BiggerPockets

Always Have Two or More of Everything!

Thursday, September 24

 

According to Dan Kennedy, one is the worst number in any business.  And according to Three Dog Night (another tireless source of business and direct marketing advice), one is the loneliest number that could ever do. For this reason I don't really recommend having one person or one anything in your business.

Fact: people get busy! There are people that you rely on, people that you need who provide services. They're a member of your team and you can't do it without them. You are dependent on them. This is a necessary evil of being in business and being dependent on someone is never good. Your world can be spun out of orbit by them whether through their fault or not. I'll give you some examples.

Don't Let Anyone Hold Your Business Hostage

As I said, people get busy. Sometimes people disappear -- who knows where they go. They just disappear for a while. Sometimes their quality starts to go down or their price goes up. There are any number of reasons why someone that you're using may need to be replaced permanently or at least temporarily. What if they're on vacation or something and you need them every day?

You can't allow your business to come to a grinding halt just because they happen to be gone. Imagine if that happened seven times a year for seven different people. You would be stuck high and dry so first, get the initial service provider (realtor, attorney, title company, contractor, etc) -- just get someone at first.  If you can find two providers at a time, that's great. However, the first priority is just to get one so that you can do business. Use their services to make sure that they work well.

Get a Backup Person BEFORE You Need Them

The second part is harder because it has to be done in advance and takes a little bit of time to do. It's not human nature to do things in advance that take time.

It's human nature to put things off until it's too late or until there's a crisis. Then it takes even longer to do or your life becomes really stressful. I don't recommend this. Once you have that first person providing services for you and they're doing a great job, go ahead and get a second person to do a small job, a small project or task for you.

So if you rely on one company, such as a title company to close your deals, use another one for a closing or two. Then, at the same time, test another title company for your third closing. If they work well too, you may want to alternate between these providers for each deal. You can primarily use the first one, but keep the second and third ones on the back burner ready to use at any time.

This is called cross-training in the employee world. A boss will have two employees or two groups of employees that perform different functions. He will also train them to perform the tasks of the other employees. Therefore, if the other employees ever leave, your business won't shut down as the second group of employees will take up the slack of the first one or at least get the job done for a while.  It also helps different groups to understand each other and keeps work from getting too boring.  I know that's different because we're talking about using other independent contractors' and companies' services, but you can understand the principle behind it.

One Last Example From My Business

One last example is I have a Web guy that I use to create my websites and do web programming. I also have a full time administrative assistant doing research, marketing online, and other kinds of admin-related tasks. I then have a third person who can do both. I use him when the other two are busy.

If I were smart, maybe I would train this third person to do everything that my virtual assistant does so if that assistant ever leaves, I'd have another person ready to go right away. However, since it doesn't take that much time to find and replace a virtual assistant, I haven't bothered to do this yet.

I hope that these things help you to understand the principles behind never being dependent on one person and always having two, three or even more service providers ready at any given time to help you out because this is your life and your business. You can't afford to have things put on hold while someone else is out to lunch.

 

Tips for the Aimless Investors

Thursday, September 17

Having a vision and goals means having a road map, and knowing where you want to go before you get there. A vague notion of wanting to be wealthy and successful is not sufficient to the true businessperson.

You'll need to envision:

1. HOW wealthy you want to be,
2. WHEN you’re going to get there,
3. WHAT your business is going to be like in the near future,
4. HOW you will make it the kind of business you want, and
5. WHO will be part of it.

Then plan and take action accordingly.  Of course, writing your vision and goals down is essential, and you can do that on a single sheet of paper.

The problem is...where are you going to store your vision and goals where you will remember to review them?  Ideas could be:

• On your bathroom mirror
• On the wall right beside your computer
• In a folder, file, or binder, but with some kind of reminder (like Outlook or Google Calendar) of when it's time to pull it out and plan with it.  Trust me, if there's no reminder it will sit there for months or more untouched.

Spelling out these specifics and fixing them in your mind is what will separate you from the amateurs.  I recommend planning monthly and evaluating your progress towards your goals.  It could be a simple 15-minute planning meeting.

And if that seems like too much trouble, then tell me how you find time to watch "So You Think You Can Dance?" when it comes on at regular intervals, right on time.

How to Become a 1-Man Bandit Sign Army

Thursday, September 10

If you're making and putting up bandit signs yourself, then 1) May God help you, and 2) Here are some helpful tips for getting them made faster.  I've also included some things I have done to make sure the operation goes smoothly and consistently even if someone is hanging them for you.

Keep an Adequate Inventory

The first thing to do is choose how many signs you're going to put up in the next month.  This is based on your business goals and budget.

Once you know how many to put up, you'll want to order at least enough signs to cover the next month.  If you know what percentage of them disappear or are confiscated/desecrated by Heinrich Himmler and the Sign Gestapo, then use that figure to reduce the number that you order (to account for signs that stay up for longer than one week).

Or, order as many signs as you want to actually be in place each week, whether reusing them or not, as this will slowly build you up a surplus for emergencies without having to pay for it all at once.

Schedule the Signs' Creation

Mark on your calendar the time when you'll squat down and hammer the signs to wooden stakes, or attache the wire frames to the signs, or whatever it is you do to prep them for hanging.  I would do this once per MONTH, not once per week, as it's easier to remember to do something once than it is four times.  Also, you'll get it done faster because you're batching tasks.

Also, when you do this, count how many signs you have and calculate how many more you'll need to order to have enough for the next month or two.  Then order new signs right away, because they take several weeks to ship, usually.

The last thing you want to do is wait to order them until you have completely run out and then your business gets put on hold in the meantime.

Err on the Side of Too Many

I suggest having an emergency surplus of bandit signs on hand at all times--about two or three weeks' worth.  The opportunity cost of missing deals during weeks with no signs up is much greater than the money you tie up in buying a few more signs.  Plus, you'll get a discount for buying more.

Just make sure you're committed to hanging up signs consistently, month after month.  If you're just starting out, then buy a month's worth, put them up, and evaluate your results and ask yourself if it was worth it.  If so, continue using this process I've outlined and your bandit sign operation should go as smoothly as an underground operation to make money and give power to the people while dodging the swatting paws and tentacles of The Man (you know, that guy in the white pickup truck whose life mission is to see that your business goes unpromoted and countless families lose their homes?  Yeah, that guy)

 

How I Cut My Business Phone Bill By 95%

Thursday, September 03

I'd like to share my experience using Magic Jack (as seen on TV) to make phone calls, but first I'll give a quick history of my telephone experience (not counting 900 numbers).

From Land Lines to Internet Phone

When I started my real estate business, I got a land line (or I think I used my parents').  Anyway, the "local long distance" charges added up--these are charges for calling phone numbers within your area code, but farther away from your house.

Then I moved to Utah and kept investing in Virginia.  I got a different long distance service (land line again) and I spent about $120-130 per month, as every call was pretty much long distance out of state.

This, for some reason is cheaper per minute than long distance calls within the state.  Don't ask me why.  Don't ask anyone why, because it doesn't matter anymore.  We have Voice Over I.P. now (Vonage and other phone services that runs off the internet) so there's no reason to ever go back, in my opinion, unless you still have dial-up, pedal your stone-wheeled car to work in the quarry, and your daily shower involves snot-laced water spewed from the trunk of a wooly mammoth.

Vonage was great, till something better came along

Then I "switched to Vonage" two years ago.  Our phone bill went down to $34/mo including taxes and fees, saving us over $1,000 per year.

I plugged my phone into a black box, which I then plugged into the internet and a power outlet.  The reception was fine (except when using GotoWebinar, for some reason) and the only problems were 1) One or two days a year the phone would not work, and 2) Every few months I would have to unplug the box from the wall, wait 30 seconds, then plug it in again.

This was a small price to pay for saving $1000 because even if you have all the money in the world, $1000 will buy you yet another gold-plated ashtray to put in your sports car (until it gets full, at which time you would abandon the car and buy another, faster one).

Magic Jack rocked my world

So I took a friends's advice and bought Magic Jack.  It was $60, and I'll be billed $20 once per YEAR after that.  That will save me several hundred dollars per year, or, for you guys who have yet to outgrow toys, a new big-screen TV every 2 years.

It's a 1.5" x 2" boc you plug into your computer and then plug your phone into it.  It works like any other phone, and has voicemail, call waiting, can store your contacts, etc.  It's the best office investment I've made in a while.

The only downsides are:

1) It takes up 2 USB ports because it's so big.  You plug it into one on your computer, but then it will block the port next from it from having anything else plugged into it.

2) You can plug it into any computer anywhere in the world without paying for long distance.  Tht's cool.  But the image of me at Starbucks with a laptop on the table, and me jawing away on a freaking desk phone would probably look as goofy as those guys who walk around with Bluetooth devices on their ear when they're not even using them.

But anyway, #2 doesn't even matter to me, and #1 isn't really a big deal compared to the revelrous joy I experience from having yet another gold ashtray in my sports car every year.  I recommend trying Magic Jack for yourself (and send me a check for the difference)

 

Why Real Estate Appreciation is Not Your Friend

Thursday, August 06

The only saying about buying real estate investment property that we hear more than "Location, location, location, is that real estate always goes up in value in the long run.  After all, "They're not making any more land."

This, although true in most cases, does NOT mean that your best strategy is to buy and hold property until it goes up in value.  In fact, I don't believe you should be dependent on real estate appreciating at all.

The reason is that if you rely on appreciation to make a profit, what will happen to you if prices don't go up?  You make nothing, or could even lose money if values go down.  

Just the closing costs you pay to buy a property would make you upside-down as soon as you've bought it, not to mention the closing costs you'll have when you sell it.

The solution, then, is to buy in such a way that you do not have to rely on appreciation to make money.  In other words, create a rule that you will only buy properties far below market value.  I wouldn't buy any property for more than 80% of what it could sell for in great condition, minus any repair costs you may have.

Right now, I can hear some people who are reading this complaining and griping already.  

“But no one will sell you their house for less than it’s worth!  They’d have to be crazy!”

 I promise you that not only can it be done, it should be done.

In every location and in every real estate market, there are sellers who just want to get rid of their house, even at a loss.  Perhaps you know someone who has been in that situation.  It happens all the time.  If you get good at finding these property owners, you won’t have to worry about real estate appreciation and can receive your profit from either selling right away, or buying and holding for the long run.

If you follow this rule, you will be far more likely to create large profits in real estate, both now and in the future.