Last November, we had seven evictions in progress. This did not count several other late tenants that we were trying to work with and had yet to file evictions on them. With a little over 50 tenants, that means that around 20% of our tenants weren’t paying us. That just sucks!

To keep track of our income records, we had created a simple excel spreadsheet to log the incoming rents and the dates they were received. Check out an example of what we were using below.

Most of our tenants had not been trained very well and paid several days late consistently. This created a nightmare because each individual tenant file had to be referenced to find out detailed info about their lease and contact info. Because of everything else going on in the business, we were not diligent in collecting late fees. We had so many tenants that were in the process of being evicted, we did not pursue our late fees on the other tenants. I was thinking that if we did, it might alienate even more tenants.

I knew that something had to change. Once we put the intention out in the world, it did not take long for something to cross our path. One of our employees forwarded an email to me about some property management software called PropertyBoss. The clouds had parted and the lights shined down from the heavens! I downloaded the free trial and we were off to the races.

We ended up evicting 2 of the 7 tenants and today, we have ZERO evictions in progress. We have made far more in collecting late fees from our tenants than the cost of the software. We had more tenants pay early, on time, and online, than ever this month. We were in contact with all of the tenants more than ever over the past months because we had to get them all set up within the software. Every one of our tenants knows that if rent is not received by the 25th, late fees are do and will be collected. Each tenant can log into their account online and see when their next payment is due, what is currently owed, they can update their contact info, and submit a work order if need be.

And we have only scratched the surface in regards to the functionality of the software!

Over the years, one thing that I have learned is that property management must be handled with an iron fist from the get go. You train your tenants how to do business with you. If you give an inch, they’ll take a mile. Now that our property management software tracks everything for us, we can focus on enforcing what’s owed. All we have to do is log into PropertyBoss and see where everything is at. And it’s internet based so I can log on anywhere in the world.

Popularity: 10% [?]

More people attribute their financial success to Napoleon Hill’s classic, Think & Grow Rich, than any other book in the history of the world. That should be enough said to get the point across to any serious student. After interviewing over 500 of the wealthiest men of his time and more than 20 years later, Hill crystallized the science of personal achievement.

I just started reading the book again for probably the 5th or 6th time, and it still amazes me. I have also listened to the abridged and unabridged CDs countless times. But just reading or listening to the book is not enough. You must follow his advice and take the practical steps outlined to achieve the results. As I was writing out my definite chief aim again, I decided I’d share his “Six Ways to Turn Desires into Gold” as quoted directly from the book:

“FIRST: fix in your mind the exact amount of money you desire. It is not sufficient merely to say “I want plenty of money.” Be definite as to the amount. (There is a psychological reason for definiteness which will be described in a subsequent chapter.)

SECOND: determine exactly what you intend to give in return for the money you desire. (There is no such reality as “something for nothing.”)

THIRD: establish a definite date when you intend to possess the money you desire.

FOURTH: create a definite plan for carrying out your desire, and begin at once, whether you are ready or not, to put this plan into action.

FIFTH: write out a clear, concise statement of the amount of money you intend to acquire, name the time limit for its acquisition, state what you intend to give in return for the money, and describe clearly the plan through which you intend to accumulate it.

SIXTH: read your written statement aloud, twice daily, once just before retiring at night, and once after arising in the morning. As you read–see and feel and believe yourself already in possession of the money.”

Several paragraphs later he says, “…you can never have riches in great quantities unless you can work yourself into a white heat of desire for money, and actually believe you will possess it.”

Real estate investor or not, this is extremely powerful advice. In life, you decide who to listen to. Anyone that has studied hundreds of successful men and women and was commissioned by one of the wealthiest men in America to do so has my attention. How about yours?

Popularity: 8% [?]

Earlier today, I was riding around with a friend looking at some houses. He is a fellow entrepreneur and was telling me about one of his businesses. He has created an incredible product that is superior to its competition and can be sold at a competitive price.

He has 10 or 15 clients now but hasn’t sold anything lately. So I asked him, “Why aren’t you making more money off of it?” After going back and forth for several minutes, we came to the answer…MARKETING!

An excellent marketer can sell out an inferior product. I was thinking, “If he has a superior product that can be priced competitively, they should be selling like hot cakes. What’s the hold up?” Well, we figured it out. It’s the marketing plan!

If you want to be an active investor, handing out business cards is not a plan. It can be part of a plan. But you’re going to need more than that.

There are two sides to marketing for a real estate investor. The buying side and the selling/leasing side. If either side is lacking, your profitability is going to suck. If you don’t have any seller leads coming in, you’re definitely not making money…you’re not losing it either but come on. What are you trying to do here. If you already own properties but aren’t able to sell or lease them, you stand the chance to lose a bunch of money.

A Balanced Marketing Plan

On the buying side, you hand out business cards to everyone you come in contact with, you attend every real estate investors meeting in town, an ad in the “Housing Wanted” section of the newspaper every day, mailers going out to houses going into foreclosure, and a website that is optimized in search engines to bring you seller leads. Any combination will do, but it will take a combination to bring in a good deal flow.

On the selling side, a website where all of your properties are listed for sale, lease, rent to own, bandit signs out in the community driving traffic to your site, a newspaper ad, and as simple as this might sound, a sign in the front yard.

There are many ways to market on the buying and selling side for investors. No one way is right. After reading book after book in the marketing field, I know the secret formula. Have a multitude of lead generating strategies and test, test, test. What’s bringing in most of your seller leads? What’s the price per lead? Which lead source is bringing in the most deals? Where are most of your tenant buyers coming from? You get the idea.

No matter what business you’re in, marketing will make or break you. Determine to become an excellent marketer, and you’ve just established your success no matter what field you enter.

Popularity: 9% [?]

When Columbus embarked in search of a new world, he didn’t know where he was going. When he got there, he didn’t know where he was, and when he got back home, he didn’t know where he’d been.

Clearly defined finite goals are the cornerstone of success. If you have yet to buy your first investment property, take out your pen right now and write down the closing date for the property. There is something about the physical act of writing that makes something more real. Until the pen hits the pad, all you’ve got is a vague dissipating loosely held thought that equals one big “someday.”

Someday I’ll take the plunge into real estate. Someday I’ll plan for my retirement. Someday I’ll be rich…more like someday you’ll be tired and broke.

Even if you are a seasoned veteran, having clearly defined goals are what can take you to the next level. When I started reading personal development books years ago, I thought it was interesting that every book that I read started off by suggesting to set goals. I had ignored the excises and suggestions long enough. “If every book I read suggests to write down your goals,” I thought, “there must be something behind doing it.”

How many houses are you going to buy this year? How much cash flow are you going to be making from your investments in 5 years? Write down at least 3 short term goals for this year and 3 long term goals for your investment portfolio. Do it now!

Popularity: 8% [?]

What is the best way to overcome a seller’s suspicion about what your intentions are in buying their house?

Be honest with them!!

You can say, “John and Jane, I want to be real straightforward with you and I hope you’ll do the same with me. The company I work with has to see some kind of way they can make a profit by buying this house in order for this to work. Is that going to be any kind of a problem for you? They typically have to be able to buy a property at around 65-70% of value to make the numbers work in a way that will make sense for them. Obviously they’d have to figure out someway to be able to make a profit doing this or we wouldn’t be able to stay in business very long, right? Also, it has to be a situation that works for you and achieves what you need out of the deal. Does that sound fair? Great!” This simple statement will set you up for success in your meeting with the seller. They already know you are there to make money, so you might as well acknowledge that and explain what kind of deal you must have to make it work for everybody. Enjoy!

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Popularity: 7% [?]

A buddy of mine, Andrew Turner, is building an integrated web based platform for students, parents, and college advisers. His new company, CollegePlanningU, provides things like free SAT prep, the most advanced college planning software on the market, and a mortgage pay down acceleration program all based on cutting edge web 2.0 technology. Andrew and his team have been laboring endlessly to push the company forward, but there are only so many hours in the day. Andrew knows exactly what he wants done in the business and feels that everything is currently at a tipping point.

He is considering leveraging his company to put it on the fast track. Over the last few years, he has operated straight cash and carry. Zero debt. This is a big step for him so he approached me for some advice.

I have recruited millions of dollars from private investors for my company over the years and was happy to help. One of the first things that came to mind was the speed of business today. Nike comes out with a brand new shoe and less than a week later, you can buy the exact same shoe on the streets in China for a fraction of the price. Andrew already knows precisely what needs to happen to get the company’s web applications ready for market. If he were to do it all himself, it could take years. With leverage and the right team of service providers, I asked him to think about the value he would receive from the funds in relation to the importance of speed in business today. Andrew is definitely a minimalist and good financial steward as well so I told him to go for it.

From my experience, I told him that recruiting investment capital was a simple process. We made a power point presentation to guide our investor meetings. It consisted of a business plan, our business model, why it made sense for us to recruit them as an investor, and finally, what we were offering them. Once we had the presentation, a simple formula, “Ask Until” was implemented. I told Andrew to make a list of 10 to 15 people, figure out exactly what he wanted to offer investors, and simply, “Ask Until.” That is all I ever had to do to get funding for our company. Every single person that I met with, regardless of whether or not they invested at that time, was a seed. Many of which took a little while to germinate but have invested and reinvested many times.

Andrew already has a formal business plan and a very professional power point so he is really just a couple steps away. Decide what to offer an investor and “Ask Until.” His enthusiasm alone would get funded if all he did was get out there are start asking.

Real Estate is a big ticket item. Leveraging has been a vitally important tool for our company. Both from private investors and banks. The main thing that anyone has to get over is their fear of rejection. A “no” to me just puts me one more step closer to getting a “yes” and plants one more seed in the soil. The money has been there, is there right now, and always will be available to every motivated, enthusiastic, and organized entrepreneur willing to ask for it.

Using leverage can put you and your company on the fast track. Ask and you shall receive!

Popularity: 8% [?]

In his book, Predictably Irrational, Dan Ariely wrote, “Should you give an employee a gift worth $1,000 or pay him or her an extra $1,000 in cash? Which is better? If you ask the employees, the majority will most likely prefer cash over the gift. But the gift has its value, though this is sometimes ill understood—it can provide a boost to the social relationship between the employer and the employee. Think of it this way: who do you suppose is likely to work harder, show more loyalty, and truly love his work more—someone who is getting $1,000 in cash or someone who is getting a personal gift?

This reminded me of something that we did for our team (our head contractors, employees, attorney, etc.) a little while back. I designated a random week within our company “Appreciation Week.” We sent flowers to a couple offices, gave out gift cards to favorite restaurants (which we had elicited the week prior through a careful line of questioning), and gave out a couple rounds of golf. We hand wrote and signed a thank you note to each individual member of our team.

What an investment! And we only spent about $50 per person. The success of “Appreciate Week” was in part because it was so random. It did not coincide with a holiday or the time of year. It was simply a “thank you for all of your hard work. We recognize and appreciate your efforts.”

I can’t imagine handing them $50 and having a remotely comparable experience. John Dewey said that the deepest urge in human nature is “the desire to be important.” By showing appreciation (especially through a gift as opposed to some cash), our team gained their feeling of importance, and it showed through their hard work.

Popularity: 7% [?]

An upfront contract is an agreement that is structured with someone BEFORE taking someone through your sales process. It is a technique developed by David Sandler and is extremely powerful. Use an upfront contract and you’ll be playing by your rules, not be theirs!

The following script will show you how to effectively set up an upfront contract (the example below would be if you were meeting with a private money prospect).

Me: Thank you so much for meeting with me today. How much time did you see us spending together today?

Investor: Well, I don’t know. How long do these meetings usually last?

Me: We can be done and have all your questions answered within an hour. So, it’s 3:15 now. Let’s imagine that it’s 4:15, your walking out of here thinking that it was a great meeting and really worth your time. What would we have to cover for that to happen?

Investor: Well, I guess you would go over A, B, and C.

Me: Naturally, you’ve got questions, A, B, and C. A lot of people have similar questions. I’ll make sure to go over all of that. Obviously, I’ve got some questions too, D, E, and F. Are you OK if we go over those questions today?

Investor: Sure.

Me: Typically, there are several different outcomes that could come out of our conversation. If at any point, I figure out that we’re not a fit, do you mind if I go ahead and tell you?

Investor: No, not at all.

Me: Good, I appreciate that. Now, if you figure out that we are not a fit, would you tell me?

Investor: Sure.

Me: Thank you. I appreciate that. A lot of people aren’t comfortable saying “No” and my biggest fear is when people say things like “Call me next week” or “Let me think it over” when they really just mean “I’m not interested.“

On the other hand, we may find that we are a fit and that it makes sense to work together. Now, we’re not even close to that yet but if we were to get there, what would you see us doing next?

Investor: I’m not sure.

Me: Well, the next step would be to write us a check to get started investing with us. Anything less than that, I’ll just take as a “No.” Are you OK with that?

Investor: That sounds good.

Me: Great. Out of the things you mentioned earlier A, B, and C, which one would you like to go over first?

That’s it. An upfront contract has been established. I showed appreciation for the appointment in the first place, quantified the time we would spend together (don’t you hate appointments that drag on and on and on to no apparent end), discussed what questions would be covered during the appointment, and established an agreement so that by the end, I get a clear “Yes” or “No” to my offer. “Let me think it overs” will drain the life out of you. Handle that objection before it comes up!

And by the way, DON’T try to reinvent the script! Just memorize exactly what it says and you will improve your closing ratio by a million percent.

Popularity: 6% [?]

You have probably noticed before that sometimes, you just click with some people. Let’s say you are at a networking event. There is always that one person that you strike a conversation with and everything just flows. You both seem to enjoy each other’s company and the entire experience is effortless. On the other hand, you have also experienced those people that are like a brick wall. You can’t get anything out of them. Personally, I find those people a joy to talk to now because I take it as a challenge. How do I have to communicate in order to break through to this person and establish a meaningful connection?

There is a science that explains why you click with some people and not with others. Neuro Linguistic Programming (NLP) is the science of how communication, both verbal and nonverbal, effects the nervous system. One of NLP’s tenants says “the meaning of communication is the response you get.” Soooo, if you are not getting the response you want from, let’s say a seller, the fault is in your communication. What an empowering thought! By taking the blame for the situation, you retain control. Change the way that you are communicating and you’ll change the response that you will get.

And now for the “Meat & Potatoes.” People like people who are like themselves. The question becomes, “How do you become more like someone that you want to connect with?” Matching and mirroring is one of the strategies from NLP used in order to establish that bond and build rapport.

There are many different ways to match and mirror. For instance, your meeting with a potential client at Starbucks for coffee. He orders a tall coffee, sits down and crosses his legs, leans back in the chair, talks slow and lightly sips on his coffee. Here’s what not to do…tell him how much you hate coffee, sit on the edge of your seat, and talk a mile a minute.

When I am with someone or talking on the phone, I will pace my rate of speech to match theirs. If they are a fast talker, I’m a fast talker. If they talk slow as molasses, I’m going to do the same. You can also match their tonality and pitch. I listen out for key words and phrases they use often and toss them into conversation casually. The most important thing to remember here is that all of this must be done under the radar. Imitation, as Shakespeare once said, is suicide. In the past 4 years that I have been studying NLP and actively mirroring and matching, I have yet to have a negative experience.

And speech is just one area. Body movements, demeanor, facial expressions, energy level, and mood are all things that can be mirrored and matched. Pay attention to the details and remember that the whole point of all this is to come across as someone that they know very well. Someone that reminds them of themselves.

Popularity: 8% [?]

We have a property that we recently got back after an eviction. We had to go in and do some cosmetic work, but it wasn’t too bad. The property has now been on the market for a little over a month and is still vacant.

We are marketing the property on a lease option and started off asking $1,975/mo and $6K down. We are now down to $1,675/mo and $3K down. We lowered our asking prices because vacancy is too expensive. Check out our website to see some of our listings. The subject property is 140 Ryton.

There is a woman that really wants the property but cannot afford what we are asking. She can put $6K down, which is good, but can only afford $1,200/mo. For each additional $1K that a tenant puts down, we lower the monthly payment by $25. So that would mean that her monthly payment would be $1,600 with $6K down, and she can only pay $1,200. Still pretty far off.

After discussing this with Dusty, here is what we may do. First and foremost, we will run her credit to see what kind of person we are dealing with. In the past, we have filled properties based on down payment and not credit. For example, $6K down…you’re approved!! On this one, we want a closer look. Also, instead of signing a year lease and option with her, we are only going to offer her a six month term. She can extend her agreement for an additional six months if she is willing to pay $1,600/mo from then on.

If her credit looks descent and she agrees to our terms, we get a good down payment, get rid of a vacancy, and ultimately, still get what we want.

Popularity: 13% [?]