Who can you call an expert?

And how do you find them?

This week two separate incidents reminded us of several crazy experiences we’ve had ourselves trying to track down “experts” over the years that would help us make money.

About ten years ago, after some real estate training courses that we had taken, we were all jacked up to “go make some easy money” flipping properties.

Nick somehow found some guy who promised he could find us great real estate deals that we could “fix-n-flip” for some huge returns.

So we go down to this guys office and warning #1 pops up.

The office is on the second floor of a two storey strip mall that was extremely run down.

Not exactly the kind of place that instilled confidence.

The hallway carpet was oozing some sort of strange gooey substance as we walked on it.

When we make it inside the office there’s very little furniture and the guy Nick spoke with is sitting behind a very old and very bare wooden desk.

He had a ton of gold bracelets on and huge gold chains around his neck.

And I swear, if memory serves me correctly, he even had a gold tooth.

He could have been cast as the gangster in any Scorsese flick.

When we told him we were super eager to buy real estate, fix it up and sell it quickly for big cash he kinda chuckled to himself and then abruptly threw a print out of a property at us.

Apparently this was some property that he was involved in somehow.  The actual Seller wasn’t him but we could get it for a deal and make a killing.

He really didn’t offer any more detail than that.

And even with all these obvious warning signs we still got excited enough to drive by and check out the property.

I can’t exactly recall what happened next but we must have not liked the place because we didn’t proceed.

About five or six months later I was driving by that same strip mall and decided to stop in.

Not sure why.

By then I had decided the guy behind the desk didn’t care for our best interests but for some reason I couldn’t resist stopping by.

And to my surprise the office was completely empty.  

Even the old furniture was gone.

The door wasn’t even locked so perhaps they had just made their quick escape minutes earlier, who knows.

Since that time we’ve had many run-ins with so called “experts”.

And just this week these two situations came up:

#1 A very good guy from Ottawa, Ontario, who is about to get started investing, emailed us for our opinion on how to find a good Realtor that knew how to work with investors.

One of the agents he was considering had told him, “he could make them more money than anyone!”

In our books, that’s red flag number one.

And I’m not 100% certain of the exact words that were used but that type of talk scares us.

Any “expert” who thinks he is the best and “only one” usually turns out to be a dud.

#2 Another investor from north of Toronto officially got word that his super complicated condo-conversion project finally blew up.  The mortgages got called in (Power of Sale) and he lost $150,000.

Ouch.

He had done his due diligence and had believed that he was working with someone who knew what they were doing.

Here’s what we have found to be pretty universal traits of real experts:

1. True experts are focused on PRINCIPLES and NOT TECHNIQUES.

After years of watching and being involved with our father’s construction business and generally be surrounded by different investors and owners of property it’s amazing that we didn’t figure this out earlier.

Embarrassing I guess.

But now we finally get it.

True experts focus on principles.

Real Estate beginners are almost always focused on techniques.

“I can make $45,000 easy with this new investment strategy thingy … all you do is use these fancy dancy clauses in this agreement with a special closing date that I can change anytime with my super duper power of attorney control over a corporation where I own Special B Class shares.”

We know this type of thinking, because we’ve been there!

Instead, you should be focusing on the details of the property.

What condition is it in?  Where is it?

And more importantly, how will this type of investment look if the worst happens and the tenants leave, the economy turns, unemployment sky rockets and/or interest rates go up by 5%?

What then?

Before making any investment double check your fundamentals.

Are you focused on the techniques, the “sexiness” of the deal or the fundamentals?

If it’s the former, get an objective opinion from someone with experience.

And that brings us to our next point…

2. True experts have seen the Good, the Bad and the Ugly.

They have enough war scars and have fought enough battles that they know what “could” happen and they plan accordingly.

They don’t get pulled into the latest condo conversion project around the corner because although prolonged appreciation has carried the last five projects successfully (and made them look easy) the sixth could be the one that bombs.

And because of that they’re extra hard on the numbers.  And while hoping for the best they are planning for the worst.

They ask that one question about the deal that no one else could.

And they can only do that because of their experience.

They could only do that because they’ve likely suffered losses themselves.

3. True experts know that they don’t know it all.

Have you ever spoken with someone who claims to know all the answers?  Or gives the impression they do?

And they almost get insulted if you disagree with them about anything.

They instantly doubt your loyalty to them and even flash you a bit of cold shoulder.

Yeah, we’ve come across many of those.

They scare us.  We run from them.  Fast.

But every once in a while you come across someone with a wealth of experience but is humble enough to welcome new ideas.

They value their own experience and can back up their claims with facts but recognize it’s impossible to know everything.

They’re the gems.

Keep those ones close.

So how do you find these people?  The good ones.

Well, for us, it’s like dating.

You keep your eyes open for good candidates at all times!

Then you get to know them a little bit.

And it’s better if you work by referral.

By getting all your experts by referral you’re saving yourself time and money.

And you let the relationship begin slowly.

You get to know each other.

You do a little deal together.  Nothing major.

You value their time.  You pay them what their asking.  If they’re good, they’re worth it.

Over time you’ll begin to develop some rapport with them and eventually you’ll earn each other’s TRUST.  

Once you have that type of relationship you’re set.

You’ve found a key member of your team that you’ll be able to lean on for advice over and over again.

They will save you tens of thousands of dollars, even hundreds of thousands.

They’ll save you a lot of grief too.  

You may not even realize how much they’re saving you.

And once you develop this trust with a real expert you end up moving a lot faster.  Accomplishing more in less time than you ever had before.

You begin to find that big deals don’t scare you anymore and you can sleep easy – even if they have a gold tooth.

It’s an investor’s RESOURCEFULNESS.

That often meant he blasted out of locked room by creating explosions out of tooth picks, bubble gum and duck tape.

It was awesome.

Needless to say, he was my hero.

It’s common to hear many beginner investors focus on all the problems they have:

i. lack of capital to get started
ii. lack of time
iii.  lack of experience (fear)

And even experienced investors will take too long to deal with issues that may pop up because of their perceived lack of time.

Which is really just a lack of priorities.

That could mean taking too long to handle a tenant situation or letting repairs go for so long that they turn into major headaches.

However, the very best, the cream of the investing crop, handle things differently.

They are able to magically summon the resources they need almost at will.

They are resourceful.

They have “The MacGyver Factor”.

Let us share a three examples with you:

Both investors had very little free time, busy jobs and busy family lives.

They were both very capable people and handle a lot of responsibility regularly.

However, one is regularly much more resourceful than the other.

Although he had no time to fill a single vacant room he understood that money is attracted to speed and quickly began calling all the other landlords in the area to see if they could spread the word with their students that a single room was available in another house.

He knew some landlords himself and got the numbers of others from old ads posted online on the Off-Campus Housing’s classified ads.

Smart.

He turned his competition into his colleagues.

He offered a small “finder’s fee” for the student and landlord that would bring someone to him.

Within a week the room was filled.

He placed no ads, did not show the room (his existing students did that for him), handled very few calls and completed the task.

The other investor continued to report to us how painful student rentals were because he couldn’t find time to go down and show people his single vacant room.

He was stuck on the “pain” of the situation instead of focusing on what he could do about it.

He didn’t have “The MacGyver Factor”.

After arguing with the phone service for two days about the problem he finally got the number working again but went on to complain how he just couldn’t generate enough calls.

Upon investigation we found that the ads he was running were in the wrong places and were not being updated correctly.

He seemed more happy to be frustrated than to take action.

The other investor had the EXACT SAME phone issue happen to her during the EXACT SAME time.

She quickly “Googled” another service, signed-up for it, called the newspaper to change the phone number in his ad for the next day.

To make up for lost momentum she ordered 100 signs to place on the side of the road around her property.

Not ten signs, not twenty.

One Hundred.

Because she had kids and works in a teaching role she had to go put out the signs in the middle of the night.

And managed to put out all 100 over the course of a weekend!

She received so many calls that not only did she fill that first property with a tenant she used the extra leads to line up tenants for another 3 properties before she even purchased them!

She then quickly went back to her signs and picked them up so that the city didn’t “steal” them from her.

She went on to use the signs several more times with much success.

Same city, same situation as the first investor.

Two different results.

One investor had “The MacGyver Factor” the other didn’t.

Recently we found ourselves reading the book, Setting The Table, by Danny Meyer.  It’s the true story of one of New York’s most successful restauranteurs.

Danny wanted to build a resatuarant in area of New York City that was clearly not ready for it and would require more money than usual.

And he wanted to open up a second restaurant at exactly the same time in exactly the same spot.

We’ve added the bold and italics to the key sentence in this excerpt from the book….

“People began telling me that it would be insane to create, design, staff, and open two restaurants simultaneously in the same space.  It was becoming abundantly clear to me that I would need to take on more investors and more managing partners, and I did.  I did not have the personal funds to build two large restaurants in the space; nor did I have the gumption to go it alone without partners at my side. I began to think intently about where I’d seek financial assistance. I recruited two new colleagues to become my managing partners…”

Notice how he “began to think intently“.

He put extreme focus on how to overcome his challenges – and he did.

It took two years of hard work before the restaurants would open and even harder work to make them successful.

Six weeks before the first restaurant opened the head chef and business partner quit our of fear that the expenses were getting too high.

Danny went on to recruit another head chef after quickly consulting with his business partners for possible candidates.

Head chefs in high-end restaurants can be make or break the restaurant.  Many would crumble in front of such obstacles.

Danny just kept going.

He has “The MacGyver Factor”.

Start looking around at ALL the successful people you know.

Especially the ones who have created their own success from scratch.

We bet that you’ll find that each and every one of them is extremely RESOURCEFUL.

It’s their resourcefulness that gets them past all the obstacles that block others.

Now it’s tim to ask…

How resourceful are you?

Do you have “The MacGyver Factor”?

Time to get busy!

Until next time … be a Renegade!

We make a point of studying great investors, great business builders and it’s our own observation that the very best of them are magically resourceful …

Mike and Ruben share the latest update on the build … the basement is now well under way and the pool has a tent over it still.