Why Loyalty Changed The Game For Us
Let me preface by saying that I was an investor for years (and still am) that hated real estate brokers - I thought they were a necessary evil to the game of relisting and provided no value to find off market deals...
Fast forward. I run a team of 19 agents and have a very successful investment business. Let me tell you that LOYALTY changed the game for us.
Loyalty between our investors and agents created a mutual beneficial relationship that was NOT BASED just on "who was bring them the next deal" but who could help them build their business fast. We lead with value and tons of it - showing them our systems, spreadsheets, contacts, subcontractors, competitive commissions, access to private money, and overall strategy.
Loyalty between our contractors and investors skyrocketed our profits, margins, and volume (commissions). No more babysitting and chasing subs down. They know they were the only one we are calling every time unless they are unavailable, then we go to our #2 on the list who was always inspiring to be our #1. Bids are competitive and straight forward. Change orders were reduced by nearly 50%. Repair addendums were handled in days and not weeks. Bids were fast and thorough.
Loyalty between our HML/PML and investors has created referral relationships that built faster funding and quicker underwriting. Rates have become more competitive and fees have been capped at respectable rates. Access is always there if the deal makes sense without having to bounce around.
Loyalty with our wholesalers and investors has given us more off market opportunities before it gets "sent out" to the rest of the list. We treat them fairly and compensate them greatly. If we pass on the deal, they have can take it elsewhere without any issues. But our business is #1 - We provide the dialer, the data, the scripts, the CRM...
We established this loyalty by FORMING RELATIONSHIPS and not just valuing PROFITS > LOYALTY.
This came from sitting down and drawing out our expectations up front. If they didn't want to follow our model, then we moved on. If they did, then we would test them out.
Once they passed the test, then we would keep meeting with them again and again to get deeper with them on their why and their goals. Working together to get them where they want to be in life was and still is our #1 priority. We stopped looking at business as who can I use as a "means to the end or tool to get the job done" vs. who can I put in the seat on the bus with us to accomplish our end game.
That's when things took off! Yes, people screwed us over. Yes, people would turnover. Yes, damage control would need to happen. But the BS slowed down significantly. We built a retail side and investment side business that everyone tries to work together for the common goal = wealth to change our lives.
Have loyalty and build relationships when forming your dream team. Take care of people. Don't be inconsistent. Your word is everything.
People will forget what you said and did, but they won't forget about how you made them feel...
#3 Rehabbing & House Flipping Contributor
- Investor
- Wilkes-Barre, PA
- 325
- Votes |
- 407
- Posts
#3 Rehabbing & House Flipping Contributor
- Investor
- Wilkes-Barre, PA
Much appreciated @Andy Sabisch
@Dan Gandee great post and in general I completely agree and have been loyal to many people and companies I have worked with over the years.
However, there are times when loyalty does not pay off. I have been loyal to my regional bank for a decade always going to them for business and real estate deals (outside my private money lender for acquisitions of flips and brrrrs that the bank wouldn't touch). A couple weeks ago I got a quote from them on a very large refi at 7.25% on a 20 year Amortization. Just after that I happened to meet a mortgage broker and as I was talking to him I mentioned this refi project to him he asked if he could get me a quote no strings attached. I told him I had a great relationship with the regional bank and he'd have to be very competitive to beat their great offer. He came back with an offer from another local bank at 6.1% 25 year amortization and 80%LTV. When I told my bank that I have been loyal to for years they immediately dropped to 6.5% and 25 year amortization. Bottom line, my loyalty to them did not get me the best offer from them, in fact they thought my loyalty meant they could charge me more.
@TimDelaney Totally can see your frustration there and it's definitely something you've got to battle with. For years I've called the mortgage industry "The mafia of real estate" because they see every deal yet own a piece of it all because it's their money. I've moved to having private investors come in with 2nd, 3rd position loans so we can redeploy capital on new projects, giving those same PML opportunities on the new deals so that their front end and back end investments were secure for profit.