Competition calls - how should I handle this? - Posted by Redline

Posted by Redline on February 27, 2001 at 22:24:54:

I appreciate the support, and yes your son is right.

RL

Competition calls - how should I handle this? - Posted by Redline

Posted by Redline on February 27, 2001 at 11:39:01:

I’ve got ads running and bandit signs, “I buy houses cash” - 2nd week running. Today I get a call from a guy I met about 10 years ago. He’s a bigtime investor (in biz full time 25 years) - leaves me a message. I know him by his name and his voice, he of course doesn’t know who I am (yet) because he doesn’t have a name - just a phone number.

Last I knew of him he was buying ugly houses real cheap - and had rehab crews. He was doing LOTS of biz and I’m sure he still is a major player. Back when I met him we talked a bit and I tried finding deals for him - a bit of a bird dog I guess. He took me around a bit and showed me some properties but I always felt he kept me at a good distance although he always took my calls and would give me bits and pieces of knowledge here and there. Anyway, I soon gave this up and finished school … forgetting RE for many years.

Now it’s apparent my ads have caught his attention and now he wants to chat. I’m sure to “feel me out” and see if I am any competition to him, etc. Now also in the back of my mind is the fact that I’m licensed. Sure I disclose this on all my paperwork and in conversations with sellers IMMEDIATELY… but it’s not in my ad which is probably a violation.

So you can see where this is going … I’m not sure how to handle this guy. I’m sure he doesn’t need any “friends” in this biz and is not happy about my ads hitting “his part of town”. Not to mention I worry when he finds out I am licensed he’ll try to turn the screws on me that way. Worse comes to worse I will drop the license if I have to but you get the point.

How would you guys handle this? Do I call him and just be upfront and acknowledge I know who he is (and disclose I’m a realtor) or just play dumb and keep quiet and see if we can “work together” (yah right). It’s remotely possible because I don’t do rehabs - and I would need an investor to flip to.

My gut says to just call him, be upfront, introduce myself as an “old friend” and tell him I’m now licensed … but I’ve got to admit, this guy intimidates the hell outta me (which isn’t easy to do).

Any suggestions are welcome.

Thanks,
RL

What actually happened … - Posted by Redline

Posted by Redline on February 27, 2001 at 21:59:02:

Well got off the phone with this guy a few hours ago.

I expected the worst (I always do) - but it was what we all expected. He was looking to do business.

He says he’s got tons of projects going on - and cash waiting to invest - but never can find enough deals. Anything I find that I want to “flip” or pass to him he will pay gladly. This works well for me because I will do minor fixup and cleanup but I’m not into full blown rehabs. He is.

Thanks to everyone who lent their advice to this.

RL

Re: Competition calls - how should I handle this? - Posted by Redline

Posted by Redline on February 27, 2001 at 18:45:36:

Thanks for all the feedback on this - it set things into perspective for me.

I am gonna call this guy as soon as I get offline and see what he has to say.

Will keep you posted (for those remotely interested) :wink:

RL

Re: Competition calls - how should I handle this? - Posted by JPiper

Posted by JPiper on February 27, 2001 at 17:46:08:

I was driving through one of “my” areas this weekend. A new competitor…lots of bandit signs out, some near a house I just bought. So as I drove by one the signs (wondering who the hell this guy is), I decided to call him.

In this case he answered. We talked for a little while. The end of it was that I told him if he got a “deal”, to give me a call.

For a minute I thought maybe it was you…but then you’re not in my city are you?

JPiper

Re: Competition calls - how should I handle this? - Posted by Eric C

Posted by Eric C on February 27, 2001 at 15:05:43:

Hi -

I agree with the posters here.

Simply call and ask, “What’s on your mind?”

And shut up.

Even if his purpose is to cause you trouble, you are always better off facing it squarely.

In my business, I come across a lot of deals, most of which I do not pursue. Instead, I offer them to others in my area (competitors) if you will. I’ve purchased properties from them too.

In most locales, there is plenty of room for everyone. A guy with a 100 houses per year won’t even be on the radar screen in some places.

In fact, he could be small enough to slip by the major players, and still be large enough to experience a “credit squeeze”. Many folks in this range have more trouble running the business side of the operation, than the “hands on” side. That means they leave bankers, investors, and beaurecrats (sp?) out of the loop; that’s not always good.

On the other hand, maybe he just wants to chat.

Don’t waste time worrying about it – deal with it.

Yours,

Eric C

Re: Competition calls - how should I handle this? - Posted by Erik Bergerud

Posted by Erik Bergerud on February 27, 2001 at 13:46:08:

I wouldn’t worry, he just probably wants to get an idea of what you’re up too. When you talk to him (and you should) you should say how glad you are that he called. Tell him that you are finding re-hab projects and just can’t handle them all. Then ask if you can flip some of the contracts to him. This guy could really be beneficial to you… believe me. He will probably even send you deals from time to time.
As for as having a licence… if you are not brokering
anymore, I would consider dropping it. It might scare off a big chunk of your FSBO and L/O business. The only good reason to have it if you are investing is so you can have access to the MLS. If you have been a broker you undoubtably have many relationships with other brokers already. You shouldn’t have any trouble having these “friends” get you info off of the MLS. However, if you are good at convincing people that you are not trying to get their listing but just want to buy their house… then you can keep the license. Just keep in mind that FSBO’s are very touchy when a realtor calls (don’t you have to disclose your license in ads and calls?)… and it might keep many from calling your
"I buy Houses" ads.

Re: Competition calls - how should I handle this? - Posted by Ron (MD)

Posted by Ron (MD) on February 27, 2001 at 12:47:48:

Redline,

Just return his call, but don’t disclose more than he does. You’re probably right, that he’s just trying to see what you’re up to. Like I said, I would tell him very little.

On the other hand, he may be of some help to you. He may have properties he needs to unload at a distress price (or terms) that you may be able to work with.

As an example, there’s a company here in Baltimore that’s been around for several years…does well over 100 rehabs per year, heavy advertising (newspaper, radio, tv) and seemed to be a model for relatively small operators (like myself). Further, this company (which I’ll admit did a nice remodeling job) always seemed to sell its houses for prices significantly higher than mine (and others in the area). A year or so ago they set up operations in California and Texas. Well, a few weeks ago there was a foreclosure auction that included several of their properties and next week a few more go up for auction. (Interestingly, these mortgages for this seemingly successful company were personally guaranteed by the owner.) I can only guess what happened, but the point is this guy might have been scrambling to find other investors to pick up his properties prior to foreclosure. You just never know.

More importantly, a few comments about your concern regarding your license. I am also a rehabber and also licensed (with a major regional broker). I have had one “citizen complaint” to the RE commission about my “we buy houses” advertising. My broker just shrugged it off because my company is doing the advertising (as a principal) and my company is not a broker or licensee…hence it doesn’t come under the jurisdiction of the RE commission. As for my broker, they have a standard form that I signed that states that Ron Guy is licensed and Ron Guy does enter into RE transactions that do not involve the broker (although, technically, I never do because I never personally buy a property). So, I don’t know if you are investing through a legal entity, but if you are, I don’t think you have to be concerned.

Ron Guy

Re: Competition calls - how should I handle this? - Posted by B-Boy

Posted by B-Boy on February 27, 2001 at 12:09:26:

G-wiz! This guy has you spooked just over a message. You seem to be worried about what MIGHT happen; what he MIGHT say, what he MIGHT be thinking, etc. Have confidence in what you are doing.

I would handle it like any other call. See what he is offering. If he starts asking you questions, attempt to take control of the conversation. Find out what he’s trying to accomplish. Don’t be afraid of your competition. Did you think that he may have business to give you?

If you can muster up the nerve to return his call – Don’t. Move to the next call.

Good luck.

B-boy

Re: What actually happened … - Posted by Mark (WV)

Posted by Mark (WV) on February 27, 2001 at 22:06:09:

Thanks for the update RL about what was expected ,but was setting here waiting, wow need to get a life don’t I ? My son tells me that all the time LOL

Re: Competition calls - how should I handle this? - Posted by Redline

Posted by Redline on February 27, 2001 at 18:44:27:

No, no, no! Man if I was in your area I wouldn’t be able to sleep at night knowing JPiper was stealing all the good deals! :wink:

I’m in NJ.

RL