The Power of Strategic Relaionships

Terms such as "relationship skills", and "value add" are words that are foreign to us when we go through school. Yet, when it comes time to set out as an entrepreneur, the knowledge on how to create value add in relationships, and demonstrate a strong willingness to create rewarding strategic partnerships with people, will be one of the key differentiators between successful investors and those that flounder then fail.

If you’ve followed my materials until this point, you’re very well aware of the emphasis I place upon constructing a proven "power team" from the beginning of your business. Developing this power team is a great business practice that can really enable your investing empire to survive and thrive. But if you don’t know what you are doing, you can really put yourself into a bad situation. You need realtors and contractors as well as you need great lawyers, investors and accountants. You’ll need a great team to help you become the successful investor and mould your business into the empire you want it to be.

No employees to manage. No salaries to pay out of your own pocket. The majority of the people you deal with in these relationships are fee-based, and if you treat them right, will reward your business continuously with great work, solid motivated seller leads, private investment financing, and provide you with a database of motivated investor buyer’s and partners for your deals.

There is tremendous Power in the relationships you develop, and should make it a core focus of your business to serve then interests and not screw them up.

Because it’s your business name out there which you have to guard and create a brand from. For instance, if you neglect the “hands that feed you” so to speak, by not treating these members of your extended enterprise with respect, and manage them improperly, since it’s your business name is on each property contract and not their’s, you could find yourself facing law suits, mounting debt, and possibly responding to collection actions. That’s not a good start or place for anyone to be. In the end, when you develop a relationship with a potentially strategic partner, let them know how you see yourselves working together – and know exactly what you are promising before you promise it. You should conduct yourself with integrity, and live up to your end of the bargain as they say. If you sign a contract, know that you can fulfill it even if things don’t go planned as you would wish.

Here’s an example that I’m sure is familiar to most of you subscribers reading this write-up. Investor A finds a contractor to do some work on a house where Investor A had obtained a stated-income loan because he claimed to have a commission-sales type job, so the contractor might agree to full payment once Investor A receives the loan. But because this is the investor’s first real estate deal, and know just enough investment knowledge to be dangerous, they’ve asked for a little more than the home is worth. Inevitably, when the processor receives the market analysis from the appraiser, they find it overvalued, and black list Investor A. Further, because Investor A guaranteed the contractor the job, the contractor has said no to other projects and now that he has no job, has an angry crew and is incurring a revenue loss. In the end, Investor A has managed on their first time around to anger a local mortgage company as well as a general contractor.

Bad Reputation
The buck doesn’t stop there. Regardless of the size of your marketplace – whether it’s a large city like New York, or one like Vail, Colorado, the real estate industry is a small one. And a bad situation tied back to your name will stick in the back of everyone’s minds and – especially if your marketplace is smaller than Los Angeles – get around quickly to other Realtors, lenders, contractors, and investors. Why? Each of these ‘trades’ if you will have local industry associations and network meetings. Granted they compete with one another, bur quite often Realtors run into each other on deals with their clients, large lenders use small mortgage brokerage to package up and get rid of loans, investors attend regular club meetings, and many sub-contractors swap crews so often they almost know everyone by name.

From the beginning, you want to steer clear of a bad reputation. On the first botched deal in this example, Investor A didn’t know what they were doing. Word of mouth will get around quicker when it comes to negative things.

The buck doesn’t stop there. Homebuyers represented by Realtor’s in your market will be steered clear of any of your properties. Undoing any bad karma created in a relationship is virtually impossible. If this were to happen with your power team, you’ll have to convince them to go ahead and take a risk on you. And who is going to want to help you make any deal successful anyway?

So, remember how powerful relationships in the property investment industry are to your business. Even if all you do is flip properties on the net site unseen, you still need to work at arms length with a few ‘power team’ players to get the deal done – and even in cyberspace, it’s important to create long-lasting relationships. . If you’re starting out, take it slow and don’t be in a rush to get everything done at once, and promise the world to everybody. Focus on building a foundation, a strong power team, then when you find a great first real estate deal, treat it like a new born baby you don’t want to drop. Protect it and your good business name with your life and make sure that every person you are building a working relationship with will respect you for doing your part and fulfilling your end. GREAT businesses are built off the backs of great people whose job it is to serve one another. It’s these businesses who embrace the power of strategic relationships that will dominate their market, and "survive ‘n thrive" as I call it for decades to come.

Brad Wozny
Founder, www.INSTANTRealEstateSolutions.com™
Creator, 7 Figure Profits™

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