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Real Estate Empire
Transcript of Real Estate Empire
courses, ebooks, and trainings which show you how to make money in real estate.
Share this information with your REI Dream Team and have them implement it when working on your
investments. Don’t worry about them knocking off your business. If they grow into investing too then you’ll have 1 more
friend in the R.E.I. Association © 2) Design the System You need to know how you will make money in real estate. If you have made money in real estate before,
break it down to the tiniest details on how you made that sale (or rental) 1. Create flowcharts, SmartDraw or gliffy.com
2. Mind maps, Mindjet or mindmeister.com
3. Process charts. edrawsoft.com Once you have your system and blueprint in place, hand them down to your REI Dream Team for them to
execute and spend their time and focus on the most important MONEY MAKING Money Saving tasks of
your business! 3) Hire a Skilled Workforce – Your REI Dream Team Three common mistakes is to:
1. Shop and hire contractors at the cheapest rates possible
2. The ‘Jack-of-all-Trades’ myth: Trying to have one guy do it all. Investors do this because too busy
(lazy) to find the right guy for the specific task.
3. The work is beyond contractors abilities. 4) Go Play & Do Other things Once you possessed the knowledge, have the blueprints and hired and trained your REI Dream Team, you can
now go and do other things that you like. Some real estate investors use this time to create more business or
simply do things that they love like sports and travel while others work and earn for them. ONLY after you do Steps 1,2,3…. Living with Leverage! O.P.T. - Other People’s Time “I'd rather have one percent of the efforts of 100 people than 100 percent of my own efforts."
– J. Paul Getty, one of America’s first billionaires. Investors often think "If I do it myself it'll get done faster and better." Changing Your Mindset for Real Estate Investing The best investment in your business, and your future, is your specialized time used to Schedule and plan
Learn your craft
Assess obstacles and opportunities
Decide on your objectives
Develop your strategies “Real Estate Investing is a mental exercise – not a physical one”
– Scott FladHammer Don't be a Solopreneur - a person in business by and for themselves.
Instead be an Entrepreneur who focuses on working ON the business and not IN the business. Be your company’s executive not the company lackey or jack-of-all trades, master of none. Investors think that busting their own butt to get stuff done is best.
Giving work to other people is very foreign to them- almost unnatural. Fred Trump was hands-on; Fred put bird cages in lobbies to dress up Queens apartment houses.
Donald Trump is an executive; he imagines what can be done and has it done. “My definition of an executive’s job is brief and straight to the point.
It’s simply this: Getting things done through other people.”
– James Cash Penny Efficient Time Management – Yours and Your Teams Spend the money to save you from getting involved in a repair or rehab. “Be prudent with your earnings- earn more by doing less.
No one ever saved their way to a million dollars.”
– Scott FladHammer This allows the real estate investor to focus on directing and leading your real estate business towards its
greater good. Stay focused on the upper level activities such as strategic planning, marketing and negotiating.
Authors note: negotiate with only those who are predetermined and prequalified -- 85% of the way there. Let other media educates and get them predisposed to want to do business with you: 24 hour free recorded message
Audio & videos
Office or personal assistant There's just not enough time in our life to get good at all the skills you'll need to rehab and repair houses. So don't try. “Think of many things; do one.” – Portuguese proverb Besides the purchase, vacancies the largest expense you'll have in real estate because you get a zero rate of
return from it. Getting your property fixed and flipped or rented correctly and quickly as priority "Be a yardstick of quality. Some people aren't used to an environment where excellence is expected."
Steve Jobs No or limited callbacks on issues -- use the punch out list per the contractor agreement
25% of new buyers and renters are single females -- you better have it looking good and done right.
The property attracts tenant -- ugly houses will always attract a great comments. ASK: 1. Is this their Primary skilled trade, Secondary skilled trade, or a hobby?
2. The right tools for the job – Ask if they have the specialty tools. Verify they bring it to the job.
3. Can handle big and small jobs QUICKLY “Don't encourage overtime. Tell your people that the best way to impress you is to do a great job in the
time allotted for it and then go home and relax.” – The Mafia Manager Pay a decent wage to get it done this week . Instead of drawn out for two weeks
Use responsible self-motivated, contractors. So you don't have to baby-sit ASK: 1. Are they available part-time, available full-time
2. Do they provide free estimates
3. Do they want only small jobs
4. Do they agree to on-time guarantee Prior To Hire - More Pertinent Questions Primary skilled trade - determine if their moonlighting. Secondary skilled trade - is it a related field to their primary skilled trade?
Years in primary trade - ask how they started for pay, professionally, prior to asking when they
Years in secondary trade - is it a related field to their primary skilled trade
Age - how could they have been roofing for 15 years if they're 22?
Primary and Secondary phone - home phone and cell phone good equals stability.
Website - shows professionalism and stability. nice but not necessary.
Company Name - same as website.
is it on the air answering machine, business card, estimates and invoice? Have email and/or Fax?
Licensed - necessary for work that requires licensing
Insured and bonded - shows professionalism and provides peace of mind. Have them fax you their
Have verifiable references -- unrelated, within six months, preferably in the real estate profession.
Miles will go from Fort Wayne - if they're going to go 100 miles from Fort Wayne they are either
dedicated or desperate; your other questions will determine which.
Will take big and small jobs - a courtesy question because some contractors only want large highpaying
jobs versus one or two hour fixes. To Look For… Keeps me informed on their progress without me having to ask what’s going on
Ask questions for clarification instead of making assumptions about what I need.
Documents their work sufficiently for bookkeeping, receipts, material kind, color & description.
Follows up and prompt replies I need their technical guidance on the best way to implement the solution. The best contractors will say,
‘There are a couple different options here. You could do X, Y or Z. I recommend Y because…’” Reliability: Recognizing Long-Term Potential How to identify the contractors worth keeping. Would you rate him a "five out of five" on the basics: doing excellent work, on or ahead of
deadline, and within the agreed budget? Initiative: A good contractor executes on instructions well. But the real winner to keep is the innovator who
also suggests improvement and identifies opportunities beyond your original specs. After all, you're hiring
expertise. Availability: You make allowances for time zones and the "remote" factor in remote work, but is this
contractor responsive enough for your needs? Does your contractor admit when he doesn't know something? Apologize for a small mistake and fix
it? Suggest alternatives that give you better results — even if it means less billable work for him? Has he
delivered on every promise? Trust: This is a two-way street, and if you've made the effort to be clear, professional and
available, has the contractor done the same? Communication: Low Maintenance: You need to manage well, and keep your contractor informed, but once you do, can he
just run with it? Is his work style well-matched to yours? NOTE: What To Look Out For Telltale Signs Of A Screwball. 1. Your roofer shows up on a moped saying he found a hammer but needs to borrow a ladder.
2. Do you have any tools I can use?
3. I need paid daily.
4. I need paid upfront.
5. Mr. I-Do-That-Too: I also do electric, plumbing, roofing, and flooring
6. business card covered in dirt has old phone number scratched out with new one wrote in along with
girls number on the back of the card Being Hard Is Tough– So Is Being Poor There will be times when you will have to be abrasive, even brutal to team members. "Punishing honest mistakes stifles creativity. I want people moving and shaking the earth and they are going
to make mistakes." – Henry Ross Perot Use the Sandwich Critique: Sandwich constructive criticism between two layers of praise. don’t get in the habit of handling out those sandwiches all day. If you’ve found yourself doing that you've hired the wrong. Fire, and start over. "My main job was developing talent. I was a gardener providing water and other nourishment to our top 750
people. Of course, I had to pull out some weeds, too."
– Jack Welch Share Your Dream With Your Team - operating on purpose “Values have consequences” – Donald Rumsfield Everyone wants to feel they are part of something bigger than themselves.
So at the end of the day they did more than simply put in the time. Include your end game goal; don’t by shy about your aspirations.
Share your dreams and invite them along for the ride.
Convey that working for your company is a chance to belong, a chance to make a difference, and a chance to
really matter. Describe Your End Goal For The Repair Or Renovation. “The best teamwork comes from men who are working independently toward one goal in unison.”
– James Cash Penny 1. Explain your budget and material considerations
2. What you think the strengths and weaknesses of the property are
3. What advantages other comparable properties have Explaining Your Core Values Will Help Your Team: 1. Form a deep bond with your business.
2. Believe fully in what your business is doing.
3. Derive great purpose and fulfillment from their jobs.
4. Work harder and more efficiently.
5. They’ll help your business grow into a successful company that you can be immensely proud of.
6. Their work for you will have greater meaning for them in their professional and personal lives. You Get What You Pay For -- Does Not Tell The Whole Story. Professional appraisers value identical houses as much as $10,000 difference, because of filth and junk in front of a property. I can have my junk hauler and landscaper at a property for half a day and earn an extra $10,000 appraisal
value for cost of $500. The Law of Specialization "I hire people brighter than me and I get out of their way." – Lee Iacocca Hiring Equation: Quality of work + Value of work = Cost of labor Zoom to an appropriate specificity level when hiring contractors for a job. Example Too broad: a handyman who can hang gutters.
Seems in gutters. No specialized tools. Who gets leftover material?
Too specific: a gutter guy who restores turn-of-the-century houses with galvanized gutters
Unfamiliar with aluminum gutters and modern methods. Probably not interested in your rental or flip.
Good level: seamless aluminum Gutter installer with the roller in his truck.
Cut to fit. Proper materials. Specialized tools. Zoom to the appropriate level of pay to results. You don't need SEARS to come out to install your windows.
You are not getting anything from that extra money.
The extra money you pay is going into their marketing department for phonebook ads and
telemarketing advertising. "If you pick the right people and give them the opportunity to spread their wings and put compensation as a
carrier behind it, you almost don't have to manage them."
– Jack Welch The Best Resource for the Solution of Any Problem is the Person or Group That Presents the Problem
“Participative Management" requires:
requires trusting your team, something investors often don't, and don't want to take time to develop
the team has to believe in itself and not resist the idea of involvement Good Team Policies:
Contractor Etiquette- no smoking in the property -no butts left on the premises
Instruct contractors not to allow any lookers. It wastes the time of the contractor interrupts them.
NOTE: for this to work you have to leave the front door locked. Renters & Buyers have zero imagination. Fix the home all the way up before showing it or expect resistance, questions, suggestions, negotiations, … “Buyers buy what they see- not what will be” – Jeff Vaughan, Americas Favorite Landlord Give your REI Dream Team who will have contact with any prospects a succinct phrase:
“Because of insurance & safety reasons the boss said no showings until it’s done but call the number on the
sign to schedule an appointment.” Salesmanship For Non- Salesmen Turn the typical ‘customer prevention department’ into your marketing partner.
Give them marketing so they don’t have to. Provide:
Flyers and business cards, pens to give away.
Simple scripts for a few common situations Don't Be A Bottleneck 1. If the property is vacant give the contractor lockbox code.
2. If the property is occupied let the contractor and resident schedule repairs amongst themselves. E-mail I send to my REI dream team, instructing them how to schedule an appointment with my residence: We place a great importance on being 1st class housing provider.
And our service providers are on the front, face to face, with our most
important customers, our Residents. 1. If the property is vacant give the contractor lockbox code. 2. If the property is occupied let the contractor and resident schedule repairs amongst themselves. E-mail I send to my REI dream team, instructing them how to schedule an appointment with my residence: We place a great importance on being 1st class housing provider.
And our service providers are on the front, face to face, with our most
important customers, our Residents. So when you do business with us we ask that you treat our Residents
as if your job depends on making them 100% comfortable and satisfied. We call every Resident after repair and remodel as a courtesy follow
up; if they state they were anything but completely satisfied with your
service we will not do business with you again- Guaranteed. Schedule an Appointment STEP ONE: Call the Resident and read this script to arrange a time to meet them:
"I am (your name) with the Home Support Team from EZhomebuyers.
Scott asked me to schedule a time that is convent with you to look
at doing some carpet at your home. (Resident's Name), it will only take
me about (how long you will need) to take care of that, when would
be the best time for you?" I send contractors new to my company this email prior to starting any work and then follow up with phone call
discussing it: Our 'EZ Billing System' gets you paid like clock-work. Just send your invoice after completing
the work along with receipts for all material that was used for the house. Inspections of work
are done within 2 days of receiving the paper-work. Invoice is giving to Christine in billing. Checks are mailed out every Tuesday. Note that as an independent contractor you need to fill
out a W9 for our records. Here's a link to the W9 to download and save to your desktop. Fill it
out and send it in with your invoice >> http://fortwaynehomeguide.com/manage/w9.PDF Here are the 3 ways you can send in your invoices, receipts, ...
email: billing@EZhomebuyers.com and cc: Scott@EZhomebuyers.com
fax: (260)459-7778 6435 West Jefferson Blvd. #200
Fort Wayne, Indiana 46804-6203
You can also walk in and drop off a sealed envelope to the above address.
No stamp needed but envelope still does need addressed. If you have any questions about billing, clear them up before you start
any work. To check on status of payment if your check has not been received
in 10 days after invoicing contact Christine at 260-436-5000 ext 222. The Paperwork The 3 MUST HAVE Documents for any worker: 1. Independent Contractor Non-Employee Compensation Contract
2. Payment Schedule
3. Punch List Must Have Clauses in the Independent Contractor Contract: Client Control and Contractor Subs: Client retains the right to inspect, to stop work, to prescribe alterations, and generally to
supervise the work to insure its quality and conformity with that specified in this Agreement.
Contractor and Client understand that it is the Contractor’s sole and complete responsibility to pay
all employment taxes, including Federal and State withholding taxes, Social Security, and obtain
insurance, including worker’s compensation coverage and public liability insurance arising out of
or relating to this Agreement. Contractor is totally and solely responsible for any and all of
Contractors crew workers. Quality Agreement and Scope of Work: Client will approve Contractor services and Scope of Work on the following basis:
a. meets governing building codes and all required building permit inspections have been
completed and passed.
b. meets approval for all manufacture warranty
c. That services have been completed including all punch-out work as agreed. On Time Agreement: agrees to reimburse to Client the sum of $50.00 per day for each day Contractor delays
completion beyond Completion Date stated above. Completion Date shall be adjusted for change
orders as agreed in writing between Contractor and Client. TIME IS OF ESSENCE IN THIS
AGREEMENT Set a Fair but Firm Payment Schedule Payment schedules can also speak to a contractor's financial status and work ethic.
If they want half the bid up front, they may have financial problems or be worried that you won't pay the rest
after you've seen the work. I pay for materials upfront and labor in full only after the punch list has been completed. If you put off the things that will grow your business until your business has grown … you re never going to
get there. To Become more than you have been Live with Leverage! Common Reasons (Excuses):
1. Im not ready for that yet
2. I don’t have the resources: money, systems, documents
3. You just don’t know where & how to start. For those that want to start building your REI dream team now I've put together a fast start Kit with documents and information you need The Documents I Use In My Real Estate Renovation And Rental Businesses: 4. Independent Contractor Non-Employee Compensation Contract
5. Payment Schedule
6. Punch List
7. Independent Contractor Materials Cost Log
8. Renovation Report -Daily Action Plan And Communications Recap
9. Vendor W9
10. Credit Account Use Agreement
11. The Modification Agreement Detailed 1-On-1 Interview With Expert Contractors: Greg Sheets, Master Plumber
Steve Loniker, Home Builder & Restoration
Kirk Chevillot, Premiere HVAC The Scripts I Use In My Real Estate Businesses:
1. Estimates & Invoicing
2. Resident scheduling for repairs
3. Resident scheduling for annual re-certification and
4. Contractor partnership
5. Resident survey about the work that was done 7 Insider Secrets to Buying Carpet PLUS candid interview with expert Fort Wayne flooring installer The 35 People Who Should Be On Your REI Dream Team The 63 BEST Websites for Real Estate Rehab & Repair My Million Dollar Rolodex: Over 230 Fort Wayne Contractors He who has the most choices wins! He who has the most choices wins! Detailed description of skill sets and information: First & Last Name
Primary skilled trade and Secondary skilled trade
Primary and Secondary phone
Website & Company Name
Has verifiable references
Available part-time and/or full-time
Provide free estimates
Has verifiable references
Miles will go from Fort Wayne
Want only small jobs
Can handle big and small jobs
Agrees to on-time guarantee
Years in primary trade and secondary trade
Own all tools for primary trade & secondary trade So if these guys are so good, cheap and fast why would ever share my best "top-secret" resource with you... Why I am giving you this *MUST HAVE* stuff #1 I like you, I like entrepreneurs and I think that every now and then they need a break, and a leg up.
#2 You absolutely have to find a good contractors to succeed in this business, and they are hard to come by.
I hope you realize what a resource you just found.
#3 These guys have been really good to me, repairing, rehabbing and re-designing almost everything I do.
They deserve my recommendation.
#4 (The selfish reason) The faster and cheaper you get your houses up and making money, the sooner you'll
be ready for more training (DING!) ONLY $147 R.E.I. Association © Member Pricing $47 The R.E.I. Association © is committed to delivering the very best education and professional services in real
estate investing and we hope to continue to meet and surpass your expectations. gjhgkhhg