high school it’s easier to date the bookworm girl who is cloistered in the library than it is to date the prom queen. The prom queen has so many more sets of eyeballs on her, so her value is pumped way up and overinflated. There is a lineup of guys dying to get a chance to talk to her because she is visible and well marketed. Avoid the prom queen at all costs and go for the bookworm. With some lipstick and high heels, she can easily be the prom queen, but with much less competition and at a
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much lower cost.
This analogy applies directly to real estate. By the time a house hits the retail market, multiple Realtors® have looked at it, at least one broker, a few secretaries, a handful of assistants, everyone in the seller’s immediate circle, all of the Realtor’s® best clients, all of the broker’s best clients, their contractors, and then all the other retail buyers who get to it first.
By the time the property gets to you, everyone has explored any easy chances for profit, and you are usually too late to the party. Plus, you now have to pay the price that the seller wanted, plus the commissions of two Realtors® and two brokers. Negotiating becomes muddled because the Realtors® always have their own interests above their clients, and sometimes the brokers can complicate negotiations as well.
When all of these “professionals” get involved, prices begin to rise, and favorable terms disappear. All options for good terms or no-money-down deals go out the window because the Realtors® will kill any chances of a “creative deal.” They want to get paid their commissions immediately and do not care about the price or terms of the deal: they just want the transaction to happen regardless of whether the buyer or seller gets a favorable deal.
However, when you become an insider, or partner with an insider, you get first access to deals before anyone else gets a chance to look.
The best deals I have done have come from
1) Other investors who could not close on private deals
2) Private ads I have placed
3) My networks and relationships
Being active in the market, participating in local investor groups, having an online presence, private advertising, and public speaking have created an insider position for me in my market. Being visible and sending a clear message that I am “always looking for deals” has attracted excellent opportunities that are well under market value, under appraised value, 100 percent vendor financed, or no money down. The average person believes these deals do not exist or are not possible in their local market. The truth is that these deals are available everywhere, but you need to
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become an insider or partner with an insider to take advantage of them.
The best deals are made and are not advertised on the market because they never ever make it to market. This rule applies to any market: the best girls to date are not advertised on eHarmony®, PlentyOfFish, or at the local bar. To find real value in life and in the market, we must gain insider access, become well connected and visible, and control the information around us.
The best deals are reserved for insiders; everyone else can pay full price.
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Chapter 7
Buy Time and Talent
I
t always amazes me to see the thought patterns of novice and interme-diate real estate investors. In Winnipeg (my home market) properties
are relatively cheap compared to the rest of Canada. Properties are even considered “affordable” when compared to other markets in Canada. Winnipeg scores very well on the national affordability index.
But here’s the downside of being so affordable . . .
Since properties are “affordable” in Winnipeg, many novice and intermediate real estate investors get lazy and actually use their own cash and lines of credit to buy properties. Eventually, they will always run out of cash or credit, and then they stop growing their portfolios instead of changing their mind-sets. What I see happen in Winnipeg is that we have a good number of investors who have decent day jobs, between one and ten doors (depending on the age of the investor), and their resources are usually tied up or close to maxed out.
To grow the real estate business further, it’s time to think outside the box.
