November 2010 Archives

- People who bitch and complain about China taking over the world yet go to Wal-Mart for their shopping where almost everything is made out of China.

- Michigan Real estate investors who have used a realtor in the past who did a great job of selling their flips. 

She was a professional, returned the phone calls, ran the Open Houses with you and actively reached out to other realtors who called in and told them that their buyers are going to love the foreclosures you have just turned from an ugly REO to a beautiful home, found you a buyer and worked the deal till it closed and you got a check.

And yet all of a sudden, to save may be $3,500: you decide to drop her and 'try' to do a FSBO on Craig's List and waste valuable months screwing around when you could be spending the same time lining up private investors, buying more houses and building your business.

Good people are hard to find and yet if you have them, why Wal-Mart them out of your life?

Are you making the check you wanted to make even after paying her 6%? Is it not better to concentrate on doing the next deal which will bring a $20,000 check instead of trying to add $3,000 to this one?

Same thing with contractors. People find good ones and then run them off by going off to cheaper (read: crazy insane one person crack smoking crew) alternatives.

I had a meeting with a prospective business partner last week that I have been talking to about starting a new business on the side. They turned me off immediately by starting the conversation with, "So what is the minimum, minimum amount of money we need to start this business?" They have money. A lot of it. But a wrong mindset about running a business. A better question would have been, "What do we need to make this business pop like crazy from Day 1 and we don't have that kind of money to do all the things we need to do at Day 1 - where do you think we can go and get OPM to make that happen?"

I am not for reckless spending. I leave that responsibility to my girls who (God help me) have figured out how to get to American Girls store on the Internet. But part of running a business is not about just finding opportunity (as in good deals) but also where to spend the most valuable resource you have: your time.

Every Michigan real estate investor when walking into an empty REO watches for mold. You watch it with your eyes (dark splotches on dry wall; kitchen, bathrooms, basement); you try to smell it with your nose (damp mousy smell in the basement) and you look for the telltale signs of mold: busted pipes around the house and water stains on the drywall in the basement.

Here is another type of mold you need to watch for your in business. The molds that you let grow on your business contacts. Here are the three most dangerous kinds.

1. You got a wad of business cards that you never transformed into a face to face meeting. Yes, this is exactly like dating in high school. He is waiting for you to call. You are waiting for him to call you. Well let's see who is more serious about business? You or them? Call them, schedule the meeting and meet them. All of them one by one.

The ones who are serious and resourceful ("I may not have all the money to do a deal but give me 2 days, let me send out some emails and I will put it all together.") to a sunny pace on your desk. Throw the rest of the business cards out. No point in keeping them and getting mold on them.

2. You got a Facebook Page. You got bunch of people talking to you and paying attention to you on your Facebook Page. Put out an invitation to coffee. Do it at a Biggby Coffee - they have really nice big tables where 4-6 people can sit comfortably or do it in a Coney or a public library.

Your 'fans' are molding away on Facebook. Cream rises. This will help you find the 10-20 of the really serious ones that you should be talking to all the time and doing deals with. Move them away from Facebook and into your cellphone and handshake.

3. Fellow travelers you met at REIA meetings and seminars recently and actually had fun talking to: move them from a seminar room to one-on-one meeting. Here is how to organize one: invite them to coffee; tell them what your goals for the next 12 months are; ask them what their goals are; figure a way out where both of you can help each other win.

This is a good handshake and a good conversation that already happened that you are letting mold set in. Move these folks from being 'nice people I talked to last week at the REIA meeting' to "my new friends'.

When you are letting all these contacts and people and handshakes stay still in your business; nothing good is coming out of it.

Swamp breeds bugs and mosquitoes. Stillness in a business is death. Money likes movement. It goes where it sees action and effort from people. They don't teach this lesson in schools and colleges but in the land of the free where entrepreneurs live everyday - the effort to turn people into relationships and into friends is all ours to make.

You are writing an email to a potential private investor about a deal you want her to finance. The email is done. You are about to hit SEND and all of a sudden a thought goes through your head at 800mph: this email needs to be re-written. It is too long / too short / not enough details / too much details.... The voice in your head is getting louder every second and even the thought of waiting till next day before rewriting it sounds very logical.

You need to Just Push Send and send that email out.

You want to contact the REO broker in your county whom you just found online and ask him to find you some good deals to go and look at. Your plan is simple: fax him the proof of funds, phone, and take him out to lunch. You have his fax number on your laptop screen. Your proof of funds is printed and ready to go. Yet all of a sudden you feel that today, Friday after Thanksgiving may not be the best day to start a business relationship with somebody new. Why not wait till Monday? Actually Monday is probably going to be really hectic as people stumble into their offices after a long weekend. Tuesday sounds perfect. After all most likely there is nobody at his office today anyway.

You need to Just Push Send and fax that pre-approval in, phone and setup the lunch.

Thinking things out loud on paper is a good thing but be careful - when you are starting a new business or doing new things in your life, the line between a plan and self sabotage is really thin.

You want to Just Push Send. As often as you could. As much as you can. Keeping what you are trying to do and want done securely locked in your heart is not going to make you any money. Pushing Send and getting it out there in the real world will.

What things you know need to be done in your business that you are 'thinking' and 'sleeping over' right now?

If there is one thing I have noticed over and over again in successful entrepreneurs that separates them from the ones who long to be one is that they train themselves to clench their teeth and Just Push Send in almost everything in their businesses.

Tough to swallow for most.

For us in the land of the free, it is an essential part of our day.

Alien Vs. Predator.

Vampires vs. Zombies.

Freddy vs. Jason.

Sell your flip by Realtor vs. Sell it FSBO?

Yeah it is as epic of a battle as the first 3. Some thoughts to move you close to selling your flip fast, if you are going to FSBO: (read this if you are looking for a realtor to help you sell your flip)

1. Start with the 'right comps': Every time I have talked to friends or neighbors who are thinking about selling their home FSBO - their comps are somewhere between 'hopeful' to 'delusional'. 

Numbers don't lie. If 3 bedrooms are going in your area for $90,000 well it does not matter if you wore silk gloves when you were laying out the tiles in the kitchen, one by one with precision that would make a NASA engineer proud of your wizardry. You may think THAT should push your house sale price to $125,000 but no your house is still worth $90,000.

2. Price your house to sell not price-to-wait: All the houses are in your area are going for $95,000. How fast do you want to sell your home? You can price it at $85,000 and if you still have $20,000 NET left and you can sell the house in 2 weeks.... Why not? 

If you are willing to do a little bit of marketing (online and offline) then price the house toward the higher end for the first 2 weeks and see what fish come swimming to you and if you don't like what is coming (or not coming) price the house to sell not price-to-sit-on.

3. Use Everything:  Use Craig's List. Use vFlyer. Use Postlets. Use flat fee MLS broker. Use YouTube. Use Facebook. In short use everything that is right in front of your nose to get the word out that you have a beautiful, fully remodeled house available for sale for a very lucky family who will call it home.

4. Man up and pay the Realtors MORE who have buyers: If a realtor knocks on the door and they have a buyer - pay them the 3%. Heck offer them 4.5% so they will go to bat for you instantly. If you are listing the house using a flat fee MLS broke - offer 4.5% if a realtor can bring you a buyer. You are still saving some coin and couples of hundred dollars are not going to make a dent in your big check.

Yesterday, I showed you how I am writing my 2011 goals next week. Several investors ask for the goal plan template I use for myself so here it is.

This is an example of my goal planning worksheet to get you thinking. I just filled in the first blank for somebody who is just starting out their business and planning to flip couple of foreclosures in 2011. Download it here.

This is a blank PDF of the above sheet. I don't like writing 20 goals on one sheet. The less you see, the more you end up doing. So print one sheet. Fill it up. Get them done.

You can download the PDF for the goal template here.

1. I start in November. The last weekend of November is slow. Everything (cell phone calls, emails, meetings) start to drop come Tuesday as people start leaving Metro Detroit to visit family. When I start in November, it gives me a whole month (December) to start doing the things that will make January pop out for me.

2. I don't write money goals anymore. May be I am just getting old or may be it is my kids who are getting taller every day but writing a number on piece of paper used to work for me but now it somehow just seems empty. Instead I write what I want to do. Most of the things I want to do require money but my mind have more fun visualizing a 2 week vacation in Spain than saying make $50,000 in February.

3. I write WHY in front of every line. A reason for doing something makes it more real for me. "Write a book." O.K wonderful but WHY? It is a rocket ship that will take me to new planets that I have not explored it. O.K. that makes more sense and makes the lonely hours of writing much more enjoyable as I know where this hard work is leading me.

4. I write WHAT WOULD I LOSE if I don't do this. I got this yesterday. I was on the road most of the day and listening to one of Tony Robin's CD's and he made a point of writing the cost of not achieving a goal. Sounds very negative, does it not? So what. As long it works. So for the goal, "Flip a house by March 2011 for a net profit of $15,000 minimum" could have a 'What would I lose" entry that says: "Not get $15,000 to get rid of my VISA and student loans. Not create another stream of income in my life. Stay stuck in my dead end job."

5. I write underneath each goal, what do I have to do everyday to make it happen. My personal JUST PUSH SEND. In my mentoring group, we have a saying: JUST PUSH SEND. Meaning make the phone call to the REO realtor. Go see some houses. Take a potential partner out to lunch. Run the ad on Craig's List. JUST PUSH SEND. Everyday.

6. I think about the people who can help me achieve this goal and write their names down. Granted this list is not complete right now but it is always good to at least put 3 names down with each goal. My book writing goal: I would say 'email Doug, Mike, Joe, Allan, Rodney... setup phone interviews for the book."

7. My last goal always is about WHAT I WANT TO DELETE OUT OF MY LIFE. I was talking to an old friend recently and I asked him what he wanted to do in his business in the next 12 months and he said, "No idea and cant seem to get clear about it." So I said, O.K. tell me what you don't want to do. Most goals are written with ADDITION in mind: get this, do that, make this... all about getting, getting, getting. But SUBTRACTION is a very powerful way of rebooting your own mind and getting it refocuses as in: "I don't want any credit cards in my life."; "I don't want to drive more than 15 minutes each way to the houses I am flipping."; "I never want to buy a house again using my own money."

Why does saying thank you need to be limited to only the final Thursday of November? 

Do you run a business? How many people you come across every day: realtors, contractors, property inspectors, appraisers, loan officers, other Michigan real estate investors, people who have encouraged you, smiled at you when you were frustrated and made you felt better, wrote books and blogs and told you not to give up....

The list is long.

Is it not?

So why not make saying thank you a part of your business strategy in Michigan? Every meeting that you go to should end not when the coffee finished and you shook hands but with you going back home and writing a hand written thank you note to them.

Every house that just got finished - take your contractors out to lunch as your thank you. Larry Abraham, who is in my mentoring group, started it and it is an unbelievable gesture toward people who really don't get too much love from our community.

Those ladies who work so hard at your REO realtor office everyday, making sure that your offers are getting across to the right people in the asset manager's offices, scheduling closings, getting title work done and even though your contact with them is mostly email or quick phone calls; do you know how great would it be if you took lunch to them this week?

But don't even for a second think that this gesture should start and end in November.

If anything else, today is a great day to make a Thank You Calendar for the next 12 months, starting from November.

After all our business runs 12 months every years. We don't have to limit saying thanks to the people who make everything possible in our business and help us make our dreams come true just for one Thursday a year. You are going to write you next year goals soon.

Write this goal of making your thank you calendar on top of all of them, now in November and start on it now. 

Here is a tip: if you are very busy and cannot get to everybody you want to reach out by email, phone call or handshake to say thank you, make the final Thursday of each month as your personal Thanksgiving day for the next 12 months.

Thanksgiving is a great holiday and we need to do more of it, 11 times more of it, every year.

It is strange to hear Michigan real estate investors argue about buying homes in cities in Michigan that are not going anywhere (any time soon) in hopes of that they can perform a miracle of making a buyer show up where nobody else have won.

I am all for courage and determination but I was never ever a fan of recklessness in business.

People vote their wallets all the time. You do too. Tonight, on a Saturday night when you picked Outback Steakhouse over another restaurant, went shopping at Staples instead of Office Depot, picked up groceries at Costco instead of Kroger - in every instance you voted with your wallet. 

Buying real estate especially buying it to live in it is the ultimate vote that somebody makes with their wallet. It is not a one night date thing but rather a big long term commitment and most people aka your buyers for your future flips take it very seriously and so should you. Therefore...

Why would you spent even 10 minutes thinking about buying a house to flip in Highland Park? Do I really need to give you reasons for it? Or to go toward Pontiac which recently outsourced its police force to Oakland county sheriff department. Why even bother? The people who could live there are voting with their wallets and buying a house someplace else right now. May be it is Waterford. May be it is Walled Lake (great school district). May be it is whatever but it a'int Pontiac anymore. 

The young people of the City of Detroit vote with their wallets too when they leave behind crappy city services, lousy schools and obscene car and property insurance rates to go to Southfield, Utica, Oak Park and Berkley. And then even in the city, the voting happens everyday between East Side (extremely rent heavy) and West Side (mix renters and home buyers).

What I think. What you think. What anybody else thinks does no matter when it come to the choices people make on where they want to buy a new home, raise a family and plant their roots. These choices are made by their wallets. By the school districts. By how much money they are going to save every month on their car insurance and home insurance.

I look for opportunities in my business. I am an entrepreneur and that is what all of us do but at the same time I never go against the will of the people. 

If they don't want to live in Pontiac and rather live in Walled Lake, you would never ever see a smart real estate investor in Oakland County crying and complaining about it. You would find her however driving around Walled Lake looking at nice 3 bedrooms REO's to find some to buy to flip.

Here is a simple way to get more done without stress in your business.

Make small lists. Get them done. Make another small list. Never exceed the number 4.

Do you know the problem with going to a really really good seminar on real estate investing?

You come back home with a giant list of things to do and after three days it almost looks overwhelming and impossible to get it done with your tight schedule. Heck after two weeks it is almost depressing to look at that list because you have not finished the whole list and you are almost telling yourself to put that darn notebook away.

Listen you and I don't get paid for making a To Do list. We get paid when we move things to the DONE column.

The easiest way of getting that going in your life it to build a habit of making small lists. Have a big list of goals and targets somewhere in your life but at your home office on your desk, you need a piece of paper with 4 tasks. Get them done before looking at anything else.

I used to be the champ in making a huge list and then beating myself over the head when the list almost becomes a paralyzing rock to look at every night. No more. 4 items max. I get them done before even thinking about anything else.

Try it for 30 days. You will be amazed on how fast your business will start moving.

Jesse recently asked, how do you counter people who dog on your beliefs about chasing success, making money and being on the road to becoming independent to the point of becoming resentful of your success?

I have lost count on how many times in the last eight years somebody close to me (relative, neighbor, in-law, friend) who has said sarcastically that 'don't ask Mark what is wrong with today... he is one of those 'motivational type' people."

The way they say the word "motivational" you would think only pimps and pedophiles would grade ahead of us.

Hey what is wrong with chasing success? After all what do we want to teach our kids? "Put your head down, get a job, and pray that somebody in China will never take your job one day?" Or should we teach them the skills along with a great education that will insure that they will never be independent on a big company for their future?

I am certain that if you reading these lines, then you and I know where we stand.

But it is tough, to hear relatives, significant others, loved ones, mom and dad, friends and co-workers constantly throw darts at you. It is unrealistic to say, "Dump them all." Well you can't dump all of them. Some... YES. But not all of them. Cant to go Craig's List and find another sister. No matter how screwed up she is... she is still tied to us to till death by blood and you got to tolerate her complaining and negativity come next Sunday or Thanksgiving dinner.

But you can and you should put some defenses in - to keep your head focused and not get distracted.

The best defense that has worked for me is being in a mastermind in Michigan.

There are some great, fun, ambitious, entrepreneurial people in your county. You need to schedule a time, every month to meet with them on a consistent (KEYWORD: consistent) basis and talk about your business with them. What are you planning to do? What are you working on right now? What contacts are you seeking? What is bringing you down? What inspired you lately?

Bring it all to table and share it. Don't look down on people who are half a mile behind of you. Don't be in awe of people who are two miles ahead of you. A true mastermind is about being in a room of peers where everybody is committed to helping each other without a trace of selfishness.

Find a mastermind in your life. It will change your business.

PS: I am not talking about an online form like Creonline or Richdad. They have their value and you can learn a lot from experienced investors in these forums BUT nothing can replace the magic of a face to face, handshake to handshake mastermind that you attend on a regular basis.

1. Go and look at 2 bedroom bank owned foreclosures in your Michigan City. They are tough to flip in ANY Michigan City. Do they rent? Sure. I lived in a one bedroom apartment for 5 years in Ypsilanti when I came to USA. But flipping 2 bedroom homes is a very tough call when you can buy a 3 bedroom home with a bigger yard and a bigger sq.footage any given day. 
2. Go and look at condos. Are there absolutely great steals available in Southfield for condos? Hell yeah. Do you know why they are steals? 'Cause nobody is buying them and banks don't know what to do with them. Homeowners can get approved for getting a mortgage for buying a condo unless they are willing to walk on crushed glass and give up their first born. It is much easier to go down one block and pay $15 per month more on your mortgage payment and buy a great looking house that you own entirely on your own.
3. Buy houses with massive mold or fire damage. I don't care how good you are but these two types of rehab suck time like nothing else. Leave them to full time real estate investors who have multiple crews and do multiple deals at a time and don't mind if one house takes couple of months to resurrect.
4. Work with contractors who cannot give you references.
5. Go to meetings with a prospective private investor without telling them ahead on how much money they would need to be able to do a deal with you so if they don't have that amount - you don't waste 90 minutes of your life telling them about a deal.
6. Try to do a deal with a private investor who is 'getting together' the funds need to buy and rehab the house. You either 'have the money' or you don't in your account. What does 'getting together' really means anyway? Is it flying out of drawers and sticking together in the middle of the room? Come on... if they are giving you signals all day long that they don't have it but they are working on it - keep on walking to the next guy who is not saying that.
7.  Sign a purchase agreement to flip a home to a seller who just finished telling your about their completely ruined credit.
8.  Try to convince your friends and assorted relatives on how much money could be made in real estate investing so may be some of them will partner up with you. Instead come here, to a room full of people who are actually interested before you even open your mouth to hear more about how they and you can work together and split up checks.
9.  Work with part time real estate agents and loan officers. You are most likely a part time real estate investor yourself, busy with your job and life. Don't you want somebody who has more hours than you right now to dedicate to getting your deals closed fast?
10. Spend time worrying. There is no profit in that. Go somewhere. Look at houses. Meet investors. Take agents and loan officers to lunch. Make offers. You got fun things to do and not enough time in the day. Why spent these precious minutes worrying about zombies taking over the world? Let's make money then pay somebody else to do the worrying for you. That is what the true wealthy do.
    

Everytime you think about starting a business and then don't because a thought comes to your mind that may be there is no need to do anything because your company will keep its promises and the 401K will bounce back and when you retire, the healthcare thing will be around also and may be something like a little fund for the grandkids and some fun stuff for retirement also...

You are casting a vote of complete confidence in your boss, your company and the bozo politicians in Lansing and Washington that they are going to deliver on ALL of their promises.

How do you sleep at night knowing that you are voting for THEM?

Not doing anything is no longer an option.

Why not vote for a different party this time?

You, me and our club of entrepreneurs who has given up on all of these fools long time ago and instead decided to do what it takes to build a business and multiple paychecks for themselves instead in Michigan.

Yes I am going to drop my kids to school in the morning and then I am going to go and vote but the real vote, the vote of complete utter confidence, that I already put in the ballot box eight years ago.

I voted for myself when I incorporated my first business in Michigan.

What are you waiting for? Decision 2010 is here.

Cast your vote in your favor.

You are the best candidate on the ballot tomorrow.