Lately, a lot of investors, predominantly out-of-state or the country, have approached us wanting either our products or a property and the services we offer, including property management, maintenance, construction, evictions, accounting, and legal. Now, after the initial phone call and discussion, what these investors then do is go out independently and use the knowledge that we’ve provided them with, including where to find deals, how to rehab, and how to manage them successfully. They’ll take that knowledge and go and buy a property on their own, then call us and demand that we take the property under management and manage it for them. So, they completely eliminate us as the middleman.
Now, I know no one likes the middleman. But they still want us to assist with the service through the other things that we do. My issue with this is that it is not loyal. If you are not loyal when it comes to real estate, I do not feel you are going to have success long-term.
As a real estate business owner, you should aim to be loyal to your employees; in return, your employees will likely be loyal to you. If they’re not loyal to you, it is not going to work. If there is no loyalty among business partners, it’s also not going to work.
Loyalty’s Role in Real Estate Transactions
Of course, in this instance, where real estate investors are coming to us looking to buy our product and get the service that comes with purchasing our product, they are not loyal to us. It’s not going to work because we are not going to be willing to help them long-term.
And even if you are looking at investing on your own, not through a turnkey company or in turnkey properties, you are going to have to hire a buyer’s agent to assist you in buying that property. What tends to happen is word spreads and people start to realize you aren’t loyal in your business practices.
Remember, the world of real estate is very small. Everyone knows everyone.
Let’s talk about construction crews. Let’s say you’ve bought this property and now you want to renovate it. You’re going to get a contractor who gives you a great price.
Then, once the construction work is finished and you’ve bought another property, now you want multiple bids and the contractor you already worked with gives you bid is a little higher than the rest. So you decide not to go with the contractor that did a good job and priced a bit higher. You go with the other guy.
But that guy disappears. You would probably want to go back to your original contractor! However, do you think they are going to be loyal to you? I doubt it.
My message to you guys is loyalty is very important. When you find someone who you like, respect, and trust, you need to hold onto them like gold. I say that because real estate success is not going to happen overnight. It takes five, 10, or 15 years to get to where you need to be. So, when you find the right people, work with them even if you have to pay a little bit more.
Warren Buffett has a great saying: “Price is what you pay; value is what you get.”
I hope you get the message. Loyalty is very important. I only want to work with investors who are loyal to me and my company.
Are you are just looking for a transaction? Or do you really not care about investors?
Share your thoughts below.
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.