4 Qualities of Excellence in Real Estate Investing
I wish I were creative enough to take credit for the title, but I actually found the title somewhere else. In fact, I found it two years ago this weekend when my youngest daughter was born. I picked up a pamphlet in the hospital as we were leaving. It outlined the hospital’s “Circles of Excellence” and I was so impressed that I kept it and continue to reference it every week. These are the four areas – regardless of your business – that truly define excellence in any business. Especially if you are running a real estate business!
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4 Qualities of Excellence
I am going to list these in a particular order. The reasons I list them this way is that I think you must have priorities. Every entrepreneur will tell you that you have to watch everything at the same time. The qualities of great businesses do not develop in steps independent of one an other. They are developed at the same time. However, for me, I am going to list these in the order of their importance to my business. We will call these 1, 1A, 1B and 1C. All are super important but how you approach these four qualities can be the difference between staying in the middle of the pack and separating yourself and your company from the rest.
1.) Be Great At Service
Ever since I was old enough to learn lessons about work, my father has told me a saying that I believe he first learned either from Dale Carnegie or Zig Ziglar. Surely someone reading this will leave a comment and tell us exactly who said it. The saying was simple: “If you help enough other people get what they want out of life, you can have anything you want out of life.” It has been a staple around our family and within our company. It sets the foundation for everything else we do and can serve as the bedrock for building an incredible company.
Why are you in business? Is it to make money? Of course it is. Why else would you work so hard every day? But for most of us, making money becomes a habit. It becomes something that we have inherently learned and can do any time. We need to be in business for something more. It could be building a company and providing jobs. It could be helping other business owners grow and develop with you at the same time. Still for other business owners it goes much deeper.
Serving others can come in many different forms and it does not always mean food, clothing or money. How we give back and provide service to the community will be up to each of us. How we serve the real estate community is a lot easier to define. Providing great looking properties with more than just lipstick! Keeping rents at a level where they are affordable but also providing a benefit to the property owner. Working with renters who are truly trying to do their best, but may be having a hard time. Paying contractors every week and not making them wait for payments. Responding to requests from renters, especially quality of life issues, as quickly as possible.
Whether we realize it or not, we are faced with opportunities and choices everyday to serve others. They are all around us and how we respond will absolutely help us to be excellent!
1A.) Highest Quality of Work
I know that some contractors think we are crazy when we walk through houses. Truth be told, there has never been an investment property where we have walked through the finished product and NOT been able to find something that is not up to standard. Why is that? Because we have a very high standard of excellence…it is called perfect!
How many different ways can you do something right? For me it has always been only one way. I will use painting as an example. If you ask for a bid on painting a room and get three bids, most would say you pick the lowest one. But what if the bids were $80, $$150 and $160. Fo me, I would tell the $80 painter exactly what I expect from the paint job. From paint splatter to over-sprays to the final finished product, there is only one way to do it right. If the $80 painter understands and is willing to do it right, then that is who I would hire. And I would warn him on the front end, that he does not get paid until I am happy that the job is done right. So do it right the first time so you don’t have to do it twice.
Finally, I will be in the house everyday and making sure that I am "inspecting what I expect." That is a great way to train contractors of the quality of work you expect. You explain what you expect and then you inspect their work. If it is not up to your expectations, you make adjustmentsâ¦which, is a nice way of saying the contractor has to either fix it and bring it up to expectations or they have to do it all over again. As you can imagine, "if you inspect what you expect", and you expect the highest of quality, then it does not take long before quality becomes the main focus and all of the work being done in and on your properties goes up.
We may expect perfection and we do realize that perfection is almost too much to expect in a real estate investment business where hundreds of homes are being renovated a year. But whether you are doing one house or a hundred, there is only one way to do something right. The difference between the $80 paint job and the $160 paint job should not be quality of work. If it is, choose the $160 every time because higher quality has a much bigger upside!
1B.) Develop Great Teamwork
Every person or company or contractor that works with or for you is a part of your team. Regardless of the role they play, if they are on your team then their role is vital to the overall excellence of your business. Otherwise, what are they on the team for?
When we mentor other business owners, one of the first and easiest mistakes to identify in their businesses or plan is team building. I am a huge believer in whom you surround yourself with. Surround yourself with great people who are willing to work hard and do their role and you are halfway there to building a great business. It is very important that everyone understands their role and the importance of their role to the over-all business. Even if the team is mostly virtual assistants, they have to understand the importance of the job they are doing and how it affects everyone else.
Communication is a very important component to building a really good team. When you surround yourself with great people, communicate your vision, their role in that vision and then keep them up to date on progress. Be open and honest and help them to understand how each person, no matter how small their role, is still important to the overall vision. If your vision is to build a great company and you communicate it well, the right team with great teamwork can achieve anything.
One last point on teamwork is the continuation of the “inspect what you expect” concept. Everyone is accountable. Really good people are always wanting to learn and grow and being held accountable is part of that process. Take the time to help each member of your team get what they want out of life while inspecting with them what you expect out of them and you will be well on your way to building an unstoppable team.
1C.) Operate With Integrity
Since when did it become a negative if a company wants to operate with the highest level of integrity? Is there anything wrong with being proud of the decisions you make…especially the decisions that no one knows about? Of course not! So operate with integrity and be sure and let everyone on the team know that integrity is important to you.
The easy way to define this is to look at how you react and treat every situation that you will deal with as a real estate investor or a real estate company. I talked earlier about service and these two absolutely go hand in hand. No one is going to know the decisions that you struggle with, the extra dollars a decision may cost you or the lost revenue you face when making decisions. But, you will know when you refuse to fix something for a renter because they paid the rent late. You will know when you decide to hold a bill and not pay it so that you can sleep better at night with more money in the bank. You will know when you decide not to rent to someone for no reason other than personal preference. And only you will know when you sell a house to someone for far more than you should after writing a glowing advertisement for it, but never did any real work.
These are issues that real estate investors and investment companies face every day and have been for years. No one has any statistics on decision-making, but we have all heard the stories and most of us can understand the negative stereotypes that real estate investors get saddled with each day. They come from other investors making really bad decisions and lacking integrity. Eventually the bad stories get out and spread like wildfire, which is why holding yourself to a high standard and operating with integrity is so important. It is impossible for someone else’s mistake to stick to you if you work hard to operate with integrity. Your clients, your tenants, your employees, contractors and even your fellow real estate investors will come to your defense because you have earned their respect. It is not easy to do the right thing and more often than not, the right thing and the hard thing are the same thing!
If you conduct yourself with integrity, do not be shy about it. Be sure to let others know that it is important to you that others can trust you. It is important that, in combination with service, quality and teamwork, integrity plays a key role in your development of excellence in your business or your investment properties.
I am fairly sure that any number of us could come up with a list of what we consider to be “4 Important Anythings…”. The lists and the actual items listed could go on and on. But in the bigger scheme of things, I think my list comes down to a very important trait for business people. And, as I have said time and time again, if you are a real estate investor you are a business person! Operate like a business! So the one important trait that I think it all boils down to is respect. How do you show respect to others? Do you demand respect or do you strive to earn it? If you don’t get it, do you get mad or do you rewind and review to see if you should be doing things differently? The way you treat people and the way you treat your business are so important in today’s real estate environment when your customers, your tenants and even your contractors and partners have a lot of options!
What qualities do you consider most important in your business?
Photo: Aaron Morgan