Posted by Laura on June 16, 2001 at 20:26:02:
Steve,
thank you so much for taking the time to answer my question. Thanks so much for all your postings. I hope I don’t miss any of them, as a beginner, they’re helping me SO MUCH!!!
Laura
Some advice for those just starting out - Posted by SteveS(CPA)
Posted by SteveS(CPA) on June 12, 2001 at 16:48:15:
OK
First of all I’m sure many of you do not remember me. I used to hang on this board like a cheap suit a few years back. The information I received back then helped me pay my way through law school and put quite a bit of money in my pocket.
Here’s some of the best advice I can offer to those just starting out:
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Read, learn and study - no one is going to do this for you. Knowledge is power and power isn’t given, it’s taken.
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If possible get a mentor - having someone hold your hand through your first few deals is so invaluable it’s impossible to put a price on it.
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Do everything! If you need to run ads, run ads. If you need to be at the courthouse 3 times a week be there 5 times a week. If you need to call 10 people a day, call 15 or 20 a day. But the point is do it. Nothing substitutes for action.
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If possible, use a buffer. I live in Los Angeles, CA now, where I can hire buyer’s brokers and agents myself, but I use to live in Tenn. where they never heard of such a thing. If you have them in your city use them. They are better at negotiating than you are, they know the process better than you do and if you make a deal with them then they paid for there service. Tell them what kind of deal you want to do and when they find it they will tell you.
If you don’t have a buyer’s broker consider forming your own company and being an agent for the company. (This is only if you’re dealing with banks, realtors or other institutions) It is a good negotiating tactic to always be the lowest man on the totem pole, that way you’ll “have to get the information for them later” or “have to see what the investors say.” I know some people don’t use this tactic and act as the principal all the way through a deal and it works (and it’s good for the ego), but I’m more comfortable being the gopher or go-between or whatever else you want to call it.
Are there ethical issues with this? I don’t think so, because actually I usually do have partners.
But if you don’t have partners, find some. Even if they are friends and have no stake in the deal at all. More eyes looking at a deal is always better than just my little brain looking at it. That’s why having a mentor is so important. Even if you find a mentor from this board use them as a partner through the deal. I have had four people whom I met on this board who have become good friends and have helped me and I them over the years.
- And this is by far the most important. When I first started (or better yet - didn’t start). I read this board religiously. I read ever post and every reply. Even when I knew the answer. I read the replies to see if some new twist was in the reply. Some of the information came from people I only saw once or twice and changed everything about how I ran my business. Other information came from the vets of this board whom have been here for years. But the problem was all I did was read. I even bought many of the programs. I spent hours and hours and thousands of dollars. And it didn’t make me any money at all. So here’s some advice: YOU WILL NEVER GET RICH READING THIS BOARD OR BUYING ANY OF THESE PROGRAMS! NEVER! NOT ONE PENNY! You will only make money when you start applying what you know.
It took me two years to make my first offer. I knew everything. I had ran ads in the largest newspaper, screened all the sellers, knew the area like the back of my hand, as soon as he told me where the property was, I didn’t even need to look at comps, I knew the market. The guy was out of state, elderly and had renters who were not paying rent. I had a serious don’t wanter if I ever met one. I drove past the house and it was in a nice area, but the house was unclean, grasses growing like a jungle and it needed some emergency TLC fast. I had an attorney friend of mine and a girl that I used to flirt with in the Title Company all ready to go. I met with the seller two weekends later when he drove 150 miles to see how bad the house was. I had three offers ready to go when I met him. Had my explanation for each offer down pat. This was going to be a slam-dunk no matter what and I was pumped and ready to go.
We met in MY office. This was when I worked as a CPA. I welcomed him in offered him some coffee, made him comfortable and I asked him if he’d seen the property and what he thought. Of course he did and he was even more ready to get rid of it than ever.
Then I so smoothly transitioned into my explanation of the situation and how I could help him get from under the burden of dealing with eviction, foreclosure and the courts. I made each offer at the same time, and then told him that, I wanted to give him options so he can pick the one that best fit his needs. If I do say so myself, the explanation I gave for each offer was textbook. A 5 years old could have explained the benefits of a PAC Trust over a L/O with equity sharing when I got through explaining each offer.
I told him if he wanted to go home and discuss it with his wife, it was fine. No pressure. He could call me Monday with their decision. Then I sat back and waited for him to decide which offer I was going to get paid with.
I remember this part like it was yesterday. He picked up the first offer and look at it. Then put it down. Picked up the second and looked at it a little longer. Then put it down. Then pick up the last offer. And held it for what seemed like 10 minutes. Then put it down.
Then he looked up at me and I was waiting for him to say I’ll take the cash offer. But he said, in a voice louder than I’ve ever heard in my life, “Are you @#$%# crazy?” He then continued to use colorful and creative adjectives to describe my offers and me and even some of my family members. Then he walked out and I’ve never heard from him to this day. That was my first deal.
To be honest with you and I have never told anyone this, I cried on my way home. It was like my entire world came crashing down and I was the bigger phony in the world. A friend of mine that I met on this board knew I had a deal going and he called me and asked how it went and I told him what happen blow by blow. And he paused for a moment and then said, oh well, so what other deals you have working?
I won’t go into why that statement was so perfect, but the fact that he knew that this is a numbers game and you won’t knock it out of the park on your first hit. You will get a lot of people shaking their heads no. And everyone will tel you you can’t do it or why it won’t work where you are and even question your intelligence. But none of them are going to make you rich and they are not doing you any favors. I know this because I now drive those same people who told me this stuff is impossible in my 2001 Suburban LS. (I bought it in Nov of 2000 from 1 deal)
The point is take action! Do something! Don’t stop! If what you’re doing is not working change it but never stop. Take action today. Not tomorrow. Tomorrow never comes. Today is always here. So you might as well do it today. That’s my humble advice to all new people getting started. I hope some of it helps. Everyone who has ever posted on this board has helped me greatly.
Oh and as a side note: The house went up for foreclosure a few months after a made my offer. But you can’t get all of them.
QUOTE: Never rely on luck or good fortune, but knowledge, careful analysis, offensive and defensive preparation and action, then you will succeed.
Sun Tzu - The Art of War
Re: Some advice for those just starting out - Posted by Laura
Posted by Laura on June 15, 2001 at 16:17:51:
Steve, thank you so much for taking the time to talk to us beginners! - I have a question, I’m trying to learn all I can to buy my first RE, an apartment complex. You’re suggesting we get a buyer’s broker or an agent… what’s the difference? and what do you suggest for my situation? Thanks for your help!
OUCH! - Posted by Kate (VA)
Posted by Kate (VA) on June 13, 2001 at 14:13:16:
I think I’m going to get a bruise from that kick in the pants (but I really needed it - Thanks!)
Kate
Re: Some advice for those just starting out - Posted by Frank Chin
Posted by Frank Chin on June 13, 2001 at 11:17:49:
Welcome Steve:
Read some of your posts here. Look forward for more, and any war stories you may have.
Frank Chin
Re: Some advice for those just starting out - Posted by Katherine (Fr: Hawaii)
Posted by Katherine (Fr: Hawaii) on June 13, 2001 at 01:44:04:
Steve,
Thank you for that post. I am just starting out, so your post is very inspiring and the advice is sound. Hopefully, I will take action this month and go for it. Still trying to close my very first deal.
Thanks again.
Re: Some advice for those just starting out - Posted by Kevin Smith (N. Va)
Posted by Kevin Smith (N. Va) on June 12, 2001 at 21:27:47:
Steve, I don’t remember you either because I discovered this site about a year ago. Your story was very inspiring and I hope you frequent this site more often. I don’t know you but I am proud of you. I hope to make my first deal sooner rather than later. I too have bought many courses and have read alot.
Keep up the good work!
Re: Some advice for those just starting out - Posted by Travis (Dallas)
Posted by Travis (Dallas) on June 12, 2001 at 20:47:56:
Thanks for sharing the very personal side of your first experience with us. I’m glad that you didn’t give up and are helping others.
I also liked the fact that you rewarded yourself with a new Suburban!
Isn’t it amazing that people will let their house go into foreclosure rather than accept an offer that will help them…Pride causes us to do strange things sometimes.
Thanks,
Travis
So Good I had To Print It! - Posted by Mark W.
Posted by Mark W. on June 12, 2001 at 20:39:27:
Great post Steve!
Being a newbie I really appreciated it. BTW what part of Tenn. were you in. I’m in Chattanooga and I was going to start looking for a “buyers broker”.
Thanks again for the post!
Peace & Prosper
Mark W.
‘Power isn’t given, it’s taken’ - Posted by Ed Reilly
Posted by Ed Reilly on June 12, 2001 at 19:21:13:
Awesome quote! That’s great of you to take the time to write such a wonderfully honest and detailed account of your experiences. I second Randy’s hope that you will be a stranger no more! Continued success and thanks for a great post.
Ed Reilly
Re: Some advice for those just starting out - Posted by Valerie
Posted by Valerie on June 12, 2001 at 18:16:15:
Hey Steve -
I think I would have cried too! I guess that’s what I have to look forward to as a new investor. lol That’s OK, I’ve had worse.
Welcome Back to the board!
Re: Some advice for those just starting out - Posted by Randy JoinerGA
Posted by Randy JoinerGA on June 12, 2001 at 17:18:23:
Nope Steve I don’t remember you, I only found this board in Feb. of this year. However, I sure hope you are not a stranger around here from now on! Your post is excellent, and I look forward to seeing many more from you. Congratulations on your success, and WELCOME back.
Re: Some advice for those just starting out - Posted by SteveS(CPA)
Posted by SteveS(CPA) on June 16, 2001 at 18:36:37:
Laura,
I’m so sorry for not seeing your post sooner.
To answer your question:
What is the difference between a buyer’s broker and an agent.
A buyer’s broker is kind of like a fighter on your side of the ring. A seller’s agent (no matter what they say) works for the seller. He has a duty to disclose certain things but his number one object is to find a buyer who will pay the highest and best price. There is also a built in incentive that the higher the price they get you to pay the more they get paid.
This is not in your best interest as a real estate investor.
A buyer’s broker is a broker who works for you and is paid by you. His job is to get you the property you want “at the lowest possible price” and the best terms.
I have found that a buyer’s broker is a great buffer and keeps you from nosey real estate agents and are much better at handling them.
How do you pay this wonderful person? When you get the deal you want the profit is already built in. So he is basically paying for himself when he finds the deal.
I love using them and even though I like going up against agents and dealing with them. It just makes much more business sense for me to use my brokers instead.
But here’s a word of caution. Make sure it’s a true buyer’s broker company you’re dealing with. I tried to hire an regular agent in tenn to work as a buyer’s broker and what I ended up doing is paying for a real estate agent. He didn’t really know the ins and outs of working for the buyer. Most real estate agents don’t. But find a good aggressive buyer’s broker and I’ll make you a lot more money than you might be able to on your own.
I hope this helps.
Good luck
PS Oh, and they have the same access to the MLS as regular agents do. So you’ll see everything you need to see.
Re: So Good I had To Print It! - Posted by SteveS(CPA)
Posted by SteveS(CPA) on June 13, 2001 at 14:17:57:
Mark,
Hi, I lived in Clarksville, TN (about an hour away from Nashville). But I went to University of Tenn in Knoxville for awhile too.
Thanks for your post I really appreciate all of them.
Good luck finding a buyer’s broker. Let me know how you do.
Steven
Re: Some advice for those just starting out - Posted by waynepdx
Posted by waynepdx on June 16, 2001 at 24:31:04:
That post is so inspiring, I got rejections on my first two offers today,
Thank you for posting that…
wayne