Keep Your Mouth Shut

First, let me say that I’m a huge fan of the Apprentice. I’ve watched the show from Day One and it’s one of the rare shows that provide entertainment along with business insights. It’s also a display of some of the brightest people making some of the most ridiculous business decisions when faced with pressure. If you’re not watching, you should be as there’s always a lesson in the show for you to grab.

Last night kicked of the new season for the Apprentice and as one of the devoted fans I watched. It’s utterly amazing at how many people have a real problem with simply keeping their mouth shut. I see it in day-to-day business activities and last night’s Apprentice proved the point that people want to talk when they should be listening.

In case you didn’t watch, Trump was about to fire Tarek for the task, when Summer the restaurant owner interrupts him. Let me ask you this, “how stupid could one be?” If you’ve ever watched one episode, you should know when to talk and when not to. It should be obvious that when someone else is at the point of getting fired, you keep your mouth shut. Anyway, this sealed her fate as she was immediately fired after the interruption. Which brings me to my point for this post:

Know When to Keep Your Mouth Shut!

Now, when you’re talking to your seller, ask open questions to get them to open up to you, then shut up and listen. If you build a good rapport with your seller, then they’ll open up to you, and the more you know, the better deal you can negotiate.

Just my .02

Derek

Power of Relationships

Hello again, fellow investors

In the aftermath of all the Valentines Day hoopla, let’s talk about relationships.

And no, I’m not Dr. Phil about to give you the latest marital advice; I’m talking about building relationships in your business. You’ve heard it time and time again: build relationships. Well I hate to sound like a broken record, but I’m going tell you again “Relationships is a key component to your bottom line as an investor.”

Let me tell you a story about a deal I did a couple of years ago to help emphasize my point.

There was this gorgeous property located in a fairly elaborate subdivision called Heathrow. Most of the homes are pretty new and are all brick with very nice amenities. The property was a large 3-bedroom brick 2-½ bath.

I saw the foreclosure notice in the newspaper, so I immediately start calling some of the family to make a deal on this property. I get in touch with a lady lets call Susan for the sake of privacy. Susan and her husband had built the home around five years earlier. The house was vacant and had been vacant for months. I discovered after talking with her, that Susan and her husband had a very rocky marriage and were now divorced. She was doing all she could as a single Mom to make ends meet. Her ex-husband had a medical discharge from the military from a rare disease that left him paralyzed. Susan was ready to move forward. She’d been through an ugly divorce, a bankruptcy, and now was going through a foreclosure. It was really tough on her. Now, her ex-husband had already moved to Washington and was re-married.

Here are the numbers on the deal:

Value: $165K
Owed amount on mortgage: $100K
Behind: $10K

I dealt with what seemed like every family member that could have had any possible interest in this deal and tried to get this deal sealed up, but to no avail. Susan, the ex-wife had already signed her interest over to me. However, the ex-husband that lived in Washington kept stonewalling my efforts and wasn’t willing to deal. Then, I get this phone call two days before the auction. No kidding, it was 2 days away, and now all of a sudden the husband wants to deal. With only two days before the foreclosure auction, I can get a deal done if the people are in my area so that I can meet with them. I’ve done it numerous times before. But when you add the fact that this guy was on the other side of the country, it makes it almost impossible. That is, unless I happen to know someone in Washington!

See, I happened to meet a guy named John at a seminar several months beforehand and we became friends. We emailed and talked on a regular basis about how to improve our businesses. So, I called him and asked him for a favor and told him I’d make it worth his while. And so, John agrees and gets the deed signed later that night and sends the docs overnight via Fedex to me. I reinstate their loan 1 hour before the foreclosure sale and the deal is complete. Whew!. “Take a Deep Breath” right?

Now, after the deal closed I sent John $2K for his troubles. Anyway, my point is this deal would’ve never happened if I’d not built a friendship with John. And notice that I just didn’t call him out of the blue asking for this favor. We were already friends and had already established this friendship months before. The moral to the story is to use the Golden Rule in all circumstances. I’d never thought in my wildest dreams that John could’ve helped me in Alabama. And the truth is that there’ve been more people to help me because I go out of my way to build relationships with others.

The simplest way to accomplish this is to treat everyone with the utmost respect even if there’s no financial gain for you.

Anyway, I’m about to leave to go look at a 4-unit apartment building that’s in the process of being condemned by the city. I’ll try to show you some pictures of this beast of a building in a few days.

Until then,

Derek Pierce

Desperation Factor?

So what makes one a candidate for the Desperation Factor?

The seller must have some underlying situation that is going on behind closed doors that is motivating them to make a move on the house. For example, if you were talking to a seller of a property and they said, “Im thinking about selling”, then I’d say to move on because, obviously, they aren’t a candidate for the Desperation Factor.

These sellers are simply time suckers for you that are out to steal as much of your energy and time as possible, therefore stay away from these because they want full price on their terms and have no clear motivation to sell.

However, if the seller says, “I’m selling because this house was my Mom’s, she passed away last spring and we just want to move on” or something like this, “We are three months behind and we don’t know what to do.”

These are the only type of sellers you should be dealing with when trying to make a profitable real estate deal. Now, if you are worried about taking advantage of someone that is down on their luck, then my advice to you is to simply get over it. You’re doing these people a disservice by not offering your expertise.

See, even I once felt this way. Then I started tracking foreclosures in my county and literally witnessed someone have their belongings carried to the curb while the neighbors swept in like buzzards after the homeowners belongings. It was very disheartening to see someone’s belongings treated like yesterday’s trash by the homeowner’s own neighbors.

So, if you feel that you may be taking advantage of someone, then follow the foreclosure leads and witness the steps the mortgage companies take when they foreclose on a home, then you’ll appreciate the services that you bring to the table. And realize that you’re being a selfish pig by not offering a possible to solution to someone in trouble.

Until next time,

Derek Pierce

P.S. By the way, feel free to email me your questions, comments or additions you’d like to see in future articles and posts.