Posted by Ray(OH) on November 21, 1998 at 10:20:12:
“You can have everything that you want in life, if you’ll just help enough other people get what THEY want”
You are a good man, John Behle
bumble bee vs transaction engineer? - Posted by Ray Richardson
Posted by Ray Richardson on November 20, 1998 at 08:24:46:
Anyone else notice that the just posted Ron Legrand article and Keith Myers’ article about the “bumble bee complex” (which seems to have mysteriously disappeared; guess that solves THAT problem) seem to be making nearly opposite recommendations?
Any veterans want to weigh in on the “specialize” vs “know how to do everything” debate? I’m just embarking on my real estate journey and can go either way, though I’m inclined to specialize, at least until I get my feet under me (think I’m goin’ with L/O’s for starters).
Maybe it’s just a matter of time in the biz. If one is a rank beginner, specialization makes sense to avoid a lot of fumbling around, but as one gets more savvy, one might want to start adding in new areas, technique by technique. Does that sound reasonable?
I recently had fun reading Joe Kaiser’s monthly journal on his site and it was clear he has a LOT of tools in his tool box. Maybe I can be like that when I grow up!
p.s. In regards to Matt Bowman’s Be a Friend article, I wanted to reiterate my praise for the book “Sales Effectiveness Training” by Carl Zaiss. Truly outstanding.
-Ray
specialization is for insects - Posted by karp
Posted by karp on November 20, 1998 at 17:46:55:
As investors we should be able to discuss different styles and have a real world understanding of many of them. As markets change and times change so do the types of deals that will work well. It makes no sense to me to do the same type of deal over and over if it means limiting your exposure and growth as an investor.
It also seems very boring.
The highest and best use of my time is to find many different approaches to this game, systematize them, (which is where their “founders” or authors are often very weak) and then get other people to do the work for me.
I do a lot of lease options but you will never see me at the courthouse.
I did a foreclosure yesterday but I won’t be doing any rehab work.
My mortgage company picked up 40+ loans last week but I won’t be processing them or taking applications.
My commmercial lending business is going great guns but you won’t see me flying to Prague or Moscow. Oh wait a sec…I guess you will. 
At any rate, the primary reason to diversify is so that you can build a system around various ideas which will run on autopilot. That leaves you free to go explore new ideas, build new systems and so on…
Thanks,
karp
aka Karl Hartley
Re: bumble bee vs transaction engineer? - Posted by Bud Branstetter
Posted by Bud Branstetter on November 20, 1998 at 14:53:20:
Ray,
Both people are successful at what they do. What more can you say. The
question becomes what will make you successful. John Behle has an
excellent post “The 3 Essential Ingredients of Success” on that
subject on the cash flow forum. And he is doing yet a third thing.
I have always heard about doing a cookie cutter technique. While I’ve
done a number of similar deals I’m not sure how many dozen it takes
to make it a good cookie cutter. If specializing in a certain cookie cutter
technique makes you the money you want and keeps you happy why would
you want to change. Legrand likes to squeeze the greed glands and make
the most of everything. Is that bad?
I was talking to Steve Smeal last nite about the same concept. He is
concentrating on finding lease options in his new Winston Salem area.
But I asked how many owner financed or discount cash deals will he
pass up finding the one that fits the L/O mold.
If you don’t know how to ask the right questions you will bypass a
number of profit centers.
In a call to a prospective seller:
Do you find out their lowest cash price?
Do you find out if they will do what amount of owner financing?
Will they subordinate their note to a new first?
Will they move their note to a new property?
Do you find out their motivation for selling?
What is their mortgage balance and equity?
Can you get a referral fee/commission from a loan broker for helping
the new buyer they find get a loan?
Can you do a broker a note if they find a buyer?
Are they willing to lease long term with the option to buy?
Can you help them do the lease option if they are less flexible?
I view it as putting the round peg in the round hole and the square
peg in the square hole. Working the MLS, or REO’s is just finding more
inventory. Tired landlords and being a landlord are other avenues.
Some approaches are easier than others. Some lend themselves better to
a full time approach versus evenings and weekends. Any approach or knowing
all of them may not make YOU rich if you don’t enjoy it. I have yet
to regret knowing more techniques or information. Some I’ve had a greater
return on my investment than others. I know I have avoided losing money
because of information I’ve come across.
Re: bumble bee vs transaction engineer? - Posted by Tom Brown
Posted by Tom Brown on November 20, 1998 at 14:02:47:
You’ve got the right idea. Learn to do one general area really well and then branch out. You will probably get off to a better start with less confusion on your part.
By the way, there are dozens of ways to work lease options alone. You may not ever want or need to do anything else.
Lots of Pegs - Round, square, triangular,etc. - Posted by John Behle
Posted by John Behle on November 20, 1998 at 18:12:44:
The way I look at it is to learn it all. Sure, specialize and get something going that makes a profit, but as you knowledge grows deeper - so do the profits.
I think many people make errors with their “Cookie Cutter” philosphies. They step over dollars chasing pennies sometimes. The blinders limit their opportunities. Remember the saying “He who is good with a hammer - thinks everything needs a nail.”
Here’s my two cookie cutters.
-
FIND A DEAL
-
MAKE A PROFIT
Few of my deals are just a round peg or square peg. I think sometimes confusion comes because someone is saying THIS IS UNCONDITIONALLY THE BEST WAY TO MAKE MONEY IN THE UNIVERSE AND YOU WOULD BE CRAZY NOT TO DO IT.
Sometimes it is just personal opinion. Sometimes the agenda is to convince you to buy their course or seminar.
One deal we did last year was a "pre-foreclosure, bad note, foreclosure, rehab, discount refinance, Bank REO, deal. It also involved credit improvement, title improvement, boundary line dispute resolution. With almost 200k profit on the one deal, it might have paid for all the hard cash I’ve put into education.
It might take ten of them to cover the prices I’ve paid in the school of hard knocks and 100 of them to cover the “profits passed” in the deals that went by because I didn’t know how to do them yet.
The more tools, the greater the profit. Sure, start with the hammer, then add a screwdrive, pliers and crescent wrench. Later you add a torque wrench, impact driver, circular saw and nail gun.
It’s simple. Learn all you can about what is making you money and then learn about other related ways to make money. Then you may turn a deal that you would have passed up into an incredible profit (I had NO COMPETITION on the deal I mentioned above).
How about a quick $30k example. Almost 20 years ago an investor brought me a deal because I was running the local investment group. He couldn’t figure it out, so he was just going to give it to me. Someone wiser than me at the time might have just said “thanks” and bought him and his wife a nice dinner.
Instead of taking the deal, I showed him how to make $30,000 on the deal. I charged him $1500 in consulting fees - it should have been the other way around.
He was running around trying to get his nothing down cookie cutter all over everyone. After fruitless negotiations, he as an afterthought at the door asked them “how much would you take all cash?” They quoted him a price that was 67% of fair market value. Because all he had was a “hammer” he was stumped. He knew I had a few more tools in my box, so contacted me. I used those tools to make him $30k.