The Basics Of Business - For Newbies (And Oldies)

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Please excuse this bit of a rant that I am about to go on, but I feel there are some things that just have to be said to newbies (and oldies) when it comes to the basics of business.  If I miss anything then feel free to add to this.  I am sure I am going to miss some things.

1.  Business, especially this type, is a relationship driven one.  That means talking to people.  Talking to people means picking up a phone when it rings.  Technology is fine and dandy and I understand there are many young members who just love it.  But, if you feel that voicemail is going to be your secretary, then you are going to lose a lot of money.

2.  The basics of grammar and spelling should be adhered to.  Misspelled words and poor grammar are a reflection of many things about you.  It shows your attention to detail.  It gives an idea of your educational background.  It shows you care about what it is you are trying to convey.

3.  Returning emails, phone calls, texts, etc. proves you know how to follow up, no matter how mundane it seems.

4.  If you have an appointment, be on time.  Time is the most precious thing a person has.  Wasting someone's time is tantamount to telling them you could care less about what is most precious to them.

5.  When talking to a person, look them in the eye.  It shows you're being honest.  If you have a hard time looking people in the eyes then go for the forehead or nose, it should be close enough.  LOL

6.  Dress for success.  When you go to meet people don't be wearing flip flops, shorts, t-shirts, ripped jeans, or anything with spandex. Just don't try to take my Spanx (which are worn under the clothing and not on top).  You'll have to pry those from my cold, dead hands.

7.  Finally, smile.  A smile opens up all kinds of doors.

Thank you for sharing these tips with everyone.  Like it or not, first impressions are everything.  I am amazed at how many people either don't know this, know it and don't care, or know it and are unable to apply it to themselves.

Time and time again, I am approached by newcomers asking if I'll fund a deal for them.  In most instances, that's all they ask - they don't have the common sense to include at least some preliminary information about the deal; no address, no purchase amount, not even what city and state it's in!  I'm pretty much tired of hearing, "are you still funding?" or "will you fund a [unknown and undefined] deal for me?"

Despite being involved in several businesses, I consider myself a pretty easy-going person.  My existing partners can attest to that - much of the business that transacts between us is done via phone and email, and funded the very next day.  But those are relationships that have earned my trust, by adhering to my parameters and not trying to slip "bad" deals into the mix.  We are respectful of each others' limits and expectations.

If you're a newcomer looking for funding, you should realize there is no pre-existing business relationship between you and your potential financing partner.  Potential funding partners whom you approach have no reason to trust you, and without a track record, your word is a poor gauge of your abilities.  As I explained to a very indignant wanna-be flipper who was telling me that his word was "gold" and was all that mattered; when a problem that is out of your control arises (divorce, injury, hospitalization, serious traffic accident) and you are unable to fulfill your obligation - of what value are your good intentions?  In that scenario, which is better in securing my interests - your word or your collateral?

Another major pet peeve is newcomers who refuse to do their homework.  Just this month, I had one complete stranger (from BP) ask if I'd fund a $1.6M home in FL.  His so-called analysis assumed ZERO carrying cost for my funds (no interest), did not take into account comps or marketability (homes of that class, in that neighborhood, took an average of 12 months to move), and his claim of profitability had no factual basis.  He assumed that just by changing the carpeting and redoing the landscape, the property could be sold for $3.1M... despite comps in the area selling for $1.6M to $1.9M.  The carrying cost for my funds alone would have netted this deal a loss of between $110K and $440K.

One more hint... if you've never flipped a property before, or if you don't own rentals, you are not a "real estate investor" - you are a "real estate investor wanna-be."  Do not introduce yourself to me as a "real estate investor" - just because you read some forum posts and purchased a book or course does not qualify you as an investor.  Experience and the ability to handle real-world investment scenarios is what makes you an investor.  Once you tell me you're a real estate investor, and I find out differently (I always perform due-diligence), you no longer have credibility... and I will scrutinize everything you present me, as well as think of you as a potential risk and liability rather than a business partner.

Instead, tell me what you can bring to the table in these deals, and what prior experience you have that directly impacts your ability to be my ideal partner.  A man who does not understand his limitations is a dangerous business partner.  A man who misrepresents his experience is a disaster waiting to happen.