stood at my office door and looked around - I felt whoa boy, I have arrived.

The cubicles went in the garbage when I decided to shuck the office and instead work from home. There were ASSETS but not a high value asset. The only asset I have built in my business and you should be thinking about building too is the relationships with the people you do business with. They are the high value appreciating assets. With every passing day, when you take care of these people, the value of them goes up for your business.

REO Agents, realtors, loan officers, property inspectors, contractors, other local investors in your Michigan County and cities around you, everybody you come in contact in the course of flipping foreclosures in Michigan - are you building an asset that will help you run a fun profitable business or letting it rust, taking the people for granted and worrying more about 'dead things' like cubicles in your business liked I did in my earlier years?

Real estate investing is not just about houses. It is about houses and people. Everything you do happens with a person. Look at this list:

• Deal with a homeowner or a REO agent to buy a foreclosure. 
• Fix the house yourself with some help or hire a contractor.
• Sell the home retail or wholesale or rent it out. 
• Rent the OPM from a private investor or a loan officer.

What is the common thing in all of them? You are not dealing with a website. You are not dealing with a computer. You are dealing with another person with a heartbeat and a memory. They will remember you and take care of you if you do it first for them. 

That is the best tree to plant in your business. The bigger the shadow of that tree, the more profitable your business will become. Recessions and recoveries come and go. The bridges we build with people we do business with stay forever. It is an obvious thing but very few of us ever bother about it. Like many things in life, we take other people for granted. Might work in a personal situation but it never works in business.  

Debbie and Doug Benson are very very cool real estate investors out of Lansing / Mason / Holt area. They buy and sell houses. They own apartment buildings and are working on buying some more right now. 2 People that you should be talking to in Michigan if you are serious about buying and selling bank foreclosures / investing in apartments.

Recently I saw on Doug & Debbie's Facebook Page that they had sold a house in 5 days after putting it on the market. I laughed because earlier this year, Doug was pretty grumpy on an episode of the FiredUP show about a house taking 11 days to flip.

So on his Facebook Page he wrote, "Got our first full-price offer on the Wilcox house ...five days after we put out the "For Sale" sign!?! *sigh* Right when I was starting to gear up my marketing stuff. Flyers, video, FaceBook ads, the works. Heck, I even added another page to my website! What a waste... ;-)"

He also sent me a private email, "We just took a call this morning from a lady who said she is going to find me a foreclosed house to fix up and sell to her. Another lady at the last open house (don't forget, we had already accepted an offer two days prior to this open house. Who cancels open houses!?! We put 16 couples through that house for crying out loud!) who said she is going to buy my next flip. She said she has been following us for two years waiting for when she can buy a house and making sure we keep flipping them so she can."

How do you get 'lucky' like this where buyers are chasing you before you even buy a foreclosure to flip in your Michigan City? Here is how:

Most investors work very hard in fixing the house BUT miss out on this. They fix the house but don't know how to make the house beautiful.

Most rehabbers are men yet most buyers are women. Believe me when it comes to making money and running a business, Nora and me are reflections of each other - everything else, not so much. We go shopping for anything even stupid stuff and we see the world from 2 different eyes. If you have been married for more than 1 year, you should be nodding your head right now.

2. Don't wait for luck to find you a buyer. Have a list of things you will do when the house is all done to sell the house fast. Doug has a list. So should you. He gives you a partial list right on his Facebook post.

Why is this important? Because even if you have a gorgeous house BUT nobody knows about it OR worse your house just becomes 'another listing on MLS" - you are not putting the house in front of buyers (like Doug is) who will be literally fighting in your living room to buy your house.

You are not giving your business a chance to send you a great check. Life is trying to give you money; you are not just taking it. Have a list.The same way you had a list to make sure that everything that needed fixing in the house, got fixed. Same way have a list to sell the house and do them all one by one. I want you to also be grumpy selling houses in 11 days soon.

There is no such thing as being 'lucky' about selling houses in Michigan. No fate but what we make. You have a beautiful house in a 'HOT MICHIGAN CITY' and you have a list of things you will do to sell the house - you will end up with a check. It is as simple as that.

We are going to talk a lot about #1 and #2, especially 2 on October 23 at my all day seminar in Troy. Almost 2-3 hours on this topic on how to sell your flips and sell them fast in Michigan.

October 23 is almost here so don't delay in securing your seat and miss out. You can reserve your seat here or if you have any questions, call Nora at 248-561-3535 directly and talk to her.

Like every seminar I have ever done before, this too comes with an 100% UNCONDITIONAL, NO QUESTIONS, NO REASONS REQUIRED GUARANTEE: sit through lunch, if don't like anything about my strategies, heck even the way light is reflecting off my bald head, just say so and get 100% refund of your tuition plus I will give you a $100 gas card for your inconvenience. I believe in my guarantee as having brass balls confidence in what I am going to show you.

I teach small groups by choice. Around 10-15 students only. I want to make sure that when you walk out, every single question that you might have been answered. So don't wait too long and be locked out. I will not be teaching another seminar till January 2011. So snoozing is not recommended on this. Lock your seat today.

This happens all the time in real estate investing. Not just in flipping but in getting private money or doing online marketing or whatever. Everybody gets some kind of 'stuck-in-mud' in their business.

The easiest way is get out of it is not to fight it or beat yourself up "Ah man what the hell is wrong with me?" There is not profit in that. All you do is giving your confidence a black eye. Nothing gained. Something lost.

Instead leave your house and start driving. Go see some REO's. Go to a real estate investor meeting. Take a REO broker or a fellow real estate investor to lunch. Go to a foreclosure auction (not to buy something but to hangout with other investors who are drinking a beer at the bar). Attend a seminar and not just sit in a corner but talk to the other investors sitting next to you

You need some fresh air. Go outside your schedule (work, home, sleep) and give yourself some. And no going to another 10 websites or blogs is not going to do it. Leave the keyboard and go in the real world and meet some new people. All those business cards that you have been collecting at all those meetings, today is the day to grab five of them and organize a cup of coffee with them. Why are you waiting for them to call you? This is not high school and you are not dating them. If you are stuck somewhere mentally, take the first step and setup the coffee.

One of the best advice I ever read to cure writers block is simply to sit down and you start to write. Just sit on the keyboard and started writing the first line. It does not matter if it is crap. Write one more line. Than another. By the time you get to paragraph 2, the block is gone.

Sometimes you will stall. Don't just sit there and wait for somebody to come and help you. Get up and meet people who are moving around. Pretty soon your head will get the message that you are not giving up and start moving again in your real estate investment business in Michigan. Books, Facebook friends and seminars on audio CD's are great tools to educate yourself and meet new people but nothing will ever beat a warm handshake in business.

When in doubt, leave your bubble and go see some Michigan real estate investors

(Reminder that my upcoming seminar on Oct 23 in Troy is almost here. Details are here. Don't wait till the last minute to reserve your seat. I like to teach small groups and every time I teach a seminar there are always a group of people who call late and miss out. Don't be one of them.)

So I get this phone call yesterday. One of my students who is completing his first flip is on the other line. Not happy about the fact that FHA gave him an appraisal that is less than what he was thinking it would be on his flip. And obviously he wants to ask me: What should he needs to do to fix this ugliness?

So I am spitting out couple of things that he can do to fight it and he is writing them down and I am on a roll right, first call of the morning and feeling real good and then all of a sudden, I pause and say, "Hey even all this cutting, how much money are you making in this deal?"

And he says calmly, "Around $25,000 NET".

Ahhh, $25,000 after paying the realtor and everything else?" I stuttered.

"Yup", came back the voice.

"Brother, you need to hang-up on me right now and call your realtor, order the second appraisal that FHA is asking you to do and close this bloody deal and call me once you have the check and we will go have a drink to celebrate your first flip." I said.

He laughed, a little flushed, thanked me and hung up. Guy has a good bright future ahead of him in real estate investing in Michigan.

And before he hung up, I said, that hey listen up one of the lessons every Michigan real estate investor needs to type it up and put it somewhere where they can look at it every day is,

"When life is trying to give you money, you need to shut up and take it."

I live in West Bloomfield where five years ago the idea of finding a foreclosure was funny. Now, I don't think there is one sub-division in West Bloomfield and Farmington Hills without at least one foreclosure and that is with some of the best schools in Michigan.

When life is trying to give you money, you need to take it. If you have been 'waiting' for some day to start buying and selling bank foreclosures in Michigan.... well now is the time and here is how you should start, so you can soon call me and bother me about your complains about ONLY MAKING $25K ON YOUR FIRST DEAL.

You should not EVER do a deal with anybody (family members included, spouses are an obvious exception) without a written contract in place that lays out EXACTLY what is supposed to happen. Who is doing what? How the money will be split up?

Use a lawyer. It will be 1.5 to 3 pages and it will give everybody a good outline on how the deal will play out.

Now stop for a second here and listen very carefully: every time I say the words 'contract' and 'lawyer', people automatically start thinking that I am telling you not to trust anybody. No it has nothing to do with trust. When I am doing something with you business wise, I just want myself and you to know exactly what we will be doing together.

The act of writing it down and putting it on paper and both signing it makes it clear to both of us. Think of it as having an outline before you walk into a meeting - it is a much better way since you are not going to miss anything and everybody will know what the agenda is.

One of the easiest mistakes to make in private money: not following up with potential private investors. So easy to do. So easy to forget.

You are at your kid's soccer game and start talking to another mom. Once she finds out what you do on the side (flip bank foreclosures) she says, "Wow that is awesome, I want to do this myself one day." Now the right thing for you to say is this, "Give me your email address. I will stay in touch with you so when you are ready, I will help you. I will send you pictures of the houses I am thinking about buying also in the meanwhile so you can see what kind of great deals are in the Waterford area."

You get the email address and then you do what with it? Absolutely nothing is the correct answer. Just because she did not wrote you a check on the spot does not matter that she is not willing to partner up with you and do business with you 90 days from today.

Make a group of email addresses in your Outlook Express and as you are looking at REO's in the coming weeks and taking pictures - send her and the others you come in contact with the pictures you are taking. So pitch. No pressure. "Hey I saw two houses today in Waterford that I might be buying. Can you believe the hardwood floors in the first one? It looks amazing." Facebook Pages works great too for this.

Everybody is busy and everybody forgets what you do or what they can do with you. Stay at top of their minds and pretty soon you will have an army of private investors fighting to do business with you.

You will get emails that will say, "I love that Waterford house in your last email. I will be ready to do something in Oakland County real estate next month. Do you mind meeting me for a cup of coffee to see how can you help me or can we work together?"

Every email that you sent out will nudge one person closer to giving you a call and initiate a business deal. Make it a rule that when you get somebody who shows a lot of interest in doing real estate investment that you will keep in touch with them via email.
Make that an unbreakable rule in your business.

1. The East Side of Detroit is rent heavy. Advertise a 3 bedroom brick bungalow for sale. Let me repeat, for sale and yet you will get a good 100 phone calls asking you if are open to rent the place. Run the same for a West Side Detroit house and you get an even split. 50 buyers. 50 renters.

2. Lawyers make lousy deal partners. They are slow and methodical and skeptical of everybody and anything. A burden of the profession I guess. Everybody is guilty till proven innocent. Not a bad mindset (slow and methodical) when you ask for their legal advice. Lousy thing to have in private investor when you lose a deal because by the time they done saying YES to you after three weeks of deliberation, somebody else got that killer REO right underneath your nose.

3. First generation successful entrepreneurs are awesome private investors. They have built their own businesses by taking risk and they appreciate young entrepreneurs like you building a business for themselves also. Not only they are faster in their decision making but they also bring valuable advice along with their checkbook to the table. I love talking to older entrepreneurs. That wisdom they have cannot be learned anyplace else.

Many things change in real estate investing and something will never change. Don't try to fight and change what cannot be changed. Instead pick the battles you can win. Don't try to do flips in East Side of Detroit. Do them in West Side. Don't spend hours trying to convince a lawyer to partner up with you. Talk to an entrepreneur instead.

Know what all politicians know - demographics are destiny. Can't change them. So don't fight. Adjust instead.

'Surround yourself with people who challenge you to be your best." That is Aristotle definition of a friendship. People who don't sit down with you and try to bring you down with them just because nothing is working out for them but rather people who inspire you to build a business, do real estate deals, whatever makes you heart sing.

Every time I hear somebody complaining about how they are not getting any support from the people they know about their plans to invest in Michigan real estate, I want to turn around and say, "Because you are asking the wrong people."

One of the games that I have seen played over and over again in Michigan is 'My world is worse than your world." One guy says, "My Company just lay off 10 people.' Even though the other people around him have no such problems but they immediately feel compelled to top that story, "Well my company has not laid off anybody this year but who knows by next year they might just fire all of us." And the other guy says, "Wait that is nothing, let me tell you about how messed up my department is..." And so it goes round and round....

The interesting thing is that what if you reversed it? What if you were surrounded by five people who when you said something about your real estate business, immediately share what they are doing in their business, what lessons they are learning and what fishes they are planning to catch in the coming days?

What kind of mood would you walked away from that discussion? Inspired enough to have trouble sleeping that night? I bet. The thing about candles is that you only need 1 to lighten up a dark room. Just one.

Things go wrong sometimes. So what? That is just part of life and business. When I am telling you what happened today and how miserable I am because it looks like I am about to lose this killer deal, what you say next to me will tell me a lot about who you are to me.

I might hear "That is nothing. That is what we get for living in Michigan. This frakking State. Let me tell you about my frakked up day." But a true friend will say, "Mark it is over and done with. Now tell me how the hell you are going to fix all of this by tomorrow with this crazy REO broker and then let's go and get a dirty martini with extra olives. I know that will cheer you up."

Any moron can tell you why things will not work out. That list is sooooooo easy to make. People practice for years so they can spit out that list in seconds. What is so smart about it anyway? It takes a true friend to sit with you when you need help and not get up till you and them have figured it out how to fix profitably whatever it is that needs fixing in your business.

What are you collecting in your real estate investing business in Michigan? Seekers of misery and doom competing to bring you down with them or true friends who challenge you to be your best?

If you ever went to a builders spec home especially a development being built by a national builder like Pulte, Singh or Toll Brothers - the first thing they will ask you before the let you go walk the model is to fill out a little postcard.

On it, you will give them your name, current address, phone number, email and how soon you are thinking about buying a home etc. So now if you may not like the house they are showing you right now - they know that you are in the market for a new home and as more new sub-divisions come into Phase 1 - they will alert you via mail, email or phone call.

Doug Benson, one of my Inner Circe members and a regular on the FiredUP Show, did a terrific episode on selling homes. One of the tactics that Doug uses is collecting phone numbers from every single person that walks through one of his flip open houses and then calling them back when his next flip is ready to hit the market. They might still be in market or might know somebody who is looking for home in the Lansing area.

So 2 things to remember:

1. Not everybody who is in the market to buy a new home in Michigan is going to find one before the weekend is over. When you bought the home you live in... how many homes did you looked at with your significant other?

Also if you are renting and your lease is not ending for another 90 days, but you still might start looking right now. I know a couple who is getting married in January and they are going to move in January but they are looking right now. So even if you don't end up selling them this home, you might end up flipping the home that you have going on in January.

2. If nothing else - collect email addresses and phone numbers along with names from people coming in to your place. If you are comfortable with Facebook, setup a Page to the tune of Southfield Homes and give them a little business card and ask them to LIKE it up so they can stay in touch and see all the new homes that are coming in the market.

But either way, build a list of buyers walking through your OPEN HOUSES and then follow-up on them as your new deals get finished and hit the market. That list will help you sell lots of houses in the next 12 months.

"So what do you use to...." is a question that comes up again and again in emails. Here are some answers with links to save you time:

To form a LLC

I just go directly to State of Michigan website to do it. It is just $50. First you download the ELF application. Complete it with your credit or debit card information and fax it over. In 24 hours, they fax it back to you with an ELF number. Think of it as your account number that you can use to form, modify, and dissolve a LLC. You don't need to fax in your credit card number information every time, instead you just put the ELF number and your credit card on file gets charged by State of Michigan. Download and print the ELF cover sheet and LLC Articles of Organization form. They are extremely easy to fill out. Complete and fax it back. In 24 hours, you will get them back, stamped and you are good to go.

To get an EIN number

You need this to open up a business checking account. Go to IRS website and click on APPLY FOR AN EMPLOYEE IDENTIFICAITON NUMBER. The link is usually on their home page. After answering couple of very simple question, you get an EIN number and if you provided an email address - you will get a PDF in the email immediately also.

For keeping track of my expenses

I have been using QuickBooks from Day 1. There are many software and web services now available that let you keep track of your expenses and income but QuickBooks is the gold standard. Your CPA uses it. My CPA uses it. At the end of the year, you just backup your QuickBooks file on a jump drive and drop it to your CPA. Pick up your taxes after couple of days. It will save you money not just in capturing all your expenses but also in CPA billable hours and she does not have to wade through messy files or bill you $125 per hour to reconcile your six month old bank statement.

I was extremely unorganized eight years ago and even though I had QuickBooks installed on my computer, I still tossed around receipts, never reconciled my bank statements and charged my business expenses of five personal cards. What happened? I wrote a big fat check to my CPA to clean up the mess in the end. I did that for two years straight and then I got wiser and started to force myself to run everything from QuickBooks every week. My CPA bill dropped to 20% of what I was paying before.

For sending out emails

For my Inner Circle members (this is my mentoring group for Michigan real estate investors who buy and sell bank foreclosures) I just use Outlook Express. It is a small closed group and all the emails come to me and Nora personally and one of us always replies back. No assistant or anybody else ever sees these emails so I just use Outlook Express installed in my computer.

For collecting email addresses here on this blog - I use Aweber. You really cannot use a service like Comcast or ATT that you are using at home to email thousands of people at once. I work from home.

I have Comcast and they will think if I send an email out to 500 people that this is some kind of SPAM and block the email. So if you are going to put up a website or even use a Facebook Page for your business and skip on the website - you still want to collect email addresses so you can keep in touch with all the people who are coming to your website or Facebook Page. Aweber lets you do it. It is not point and click though. There are other services like Constant Contact that are more user friendly. They all typically come with a free trial period. Sign up with either one and see which one do you like to use better and use it.

For texting

If you are not collecting cell phone numbers during open houses than you are missing out on of the easiest way to reach people quickly. Here is an astonishing number: 77% of mobile subscribers text on a regular basis and 97% of all text messages are read within 15 minutes of arrival. I use a Voice Shot. They are based out of Livonia and I have been using them for years and it is extremely easy to use.

For getting a domain and websites

I use Godaddy now. Over the years I have tried many companies. None of them were terrible but most of them had no phone number to call if something went wrong. Godaddy has 24/7 phone support that you can call if you are having any problems.

I am so non-technical that it is pathetic. My brain just does not work that way. I don't know HTML or any technical stuff about setting up websites etc. So I need help when i am doing these kind of things. I need a phone number when something is not working and their customer service is great. They are also affordable. For around $1.99 you can get a domain registered for one year and your hosting is around $4.99 per month. Your frapppuccino this morning was more expensive.

For making a simple form to collect information off Craig's List or Open House website

I use Wufoo. It is free and one of those websites that you can sign up and start using it within 5 minutes. You can collect names, emails, phone numbers, whatever you want and it gets emailed and text to your cell phone within seconds.

For putting up ads on Craig's List

Postlets and Vflyer are both great services that let you make a professional looking ad for selling your home once it is all done. Most investors don't take the extra 10 minutes that it takes to make a great looking ad that would show the beauty of your home to potential buyers. Hey you just spent 2 weeks getting this house in great shape so why not spend another 15 minutes and show the world how it really looks.

Doing videos of houses and foreclosure tours

I use a Kodak Zi8. It is so easy to use that my 6 year old daughter makes movies with every day. Point and shoot. Works great in low light also which you will need if you are making a video of a REO that you are about to buy and ship it to your potential deal partner. It also good for taking still pictures.

Forms to keep in the trunk of your car

Borrowers Authorization Form if you are thinking about doing short sales since you never know who are going to meet. Form W-9 for all your contractors to sign before you write them a check. You need it to 1099 these folks at the end of year. 99% of the time if you don't have in your trunk and you don't get it signed right away, you are going to forget about it.

Back in the days, when a traveler was attempting to cross a desert (this was before GPS), they would go to the village at the outskirt of the desert and hire a guide to help them cross the desert. The guides knew the lay of the land. They have been crossing the desert for a long time and they knew the shortcuts, where the oasis were found and the roads to avoid especially the ones that lead just in circles. They knew how to read the wind and camp when a storm was coming and also how much to pace the animals during the day so they don't get exhausted.

What they bought to the table was not just a map but wisdom that they have gained travelling the desert over the years. Could a traveler do it own their own? Sure. The North Star was ever present in the clear skies and the guides were kind enough to draw a map when asked nicely enough. They did not really care if the traveler hired them or not because they knew that they bought more than just directions to the deal.

What obviously was not a good idea was to hire several guides and every day asks for directions from a different guide. Even though they all came from the same tribe of desert walkers, they still have different ideas based on the times they have crossed the desert in the past. If you took guidance from a different person every sunrise, you were surely to get lost and end up nowhere. So even when the richest traders stopped by the village and wanted to hire more than the one guide as a backup, the village elders refused. One crossing across the desert. One guide. That was the rule. And it was good rule because it has worked over and over again over the centuries.

What applied back then also applies to your real estate investing business. Pick one guide (book, mentor, and seminar), take them with you and cross the desert (do a deal using their methods). I see really smart and nice people getting lost in the desert way too many times not because they are doing the wrong things but they are asking for directions from many guides, trying to do too many things at the same time and ending up nowhere.

Hey, relax, take a deep breath.

Long after we are all retired and sipping dark rum in tall glasses on sun drenched beaches, somebody in Downriver would be putting in a cash offer on a REO, a mobile home park will get a land contract purchase offer and somebody will shuffling bunch of potential deal partners around Detroit West Side showing them houses on Outer Drive.

Real estate is not going anywhere. You don't have to do everything before sunset. Are there massive opportunities sometimes in various niches of real estate investing in Michigan? Like right now? Absolutely. But the opportunity clock never runs out. When one thing tightens up (business credit, traditional mortgages), another one opens up (suburban foreclosures, apartment buildings).

I grew up in a part of world which was ruled by Great Britain for over 400 years. The saying went that the British Empire was so big that the sun literally never set completely on it. Somewhere in the world, there was always a sunrise happening in the British Empire. True for real estate investing in Michigan also. Something is always, always, always clicking in place as one thing is going away. More important is to find the right guides who can take your hand and take you to that opportunity whose time is now.

Here is an example. If you are thinking about buying an apartment building in Metro Detroit today, who can help you get there really fast? Who has the experience, the knowledge, the contacts and wisdom, that deep seated knowing that is in their bones and really cannot be gained without experience. What about Lansing and the I-96 West corridor? Who is hunting buildings out there? If you asked me, I would say for Metro Detroit - call Dennis. For Lansing and I-96 West - call Doug. You will not find better guides when it comes to buying big apartment buildings. Me? No idea. I know this other road in Michigan real estate investing that has worked really well for me and the people who I took across with me but not this trail.

Easy mistake to make: start with apartments because you are excited about the thought about owning a 50 unit building. Instead of learning about it and THEN doing everything you can to get your name on the operating agreement of a LLC that is about to buy one, in the middle of it all, giving up on the goal of owning an apartment building and all of a sudden start pursing investing in a mobile home park.

If you are going to change guides every other day, all you going to get is a road that goes in circles. Nothing gained. No checks. No touchdowns. Pick a guide, cross the desert, get a deal and get a check. This business is about getting a check. You don't get any points for miles traveled. You get checks for finished deals. Worth remembering. Easy to forget. Your choice.