Every so often, I like to circle back around to topics and re-illustrate a point for our readers, staff and even our clients. I happened to be talking to another passive real estate investment company last week and they were asking me about weeding through all the calls and requests they get from potential investors. They relayed that they were getting a hundred or more calls and emails a week from interested investors and often they were spending a lot of time on the phone with no real chance of helping the investor get started. For a myriad of reasons, the investor was not a good fit for their company. I pulled a line from an article I had written almost a year ago to try and help them get over their hurdle:
"In this scenario, the word 'NO' is the most powerful word a real estate professional can include in their business. Developing a knack for when to use it can be the most powerful business accelerator you have ever implemented."
I pointed them back to the article and here is a breakdown of that article and how using no can actually lead to your ability to yes more often.
Say “NO” More To Say “Yes” in Your Real Estate Business
I receive emails every single week from investors who have somehow worked their way into a jam and they want to see if we can help them. It almost always involves having purchased property sight unseen that came to them from a great referral, speaker or marketing piece disguised as a legitimate journalistic piece. The story is always the same and there is nothing we can do to help. The properties are invariably located in areas that we do not operate or they are so over-promised and under-delivered to the client that they are neck deep in debt with no chance to rent or sell. These are the easy “NO’s”.
So when I wrote that paragraph a year ago, I was talking about the easy No's. The times when you know an investor is asking for something that is really outside of your specialty, area of investment or there is just plain no way you can help. Those are the times when offering a quick ear is excellent, but trying to dig deeper is often fruitless and can lead to frustration for everyone. It is usually best to let someone know upfront that are not the solution and help point them in the right direction.
This was not the case with the email I received today. It was from someone who had spoken with my company in the past. Several times. We were very familiar with this investor and he was asking for our help. He had chosen to purchase properties from another company with a less than stellar reputation but at a real cheap price point, even though we had given him very direct advice on the risks when he asked for it 18 months ago. In today’s emails he explained how he had actually purchased not one, but multiple properties here in Memphis and was having some difficulties now with poor renovations and bad property management.
Here is where it becomes very difficult. He wanted to speak with us about managing his portfolio for him, now that the exact trouble that we had advised him on previously was occurring. No sour grapes – it did not matter that we had advised him that the management was poor. It mattered that our company is not set up as a traditional management company. Our management company is set up for the exclusive use of our clients and there is a great deal of value attached to that service. If we were to take on this investor’s portfolio of properties – especially since he is experiencing a lot of turnover and vacancy – it would potentially devalue the service we offer to those clients who trusted us to provide them with properties.
This is a point that is really hard for some companies and may even be hard to tell clients sometimes. In this case, it was difficult but necessary and in the end, not very hard to tell a potential investor no. If we had said yes and helped him with his problem, there was a chance he would purchase from us. But experience had taught us that investors who are attracted to "cheap" are not very good fits for our business. As much as wanted to help, by doing so, we would be putting extra pressure on our own business to manage properties that we knew from the beginning were in poor condition, poorly renovated, and would eat up an inordinate amount of our time and resources. That would hurt our clients and this became an easy no.
Is There a “Perfect Real Estate Investing Client”
We often tell interested investors that by understanding what our perfect client looks like, we are able to honestly point investors in the right direction – even when that direction is away from our company. It gives us the ability to say “NO”.
I do hope that everyone reading this article really latched on to that last statement. It is so important if you are in this industry to understand that you cannot and should not be everything to everyone. If you try to head down that road and are more concerned with making money instead of doing what is right, you end up providing every potential client with a "so-so" investment and an experience that leaves a lot to be desired. There simply is no way to be truly great at anything if you are trying to please every single opportunity that comes along.
Feeling that you can say “NO” when everyone around you would answer, “YES”, is a very satisfying and freeing experience. As a real estate professional, it means that you not only understand what makes you valuable to your clients, but it allows you to treat your most precious resources – team members, time, cash reserves, etc. – as the valuable assets that they are. When you have identified your perfect client, every new program, every incentive, every marketing piece and every use of technology goes toward attracting and keeping that perfect client. There is no more wasting time or energy searching for new clients and trying to invent new ways to keep everyone happy. The days of hopscotching around your business and providing this for one client and that for another client are over.
You are able to focus all of your attention on providing your best service to your best clients. Knowing from the beginning that your services do not match up well with an investors’ needs – AND BEING WILLING TO ADMIT IT – gives you the freedom to say “NO”. The world is full of perfect clients…you simply have to know what they look like when you see them.
We get a lot of compliments at our company about our customer service and our property management. They are two things that we have zeroed in on as a company. Why? Because our clients have identified these two areas as their biggest worries. They have already identified for us that they want to kept in the loop, as often as possible and in a transparent way, with all the happenings of their portfolio. AND...they do not want us to simply rely on email. They want to know that someone actually cares. Last month we spoke directly with 489 clients on the phone. That inter-action is the BIGGEST reason that 63% of closed transactions last year were sold to existing clients. We have found the perfect clients. Their needs matched out expertise and we are doing business together. It is a beautiful thing.
No More Scarcity Mentality In Real Estate Investing
The fact remains that real estate is an extremely popular cocktail party topic and everyone wants to get involved. Whether they can remains a different story, but the desire is there. For some reason, many people have a romantic notion of being a real estate baron and today’s business environment has many wanting to go from dreamer to doer. There are more opportunities today, both in terms of properties and buyers, than ever before. If you are able to operate from an abundance mentality and lose the scarcity mentality, then telling an investor that you are not the right fit or that your service is not the best for them, becomes an easy decision to make. Saying “NO” becomes more about being GREAT for you perfect clients and less about making money or losing opportunity.
The biggest benefit of being willing to say “NO” when you need to, is that your clients will thank you for it. With the higher quality of service they receive from you because of your focus on them, they are willing to not only continue to work with you, but also refer others to your company. The two easiest sales to make are to existing clients and to referrals from existing clients. When they know you are willing to say “NO” to someone else for their benefit, they will give you plenty of reasons to say “YES”!
I read back over that statement from a year ago and, while it may seem self-serving, I am really proud that it is the true sentiment that we operate from. This business is a whole lot more fun when you enjoy it and enjoy who you work with both in the office and as our clients. It really is that simple.
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