Buying and selling foreclosures in Michigan is not a DEAL business. It is PEOPLE business.

Make that little change in your head and you will have a fat little bank account.

Everybody tries so hard when they start in Michigan real estate to find a good deal. I believe that you would do better if you work on building relationships.

For example lets take REO realtors in Michigan. Especially the Big Dog ones. Now I am assuming that you know what REO is; what is a REO Realtor and where can you and find the list. I have discussed that all in great details in Podcasts / blog posts / my radio show etc.

So we are going to skip the 1-2-3 of that. There are not that many at least in the big leagues. And we know that a small portion of them control the biggest REO listings in Michigan. Especially since the asset management companies started replacing the REO departments in the banks – they are even more important than ever.

Yet very very few real estate investors in Michigan take time or have a plan to really become the top number on their county’s or city REO realtor speed dial.

Business relationships just don’t happen. You got to have a plan to make them happen.

Here are some “specific” things to do to build these relationships:

1. You want to respect their time and your own. Nobody does anymore. If you want them to find deals for you – be extremely specific in what you are looking for. Saying things like – “ I want foreclosures in Wayne County” makes you look like a rookie first and foremost.

On the other hand, “ I am looking for 4 bedroom colonials or ranches with basement, preferably brick in Dearborn and Dearborn Heights and I am O.K. with rehabbing houses although I don’t do mold, foundation problems or fire damage houses.”

Which definitely sounds like you have spent some thinking about your business and not just bought your first late night infomercial course last weekend.

2. Biggest frustration of all REO realtors is real estate investors in Michigan who somehow think that actually financing and closing a deal is unimportant. Looking at 100 houses is more important.

Listen up – REO Realtors don’t get paid on the number of houses you saw and captured for eternity in your new $500 digital camera. They get paid when you “close” on a foreclosure with them.

A large number of Michigan real estate investors prioritize wrong. They think that finding a foreclosure is hard and they spend trying to find a good deal.

Reality is that with 35,000 bank foreclosures in Southeastern Michigan already this year it is not at all hard to find foreclosures in Michigan. Finding financing which is cheap, is O.K. with your credit situation and is also O.K. with you buying a REO – requires some knowledge.

You can find bunch of foreclosures but if you cannot close on them on the time you said you will in the purchase agreement then your word and your credibility is mud with the REO Realtors.

If you want to build relationships with them and make them fight for you in front of asset management firms to get your deals closed – then you have to deliver on your promise and close on time.

Is it possible that one day something will go wrong and you will not be able to close on time?

Yes! Business is life and things will happen that are outside your control. They have happened to me. Especially when I started but you really want to try and close on time on your first 3-4 deals so if something does wrong on a later date – there is some kind of a good track record for you in their mind.

3. Luckily from me I came from a culture where business is regularly conducted over food. No matter where you go or what time you go for business – they feed you. I saw deals being made, businesses being formed, partnerships created, new businesses alliances made, jobs offered – all over food.

So without thinking when I went into business for myself I started inviting people that crossed my paths in my Michigan real estate investment business to lunches – appraisers, loan officers, title company owners, closers, contractors, private investors and off course REO Realtors.

After all once you have broken bread with some one, shared a glass of wine with them – you are 10 steps ahead of your competition who are either lazy or super cheap to spend $50 on doing that.

Gayle Grix, one of last week’s Blueprint Bootcamp students asked me that how come I don’t weigh 400 pounds since I talk about food all the time? I don’t know the answer but I do know that food works. And food works flawlessly when it comes to building relationships.

After all is Thanksgiving the best holiday ever??? And is Thanksgiving all about giving thanks, sharing food and gratitude with people we have relationships with?

Take them out for lunch, tell them where you want to be in life, ask them what their ambitions are, how did they started, how do they keep themselves motivated, where do they see themselves in the coming years and you will instantly leap frog every single person on their house list.

Two of the biggest REO realtors who have been on the receiving end of my lunches have told me that in the last 10 years of selling bank foreclosures in Michigan – I am the ONLY one who has ever taken time to invite them to lunch.

You should always do what the majority does not want to do.

Posted by Mark Ijlal at 07:50 PM | Permalink

Pick any business – mortgages, real estate, appraising, title insurance, dentist, restaurant owners – and that one number that never changes is that 5% of them make all the big bucks. 1% truly gets rich.

So in any given Michigan city of all the real estate agents vying for you attention and listings – there is a tiny number of real estate agents – 5% who are making all the money.

Since they make money, month after month – they can afford to advertise.

Actually they advertise a lot.

My local township newspaper has a full page color ad on the back page, every single week. Same real estate agent week after week. I called the newspaper just for the lark. The full page costs $1600 per week. That is $6,400 per month, $76,800 per year.

This guy has to be doing well in his business to be writing a check like that every month. Which also means since he is the “only” one running a full page color ad – the chances are that his listings / houses sell faster than his competition who are not running a full page color ads.

Who do you want to handle your listing?

A real estate agent who runs full page color ads every week or a real estate agent who will put a sign in front of the house and call it a day?

The top dogs make more money, which gives them the room to advertise more, which helps them sell more, which gives them more money to advertise ….

You get the picture???

If you are going to pay 6% anyway to sell your house why not hire the absolute best gun for hire out there?

One of the top real estate agents in the city of Detroit spends $10,000 per month on radio advertising. Another one has two different radio shows on two different radio stations in the city.

Yet nobody bothers to do this little piece of common sense research before listing his or her house with a real estate agent. Any body with a business card with a picture and the title of Real Estate Agent could be given a listing. Yet they are not created equal.

It is 6% either way – top dog or wet behind the ears? You can pick.

Even worse are the real estate investors who get a real estate license then try selling their own homes without having $1 for marketing because they have already blown all their money on rehab.

Reminds of the old joke – the guy who wants to defend himself in the court of law has a fool for a client.

Do these 4 point checklist before you sign on the dotted line on a listing agreement to sell one of your properties:

1. If you have access to MLS do a search on the houses sold in that particular city and see whose name pulls up all the time.

2. Go to the public library and pull up the local newspapers and see who are running big color full page ads.

3. Go to the local Kroger or Meijer and see whose mug shot is on all the shopping carts.

4. Go to Google, MSN, Yahoo and type in your city followed by the words “real estate agent” and then “Realtor” and check out two things:

*** Who is pulling up on the top 3 search results? If they are smart enough to invest in putting up a kick butt website probably they are investing in other forms of advertising too.

### Who is running these ads – these are little text ads that are on the top of the page and right hand side – blue links that say on top “Sponsored Links”. These ads are very expensive to run. Anybody who is spending money on running these ads must be doing something.

Build a list of Top Realtors in your target Michigan city. A great Black Book the kind that makes you money does not happens by accident. But once it is done; the transformation in everything you do is almost instantaneous.

Posted by Mark Ijlal at 12:07 PM | Permalink