The most undervalued piece of many investor’s business is their rolodex. In fact, it is often so undervalued that most investors don’t even have one or they don’t work it. The name of the game for real estate investors is how many powerful connections they are on good terms with. This is true for most businesses. Think about the successful real estate investors or business owners you know. Think about how many connections they have with people that help them in their business. But it is not as simple as having a lot of connections. You need to work your connections and add value to them and their businesses.
Some of the connections that are important to have for a real estate investor should include; buyers, sellers, Realtors, mortgage brokers, bankers, title companies, attorneys, leasing agents, contractors and of course Hard Money Lenders. Anyone that can help you with what you are trying to accomplish.
A few weeks ago I had what most people would say was a pretty rough day in my real estate investing business. I had a tenant call me and tell me that the fire department was in front of their house. There was an “explosion” from the furnace and the water heater was leaking water like crazy. About an hour later I got another call from a different tenant. They had a pipe inside the wall burst and there was water gushing through the wall. That same tenant has a sewage pump and the pump went out so there was sewer coming into their home. All of this turned out fine and took me about 30 minutes to solve because I had people that I could call for help. It did not cause me the stress it would have several years ago.
Building the database is as simple as networking and collecting business cards. You can also ask people you trust who they use, and call and introduce yourself. When I was getting started in business, I made a commitment to attend four networking events a week. That is a lot and I did this full time. You might want to make a goal of four or five a month. It is easy to find groups to meet people on MeetUp.com. When you speak to a new contact, don’t just hand them your card. That is so cheesy! I tell Justin and Travis all the time that the goal at the networking event is to collect business cards and not to hand them out. If you have seen me at any networking event you might have noticed that I never hand out a business card unless I am asked. I do however; always ask for your card if we have not met before. We take the cards we collect and add them to our database and then try to add value to them. If we are successful adding value, they will want to do business with us.
Use technology when you can. Outlook is a simple and cost effective way to do this, but any contact management system will work. Two better programs are Goldmine and ACT. Both will cost some money to implement, but both are fantastic ways to manage your contact list. You will want to send regular emails, send cards and make phone calls. Try to show up to networking groups and socialize with your database. You will also want to work to add value to them when possible. Try to produce business for them through referrals, if you can. The idea is to have strong relationships with anyone and everyone that can help you.
One of my best clients has a tremendous database and can find a deal to flip in a week or less. His connections are so strong that he can get deals, work performed, or anything else his business needs with a couple of phone calls. It is truly amazing. He has been able to do this by treating people right, doing what he says he will do, and focusing on helping the people around him. We can all learn a thing or two from people who have perfected the art of database management.