In business, the old adage states that “the customer is always right” I disagree in fact the customer is often wrong, both are service-related scenarios and wrong for your business. Customer service is key, however, if someone is being unreasonable ….they are just that unreasonable.  When a customer complains it is actually a valuable opportunity to evaluate your systems, create goodwill by solving it, or determine that a particular customer is not the right fit for your company.

Keep the 80/20 rule in mind here: 20% of customers provide 80% of the revenue for any business – you have the right to choose who makes up that 20% – if you fill that category with as many ideal clients that you can and turn them into raving fans, the other business from tough customers that will drain your resources/margins will be insignificant over time.

There is a metric in sales that states:

1/3 of customers will never buy your product no matter what you say to them

1/3 of customers will buy based on what you say

1/3 of customers need what you offer right then and there and will buy no matter what you say

I suggest that the same guideline be used in choosing your customer base, do don’t want category 1 customers above getting into your organization, this will only created stress and heartache for both customer and service provider. Aim for quality clients more often than quantity – unless you using the Walmart business model and working on being the cheapest in the marketplace, which is a tough act to follow!

To your success,

Tim Reid

Respect The Hustle

The happy new year everyone! This is the time of year where many people will make resolutions on what they will change this year to make it a better year than the last – this will be things like losing weight, finally starting that business on the side (hopefully a real estate business haha!) or calling their mother more often this year. (you should do that too gosh darn it she loves you) However, the elephant in the room is that often the choices that were made by YOU the person staring back at you in the mirror landed you in the life situations that you are currently facing.

The economy has nothing to do with it, the downsizing of the company has nothing to do with it, the government has nothing to do with it.  A person has to take 100% responsibility for their actions – not an overly popular concept in this overly politically correct world. Now, there certainly is something to be said for “you don’t know what you don’t know” – the first step to learning is acknowledging the fact there are things you may not have known that caused some outcomes that could have been more in alignment with your goals.  That is a positive feedback loop, blaming outside factors and not accepting responsibility will not change the scenario you are in.  Taking action having accountability will – not just at the beginning of the year but ALL year.  Where you ARE is YOUR fault, we all struggle with this sometimes but it’s the cold hard truth.

Start this year off right not by making resolutions – set some goals for yourself and your family then create a plan to accomplish them once a step at a time.  What are your goals for 2020?  Contact us and lets us know – we would be excited to help in any way that we can.

To your success,

Tim Reid

Respect the hustle

When you are working with a buyer, seller, joint venture partner in real estate in Calgary, or abroad – you need to just get to the point.  But wait! What about building rapport? What about being likable? (insert other fundamentals of sales here) I would agree that all of those things are important…but the most important resource that we have is our TIME.  The best way to serve your market place in real estate or any other sector is to find out WHO your client IS and who they are NOT.

The fundamental rule of sales is that 33% of people will buy from you because they need the service/product that you sell.

33% of people will buy based on WHAT you say.

33% of people won’t buy from you even if your product was FREE – because it just isn’t something they value.  For example – warren buffet will never buy a Ferrari even though he could buy the whole company if he wanted to, he just places no value on a product like that.

If you or your sales team are spending time trying to convert prospects in the 3rd category then your sales process is in deep trouble because you are wasting your time 33% of the time.

Let’s get clear on your ideal clients in 2020 – they make up for 80% of your revenue anyways.

To your success,

Tim Reid

Respect The Hustle

Recently I had a property buyer that was interested in one of the partners that my partner had in his inventory.  Sounds simple right? We had arranged the time with both the team member that was showing the house and the potential buyer. This was however right before I had left town to go visit family in northern Alberta for a few days.

I already know that I am a “terrible secretary” and make this joke often while on the phone.  Recently my partner and I had been dealing with those that generally do not miss meetings without giving lots of advance notice.  This was a lapse in judgment for sure, the morals are the of the story are the following:

1. always give the 2 parties each other’s numbers so they can contact each other in your absence (even if you think that absence is not likely to happen! Poop happens and you may not be available)

2. Always confirm meetings the day before and the day of – again back to poop happens

3. Keep confidentiality intact where needed and do not disclose numbers of those that could take objection to that (when in doubt always ask)

4. There are certain categories of clients that are less likely to show up that others (ask a property manager that does rental showings often) be aware of these and create systems accordingly.

PS: we help those with low down payments the bank said NO to qualify for mortgages – give us a call for more information.

Happy new year to all! The very best for everyone in 2019

Respect The Hustle

Tim Reid

Whatever business you are in, the most important function should be to make sales. Sounds simple right? I have seen in my travels a lot of companies (some of mine in times past) that are too focused on things that don’t matter at wind up lost in the weeds.

The death of most companies is due to the inability to sell enough products at high enough margins to become wildly profitable. I have heard of very few business failures based on too many sales! However, this is possible if there is a massive influx of orders/customers and the infrastructure is not built to support it and the resulting brand damage is too hard to recover from.

When you have a widget to sell, you need to price it according to the market and what it will bear – at that moment in time. Using real estate as our context: the goal is to make smart buys for the inventory and then be able to manage that inventory by holding it for cash flow or by increasing it’s value and then selling it for a profit.

If that inventory sits on the metaphorical shelf for too long, then it will eat into your profit margins very fast and put investment dollars at risk – one of the advantages of real estate investing as an asset class, so don’t be that guy. Plan your purchases/exit strategy with contingency built in so that you can reduce costs and get sales to happen quickly.

Some times you will have to make little profit or take a small loss to liquidate inventory of any type, real estate is no different – it’s just a very high priced “widget” that you need to continue to cycle through the sales process. Inventory control and planning is a weak point in many businesses that have cash flow issues. Having multiple exit strategies is critical in real estate, and lessons learned from a low-profit deal or a deal that sells at a loss will make your next purchases that much better because you know what works and what doesn’t.

There is often a best case, typical case, and worst-case scenario in anything in business and if you accommodate for all of these in your real estate plans you will be well-positioned to make great profits in any area in which you operate in. The Alberta market place is an interesting one at the time of this writing full of opportunity, learning, and profits.

Respect The Hustle,

Tim Reid

We are back with the next Flipping houses fundamentals: all about the numbers.  The real estate investing game in Calgary has been a bit of a bear market lately.  This has led us to move toward the greener pastures of Edmonton Alberta real estate where the numbers make more sense.  The difficult truth is, that your home turf might be at the wrong part of the real estate cycle for you to make good returns without high risk.  Real estate investing is one of the best investments there is due to the fact that you can mitigate the risk much more than you can with alternatives in the investment world.

When you are evaluating a property for renovation for the purpose you need to consider the following:

1. What is the ARV or “after repair value”
2. What the total cost of renovations will be
3. What is the total “burn rate” or monthly costs you will have to pay during the holding period
4. Total project timeline from purchase to sale
5. How you will market the property

For example, let’s say you buy a house for 450,000 in Calgary and it has an ARV of 550,000

Estimated repairs are 50,000 (this would include updates to the entire house with minor structures such as removing a wall to create an open concept)

The potential spread on this house would be 50,000 (purchase price of 450K+50k=500K leaving 50K leftover)

The common mistake that a lot of investors make is they underestimate costs, and time the project will take.  Often you find some extra issues with a home once you get into the project, and these issues take longer to fix than anticipated.  Also, the time to sell can take longer than you want- that is a reality.

We have 50K to work within our example to pay for the following:

1. holding costs: Mortage, taxes, insurance, utilities = 2000 (this is your burn rate)

if the project takes 3 months to complete and 3 months to sell you will have the following costs to consider:

3 months x2000 = 6000 in holding costs during renovations

3 months of holding costs once renovations are complete 2000×3 = 6000

1500 in legal fees

Realtor commissions of 20,500

Add all that up and we are at 34,000 in costs — 50,000 – 34000= 16,000 in total profit.

This does not take into account any potential price decreases or staging of the home which I would always recommend if possible in your budget.

The above math shows why I like to see 100,000 in a spread for our renovation deals, this is rarely found on MLS where you can get a deep enough discount to make the numbers work in your favor.  The above example would be considered a mid-range renovation, which in my opinion are not viable in Calgary right now due to the value adverse buyers market we currently find ourselves in.

Respect The Hustle

Tim Reid

We live in a hyper-connected yet very distracted world.  Our minds are wired to take in information at all times (which in nature was a great asset to sense danger) and with so many information sources it becomes very easy to become distracted.

This factor leads to procrastination not necessarily because of laziness, but because of instinct.  If your goal is to have consistent motivation, focus, and be as productive as you know you can be, then this skill needs to be practiced just like learning how to play the violin.

Having a crystal clear direction as to where you want to go, why you want to go there, and what it would mean for you/family/customers once you get there is critically important to keeping you on the pathway to reaching your goals.

Airplanes are off course over half of the time on long trips, but the auto pilot keeps adjusting the plant back on course – clarity of your vision is what will bring you back on course in your business or personal life. Further, this clear vision will also allow you to measure your progress to see if the activities you are focused on are getting you closer or further away from that destination.

For instance, if you wanted to grow your real estate portfolio in Calgary, Edmonton, or across Canada to 100 doors in 5 years then you could break down that objective into quarterly and monthly milestones.  What is your vision for your company? Your family? Your community?

Let me know your thoughts.

Respect The Hustle,

Tim Reid

We are back with V3 of the flipping fundamentals series – in this edition, we will be covering how to market for deals in any market.  One of the fundamentals of any business is to have a product that you can sell at a profit, sounds simple right? In concept it certainly is, execution in real estate on this point is more complex than most.  If you were to create a company that sells widgets you would naturally go to the widget wholesale in your area and then create an account, buy inventory, mark that inventory up, then sell it to customers that came into your widget store.

In real estate, there are no wholesale warehouses you can go to in order to obtain inventory at a discounted price. (see rule#1 in real estate – always get a discount)  Therefore, you need to market to the public so that owners with distressed homes and/or distressing circumstances will contact you.  After all, it would be a better method to have the business come to you rather than you chasing the business!

There are a number of ways to market for these properties:

1. Direct Mail
2. Online via social media, website, google ads
3. Door knocking
4. Networking with realtors
5. Networking with mortgage brokers
6. Creating relationships with foreclosure lawyers or insurance companies (IE Genworth, home guarantee)
7. Kijiji and other free classified services
8. Auctions called sheriff sale Canada
9. Foreclosure listing services
10. Driving communities to look for neglected or vacant homes
11. MLS listings over 100 days on the market
12. Wholesale Investors

Because they’re a lot of ways to market your intention to buy houses to potential sellers, I would recommend that you pick 2-3 strategies to focus on depending on what best suits your budget at the beginning of your real estate career in Calgary or your local market place.

Before picking the strategies that you think will work best, you need to define your target market – which means in our context a market such as “ugly houses wanted” or “any condition as is welcomed” these would-be owners that have very distressed properties and may not be able to sell the property the traditional way due to its condition. (you can pick any distressed circumstance that you like to market to)

Once you have your target market (or markets) picked out then you need to craft messages that will resonate with those homeowners to get them to take action and contact your company.  In marketing there is a concept called test, measure, adjust.  Think of your marketing machine like an old FM radio: you pick a station you want (your client) you tune the radio to where you think the best reception will be (your marketing message to be tested) then you see how you did (the reception on the radio or your conversion rate with your customers) then adjust accordingly to get better sound on the radio or more calls and emails from your target market.

This concept is also known as A/B testing where you may have 2 marketing messages running at the same time to see which one is working better then you keep the top performer and then create a new message to test/measure against.

Once you are getting leads, you need to come up with a systematic way to:

1. follow up with the homeowners
2. view and estimate the properties
3. run the numbers to ensure profitability
4. make offers quickly and efficiently
5. Finance the property
6. Flip the property

It is common to go over 100 leads shortlist 10 make offers on 5 and 2 will get accepted and 1 of them will be a profitable deal.

Real estate is a game that is won based on the numbers, we will dive into that area in the next edition with some examples of deals, the process for due diligence, and more!

Respect The Hustle

Tim Reid

Balance in business is B.S – I have to come right out and say it.  Some will disagree withe me on this point for sure…and that’s OK.  I have read a lot of material on success, wealth, and making money over the years and I would have agreed with the “balance camp” in the past for sure.  When I was working in my career as an engineer for a large corporation I was always seeking the fabled “work life balance” that gets talked about often, yet rarely achieved.

I had higher than industry standard vacation days, and in almost 10 years working at that company more often than not I was scrambling to use them all before the end of the year! (it was a use em or lose em’ structure). How does one find balance in that circumstance? There are many careers that face the same dilemma, and we are becoming a nation of distracted/over worked balance seekers.

I feel that there is no such thing as balance in your career, business, life as a whole – I just watched a video by Grant Cardone one of the thought leaders I have a lot of respect for and his stance is that you need to commit to excellence in all areas of your life not just average results in many trying to keep everything “Balanced”. I have to agree 100% because I have made a lot of sacrifices since I chose to leave the corporate world last year, and the further I get away from what most people would consider “balance” the more opportunity I see, more contacts I meet, and the more successful by business becomes.  That is why I think balance is BS.

Respect The Hustle,

Tim Reid