This month we interviewed Rob Landry, co-founder and CEO of Four Points Property Management based out of Haverhill, MA. Rob has steadily grown his company since starting it in 2014, and has stood up a plowing / landscaping business, brokerage, and is working on starting an in-house construction company. He also talks about his transition from software sales to business owner, and the stretch of time he was working full time at his day job while running the management company.  If you’d like to get in touch – his info is linked at the end of the interview transcript. Enjoy!

James: What a time to be a property manager…

Rob: Yes, definitely interesting times.

Before we dig into all the craziness surrounding the Coronavirus / COVID-19, can you give us a quick background on yourself, your company, and how you got to where you are?

We founded Four Points Property Management back in 2014. At the time we owned some property and we were looking for management. We weren’t impressed by any of the companies we called, especially around the systems and technology they had in place. I was in technology sales at the time, so I knew what was out there from a tech perspective just saw an opportunity to start a tech-enabled management company.

How did you go from working in sales to starting a management company?

The whole reason I got into sales originally was because of a Bigger Pockets podcast. My goal was to own a bunch of real estate, retire, and spend more time with my family. In 2011 / 12 when I first started exploring real estate, I realized I needed more income to buy real estate. So I decided to move into a sales position at my company and ended up quadrupling my earnings. I wasn’t really in love with sales, but thought it was the means to the end and enabled me to start buying real estate.

And so you decided the next logical thing would be to start the management company.

Naturally

How many units did you have when you decided to start managing for other people as well?

We only had eight or nine units, so we definitely didn’t need to run a professional property management company at that size, but based on how we wanted to grow, we were thinking bigger and longer term. I’ve always been a ready, fire, aim type of guy.

Do you remember your first management client?

Absolutely – I’ll never forget them. We started in 2014 and it was probably a couple months before we even had a customer call us. We invested in a great software platform, Appfolio, so we had all of these features for maintenance requests, tenant / owner portals, online rent collection etc, but we only had our 10 units on the platform. So our expenses were high, but we knew it would allow us to grow and scale up our business. Fast forward a couple months and we still haven’t signed up any management clients. We had done some pay-per-click ads, and had a lead come in through Thumbtack. It was a Sunday afternoon around 3pm when the lead came in, and my family and I were up at my parents’ camp house in New Hampshire. I knew from my sales background that the odds of closing a sale increase immensely if you can call the lead back within the first hour. So I dropped everything and made the call, which lead to another call, which lead to us booking the contract.

What was the property, and what do you think got you guys the sale versus an established management company?

It was just one condo unit they asked us to take on. They had purchased it, lived in it for a number of years and then moved out to the west coast for work. So we’ve never actually met in person, we just did phone calls. I think I did a good job of listening to what their needs were and they trusted us to take care of their property. I don’t think they ever asked how many units we had under management or how long we’d been in business. They saw our website, and we had some good conversations, and they went with us.

So you had enough smoke and mirrors to draw them in, and you had enough substance to keep them around

Absolutely. Anyone trying to run a property management company can tell that the first 100 units are the most difficult. At first we did everything ourselves without any staff. My stepdad was our part time maintenance tech and then when I wasn’t working at my day job, I’d go and take care of the non emergency items.

So at this point, you’re working a full time job, running the day to day of the management company, and going out to units yourself and plunging toilets?

100%. The first couple of years, I’d have a change of clothes in my car so I could go right from my office after work or during lunch to unclog a toilet or whatever the work order was.

How did you find time for all of this, and keep your sanity, and keep your family on board? 

There were years where people at work would be going out for a walk or local restaurant during lunch, and I would sit in an office and make all my calls for the business or go to the bank to make deposits. It came down to making sacrifices in my free time. I also started waking up early so I could get work done before my regular job, which helped me keep time with my family when I got home at the end of the day. I just kept finding ways to sneak more time into the day.

When did you get to the point with your business where you brought in non-family members to help with the business or maintenance requests?

So it kind of all came to a head in the summer of 2017 when we were right around 75 units. I took on a new job that was based out of Texas. It was another sales job and I had the entire east coast as my territory. I was traveling to Austin for training while running the company, and we had signed on a new owner that was bringing on about 30 more units. As you can imagine, trying to onboard these while traveling to Texas was a ton of work. I realized that if I continued on the path I was on, I was either going to fail at my job and my business. I had to commit to one path and go for it. So I took the plunge and went full time into the management business. I figured at the end of the day, if it didn’t work out, I could always go back into sales.

Was there any time where the business wasn’t profitable?

The business is interesting in that you grow, grow, grow, bring on units, and then you hire to support the growth. So it’s almost like stairs – your revenue grows and then you make hires and then your profit flat lines. I can remember the first year me and my brother went full time. We both sacrificed tremendously on our earnings in the business and weren’t paying ourselves much. There were times we weren’t sure if we were going to be able to make payroll. There were nights I’d wake up at two in the morning and just sit in bed and think about everything that had to be done, and I’d just get out of bed and start working. I didn’t want to fail. I didn’t want to let my brother down. He had trusted me and believed we could make this leap and succeed in our business.

In a bizarro universe, let’s say you don’t have a family, don’t have a brother, and it’s just you and the company. Do you think you would have had that same drive and sense of accountability? Would you still be getting out of bed at two or three in the morning to start working?

That’s tough to say. I know that I hate being told what I can’t do, and I had a bad experience in the corporate world so I did have a lot of drive to make it work in my own company. I remember when I had applied for a sales position in my company, and a the day before I was supposed to interview, my manager at the time took me aside. We went into a conference rooms and told me. “I know you have the sales interview tomorrow, but I don’t think you have the personality type for sales.” I really nice thing for him to say the day before my interview…

So he essentially called you boring.

Yeah, exactly. So there I am, I’m being told that I don’t have what it takes. My personality doesn’t match. I could have taken that and said, you know what, he’s right. I need to just play it safe and stay in this dead end job and makes shit money. Or I decided like, I don’t care what he says, I’m going to work as hard as I can. I went with the second option, and I was in sales for five years and exceeded my goals every year. I still use that as motivation. My advice to people is that you have to be self motivated because at the end of the day, if you want to start a business or get into real estate, nobody’s going to be tapping you on the shoulder to say “Hey, shouldn’t you get up to work on this or shouldn’t you put time?” It has to come from within.

It’s interesting that you identify as an introvert as the host of a popular real-estate meet up . Can you tell us a little bit about how you got started with the Haverhill Real Estate Guild and what that’s done both for you and for the community and other investors in the area?

The Havehill Real Estate Guild has actually been going on for 15 years or so. I started attending as a member when I first started investing in real estate investing. Eventually I was elected head of the group, and we’ve grown significantly the past few years. We’ve benefited from having a few rules prohibiting selling your products or services. None of the guests are allowed to pitch or sell anything, The focus is always to just provide value. I want investors, whether new or experienced, to be able to come to a meeting and leave with more information and a closer network. I’ve found that just by doing those two things, we’ve helped the group grow and get better.

So where is your business at today?

Today we have 320 units under management We also have a plowing / landscaping company, brokerage, and are launching an in-house construction company. We’ve never borrowed money for any of the businesses (other than mortgages for our real estate purchases). We’ve bootstrapped them from the get-go. The property management business has historically low margins, but we’ve had success using it as a hub for our other businesses. We’ve gone into related businesses like plowing / landscaping that are more profitable and also help our customers. I think within the next year or two, the plowing company is going to be larger and way more profitable than the management business

And similar to when you started the management company – you’re in the plow at like two, three in the morning servicing the account.

Yup. I don’t foresee myself doing that forever. But until the companies get to a certain size, it’s all hands on deck. Growing a business, you have to be willing to get your hands dirty until it gets that point where you’re able to take a step back.

Not long ago in the fall of 2018, we had houses literally blowing up from the Columbia Gas disaster in the area you manage buildings. I bet you thought that was the craziest thing you would see in your property management career?

It was definitely up there. And I remember that that day. I think we were actually texting. Our company was having a nice happy hour downtown at a bar with an awesome outside patio overlooking the river, and everybody’s phones start going off. The next three to six months we were involved with the aftermath and recovery, getting people switched from gas to electric heat and cooking etc. And you’re right I figured that was the craziest thing we’d have to deal with. And now we’re dealing with the coronavirus and a lot of unknowns on how it will affect our business, residents and owners. There’s no playbook out there, so we’re all trying to figure it out as we go.

What steps is Four Points taking right now for COVID response?

First thing we did was have all employees work remotely. With our technology platforms that really wasn’t a huge undertaking. We also suspended any non-emergency maintenance requests and putting those into a waiting list. This was to help protect the residents and our maintenance techs from potential exposure. As we approach the next rent collection cycle, we’re brainstorming with our owners and other management companies on how best to work with everyone. The financial and economic impacts from this will be huge. I look at the other countries that got hit before us to play out our likely trajectory. Italy is on lockdown. I can only assume that’s likely going to be the case here, or at least with some states / cities. If people can’t go to work, they’re not going to be able to pay their rent. Then the same thing is likely to happen with owners who can’t pay their mortgages if they’re not collecting rent. I don’t even think even the government as a clear outline as to what the next steps are. So there are some things that you can be proactive about but we’re also waiting for guidance from the city, state, and federal government.

Is now a good time to be buying investment property?

I would definitely look hard at downside scenarios. What happens if rents drop 25%? Are you still able to cover costs? I know everybody will do a pro forma and they will take the current rents and project rent growth over time. But I think it’s very important to do the reverse as well to see what you can handle in cast rents drop or vacancies spike. I would also caution people to have plenty of cash reserves to ride out hardships and unexpected capex.

Last question… if you could pick any trade skill to work in the rest of your life, what would you pick and why?

Plumber / HVAC for sure. I don’t think there’s enough electricians either, but you’re always going to have plumbing issues, no-heat calls etc. I can’t think of a reason why that would go away in our lifetime. Plumbers make crazy money and are always in demand. I wouldn’t be surprised if we start a plumbing business soon now that I think about it.

Want to get in touch with Rob? Send him an e-mail at Rob@fourpointspm.net or call him at 888-944-5827 Ext 702

Brandon Hall, CPA, left the security of a position at a Big Four firm to devote himself full-time to his entrepreneurial endeavor. The East Carolina University graduate turned founder and CEO of The Real Estate CPA spoke with Gladstone Capital about the steps he took to responsibly make the leap from paycheck to proprietor, how to sustainably manage robust growth, how to balance a significant other with running a business and more.

On  moving from the Big Four to Entrepreneurship…

The first word that pops in the mind is ‘terrifying.’ You’re leaving a full time job with a nice paycheck and you’re going to bet on growing something.

I had already built out The Real Estate CPA just a little bit on the side, but I needed to reduce my overhead.

To do this, I bought a three-unit building and kept one for myself to live in. I rented out the other two. I was living in D.C. so my initial overhead was $2,000 a month. Once I purchased this three-unit property, it shrunk to about $100.

‘All right, well, now I can leave my Big Four job and my Big Four paycheck, because I don’t have any overhead,’ I thought to myself. That made it much more comfortable.

The skills from Big Four that still come in handy…

I’m going to be forever grateful for the opportunity to work at both PwC and Ernst & Young. I didn’t really learn much in the way of technical skills. I built all of that on my own. However, I did learn a lot about just working with people, managing people and understanding the bigger picture.

For instance, when I was at PwC, it was always a game of how do you get rated the top in the class.  I failed at PwC. I did not jump into that game soon enough.

I didn’t want to play that game then, but at Ernst & Young, I knew exactly what to do. By the time I transitioned there, I knew exactly what to do and how to play. I hit the ground running, and was rated in the top of the class for what I think was two years.

I didn’t do anything different work-wise, but I just knew who to connect with and what projects to work on because of my prior experience at PwC.

If anything, I just learned how to maybe stand out a little bit more, how to build my own brand and how to make people pay attention to you. That’s what I learned at the Big Four.

Surprisingly, I didn’t take much away from a technical standpoint.

On establishing both a cash flow and a presence on Bigger Pockets…

As a CPA, I already had clients.

Before my transition to full-time entrepreneurship, I was only billing clients from The Real Estate CPA once a year during tax-prep. I switched that to a subscription model so that I could  generate the cash flow necessary to function as a full-timer.

Now clients had to pay on a monthly basis rather than one big annual bill.

The beginning of the snowball…

When I quit Ernst & Young, all I had was time.

I believe my business at this point was generating about $70K in revenue. This wasn’t enough to fill up the days. I would just sit around and try to come up with things to do.

That just turned into a lot of writing,  a lot of content building and 

hanging out on the forums. I was just trying to build my brand even more. It was an interesting transition, because that gap of not really having a lot to do really only lasted about a month.

About a month after leaving Ernst & Young, I was on the Bigger Pockets Podcast and I went from having two inquiries a week to having about 30 a week overnight.

I went from working alone in September or October 2016 to having my mom work overtime by the end of the fall. I had hired somebody on the sales side.

‘I can’t deal with all of these weeds by myself,” I thought. It was pretty explosive growth overnight.

On managing what comes after ‘explosive growth.’

We grew really fast. At the end of 2016, I think we had done maybe $90K in revenue. Today, we’re right around $1.3M in revenue.

That quick evolution over the past year and a half has led to a lot of questions about growth, a lot of process building and the addition of a lot of technology.

However, anything we build to tackle growth-related problems we scale out of within three months.

How do you build proficiencies and put people in places that will continue being viable over the next six months as we double in size? I spent much of 2017 trying to figure that out, and I still am.

When you’re an outlier success…

The other problems that started occurring were not necessarily business problems. I was asking really tough questions, like what does growth really mean from here? What do I want my firm to be known for in the industry?

Does this subscription model even make sense anymore?

How much value can we add to clients who have one or two rental properties and aren’t experiencing exponential growth?

We started asking a lot of these hard questions, and we started playing around with our subscription model, playing around with the price, and we got relatively comfortable for about six months.

In the middle of 2017 we’d settled on pretty high prices and relatively standard subscription models. Now we’ve changed all of those again as of last month because we’re just rethinking how we want to grow.

But one of the biggest problems that I’ve faced, again, not necessarily an actual operation problem or what  anybody would think of a business problem, but I’ve joined all these mastermind groups. I’ve hired business coaches, and very few people can help me solve my problems because I’ve grown so fast and I’m a CPA firm. Most people don’t look at a CPA firm and think that it’s something that they can scale to a million dollars in revenue in a year. They look at that and say, ‘We’ll help you get there within five years, or a decade.’

If you look at a lot of CPA firms across the country, they’ve been around for two decades and they’re proud to do $700K in revenue. There’s nothing wrong with that. It’s just that I have very few people that I can talk to about my problem, and I have very few people that truly understand what I’m going through. It’s just been very lonely in just trying to connect with people that really know what I’m going through and can actually help.

On hiring a unique staff….

I don’t have any business partners, but I do have 12 employees. They’re all great and I’ve hired what I call entrepreneurs that were not willing to take the risks that I took. Some refer to them as ‘intrapreneurs.’

They all have the spirit, they all have the drive, and they’re all really committed to growing this firm.

We’ve had a lot of strategy talk internally and I’ll tap them every once in a while. I’ll walk them through what I’m thinking and I’ll gain their perspective. But I don’t have a business partner.

I’ve thought about a partner, purely because I don’t want to feel lonely. It’s a scary place to feel lonely and it’s tough.

I’m in an mastermind group with 70 CPA firm owners across the US and very few of them can relate.

That said, is a business partner necessary?…

I forget which billionaire it was that said ‘If you want to get rich, don’t give away any equity or fight tooth and nail for all the equity possible.’ I’ve always felt that that’s true.

I’ve asked myself if I’ve actually needed a business partner. In my mind, a business partner is one that’s going to shoulder the weight of what I’m shouldering, so they’re going to work Saturdays and Sundays-every Saturday and Sunday- because they love the business.

They won’t do it because I dictate that we must. They are there because they want to be there and they want to grow it. That’s very hard to find.

Partner or no, you will need support…

I recently told one of my clients who has opened his own business and is seeing some early success that ‘It’s going to feel very lonely. You need a support group immediately. Don’t wait until you’ve hit $1M in sales. Do it now.’

The people in these groups are one step ahead, one step behind and ten steps ahead. They’re going to help you grow and they’re going to essentially be your partners without actually having an equity stake.

As for me, I’m trying to take it to the next level. I’m seeking out the entrepreneurs who are running the $10M firms or the $50M firms. I want to connect with them and build a mini-mastermind group there.

On finding the right coach…

It’s always going to be trial and error. A really good business coach is someone that is running a business currently and does not want to take on a coach-ee. Those have been the best business coaches that I have found.

They’re business owners that you have to sweet talk until they finally say ‘yes’ because they can see how committed you are.

On marrying entrepreneurship with your actual relationships..

You have to find somebody who is on your side, even if they don’t completely understand your decision to work for yourself.

You have to find somebody who is going to say ‘Yep, that sounds like a good idea.Yep, go quit your Ernst & Young job, pull the trigger, and launch the business.’

Even if they’re terrified, they have to be on your side.

My fiance has been phenomenal with that.

With actual business stuff, she’s not involved. I don’t want her to be involved and she doesn’t want to be either. So I don’t run purchasing decisions by her. She knows that I’ll evaluate things to the best of my ability and if I feel like I need to make an investment, then that’s what I’m going to do.

We do, however, have an agreement that there’s a certain amount of money that I need to transfer into our personal account every month.

Even though I don’t need to run anything by her, she does have a pulse on the business and she knows what’s going on. I keep her in the loop.

We talk about business growth and strategy as well as where we’re going to be in our personal lives. I think that that’s an important conversation. We basically talk about that weekly.

Matt is a commercial real estate advisor primarily focused on development projects and investment brokerage, specifically in multifamily and industrial properties in southern and central NH.  He’s based in Bedford, NH and leads a collaborative team at NAI Norwood Group, serving business owners and investors as they assess the market, plan for acquisitions, or sell real estate.  Using collaboration, technology, and creativity, his team brings their network of professionals and industry-leading resources to clients in the form of innovative solutions, deal structuring, and advising services.

James:  Can you give us a quick background and how you got interested in real estate?

Matt:  I followed an entrepreneurial path for a good portion of my life. I was around 13 when I started my first company and started making some money. My parents actually made me file my own ftaxes, and by the time I was done, I realized I hadn’t made enough that I actually needed to file taxes that year.

I got mad at them for that.

And they said, “But now you know how to do it, and now you won’t get sued and won’t pay penalties for not doing it.” And so I thought, “Okay, fine. Well, that’s a good point. Maybe I should know these things before I do too much.”

So I started doing that, and by the time I was 17 and went off to college, I already had my first couple years paid for. So I came out of a private college, four-year school, with almost no debt, because of my early entrepreneurial ventures.

James: What were some of those early ventures?

Matt:  Mostly landscaping and cleanups, but I did a couple of other things here and there. I actually had a little consulting business, and I did some trumpet lessons, and I also played Taps for military honors funerals (some were paid, others I did for free).

When I got out of college, I was in IT for a while. I started a couple of IT companies. At that point, I had read things like Think and Grow Rich, Rich Dad Poor Dad, and other books about entrepreneurship, money, and general success.

So I decided that at that point, I should take the path that seemed to be correlated with success, which was real estate. So while I was working a job and living Robert Kiyosaki’s “poor dad’s” life – making good money with good benefits – I walked away from it entirely to go out into real estate sales and investing.

James:  Had you started moonlighting at all in real estate before you quit?

Matt:  I had been dabbling on the investment side. I had put a couple things under contract, which, for various reasons, didn’t go anywhere. But I had learned a lot in the process, and I had built out a spreadsheet with my own manual calculations. Instead of Googling an analysis spreadsheet or something, I literally built one and put together formulas, just based on the things that I knew needed to be there from my experience.

And I had through column AQ in an Excel spreadsheet with various things, out of which only about 12 different columns had to be populated with something … so I could track when things sold, what they sold for, and whether or not I should have gotten into the investment retroactively. And then that’s when I started making offers, once I had enough data that I felt that was comfortable to track it.

And then I said, “Wait a minute. I’m working way too hard, but I’m not working smart. I’m working at this job that I hate, and I’m doing all these things to try to do something I like, so why don’t I just quit this job and go do what I like?” But do it at a better level, and also help people do it, as well.

I didn’t find a good agent. If I had found someone like myself or Matt Lefebvre or somebody else that’s really knowledgeable in the industry, and also conscientious and provides a higher level of expertise and service at once, I wouldn’t have felt like there was that void at the time.

But I didn’t find a me, or another Matt, and when I went out and started learning about things, I learned that probably … I hate to say this, but I don’t think it’s an exaggeration … probably 99.8% realtors out there focus on just residential transactions, or on different types of investor services, and nobody really out there has the heart and the service mission to want to help people that are starting out understand the basic fundamentals that will lead to their success, long-term. I feel like that left an opportunity, though, for someone to show a different level of service.

So I walked away from my job, quit cold-turkey, literally two days after I passed my real estate exam. I hadn’t even selected my brokerage yet. I was talking to three leading firms around, but none of them felt right to me for various reasons.

And then I met who became my initial mentor, who recruited me to her firm. And she was engaged in the daily business of buying, selling, and holding her own investment properties, and she was doing that for about two years before she got in the business.

So I was said, “that’s the kind of path that I can identify with, and I think is highly valuable. So, you’re going to have some experience that will really help me.”

Not too long after that, I decided that the residential agent business, as much as residential investing was interesting to me, just wasn’t going keep me excited for the long-term. So I decided to talk to my managing broker, and she suggested that I reach out to Karl Norwood, who is a respected mentor in the industry.

Little did I know, they had a conversation behind my back, because he didn’t want to do anything that was stepping on toes when he asked me to join the firm. But they had a conversation ahead of time, and we went through and discussed the opportunity that would be there, and I ended up joining the firm.

James:  That’s how you ended up at NAI?

Matt:  Yep. I’ve been here for three years. I spent exactly 365 days on the residential side, and then made the switch.

James:   Do you remember how long it was in between getting your license to completing your first transaction?

Matt:  I do. Six weeks.

James:   Six weeks, wow. That very quick.

Matt:  I did have what one might consider a leg up on that one. I already had my eye on about 35 properties that I had been monitoring, that were what I would consider distressed sales that were not going move at their prices.

I picked a couple of those to focus on. On one property, the tenants were being squawky, and they were torpedoing the sale, so the property was not moving or getting much traction.

So I thought of a slightly roundabout way, and I asked the listing agent to provide me with every bit of information that their seller would allow them to provide me. Surprisingly, I was the first person to ask that, and she handed everything over that he authorized, which was actually a lot of information.

So I brought that to my buyer, who said, “Wow, that’s great information. I feel like this might be a good deal. Can we see it?” I said, “Well, hold on. Let’s think outside the box on this one a little bit, because that’s been the catch on this. This thing hasn’t even had a showing since its price reduction. So let’s do this. Let’s see if we can come to an agreement on the business terms first.”

So I asked him if he would be comfortable putting in an offer subject to a satisfactory walkthrough, and we put in an offer that was … it was below asking, but not substantially. It was reasonable … it was a real offer, with legitimate contingencies.

So sure enough, the seller accepted with no counter within about two hours and called his tenants and said, “Hey, the new owner’s doing a walkthrough.” And that removed the barriers. Because suddenly … instead of feeling like their houses were a zoo where everyone was coming through spectating, they felt like, “Okay, this is finally coming to an end.”

And that was the one main trigger that changed the complexion of the transaction, and it allowed us to get in there, and we ended up buying it for about 65 cents on its appraised dollar the day that the appraisal was conducted.

James:  That’s a hell of a first transaction right there.

Matt:  It was pretty solid.

James:  Pretty advanced tactic. Was that your idea, or did that kind of come through your broker’s idea, or how did you think to do that?

Matt:  I can’t claim 100% authorship, but most of it. I did come up with the majority of that all by myself.

James: Very creative.

Matt:  But it was largely because of several different pieces of advice that I put together from people that I’d learned to listen to along the way. And it was a very exciting way to start my career, though, because instead of going six months to 10 months without income … which I would say is the average … I already had a transaction, and more importantly, I had a story with some credibility.

I’ve built my practice around trying to add value that my clients can’t have themselves. And believe it or not, less than 25% of that has anything to do with identifying a property. It has more to do with analyzing it, how to negotiate, how to proceed, and then what to do to protect themselves from risk.

I have a ton of off-market things, and identifying the property is a massive component on that. So yes, I have a differentiator on that, but I really think that my negotiation skills and my analysis skills are where I really would like people to be focused on why they’re hiring me. Because those are truly a better value-add that lasts, and also more importantly, protects them from risk.

I would much rather have my clients not buy something at all, even if I could have presented them with 10 or 50 things, if those things are going to be financially harmful to them. Because that’s not only going to damage them, it’s going to damage my name, and it’s going nto put them in a position where they can’t buy again.

And that’s truly where I think value is added that a lot of people don’t necessarily understand until they’ve seen it in action, or they’ve heard it in somebody else’s real-life example.

James:  Do you have one good example of a deal where you put all those pieces together

Matt:  So the deal I think I added the most value on was one that I actually put in an offer myself and went under contract for. During additional negotiations while under contract, the seller and I determined that the timeline and terms wouldn’t work for us to do the deal.

And I said, “Well, I don’t want to exit this contract, but I really have to. However, if I haven’t lost credibility with you, which I hope I haven’t, because I’ve been perfectly honest with you, the situation is this. I have another buyer that I think this would a better fit for, and I’m pretty sure that because I saw the value in it, that I can convey that to them if it fits their profile.”

So I spoke to that buyer, and in the end, that buyer ended up closing

on the property. And in the end, I consider that a huge win, because they found a deal that, because I had already built in some of the research and done some of the due diligence, they didn’t have to pay for certain pieces. And they also didn’t have to go through some of the uncertainty, and they didn’t have to go through some protracted negotiations that may not have gotten where they wanted. And I was able to give them some of the paying points that the seller had unintentionally tipped their hand to me about in the course of the negotiations, so that I was able to say, “Well, this is something that they really care about, but they don’t care about this. And I think this is how we create a win.”

And sure enough, we did create a win, and it closed ahead of schedule with a great lending institution that I’d worked with in the past and gave the buyer really good terms. They were able to put less down than they originally thought they had to, and remained better capitalized for any unforeseen things (or for their next deal).

So I guess it was a multi-point win, and one of the reasons why I think it provided the most value is that it was very familiar to them. It was very comfortable for them, because I was very transparent with them with why I exited the deal and why the seller felt that was best, too. And that it wasn’t that the deal was bad, it was just that it wasn’t going to be a mutual win.

And they were able to get into it and pick that up in mid-stream, and when they closed on that deal, it was at less than 50% of their potential shopping list. So instead of trying to find something at the top of their shopping list, I found something that I felt was right-sized for them, and would leave them with enough liquidity that they could respond to challenges.

One of the things that I would want to add to our conversation, is that I think that one of the most important things that people should think about when they’re looking for a fit with a real estate broker, is that they want an advisor.

They don’t want just a broker. What they want is someone that they feel comfortable with, and trust to actually go through the effort and diligence to give them quality information, not just quantity.

The key for me is that when I’m working on a deal, it’s got to be a win for everyone at the table. And I don’t just mean financially. I mean from a relationship standpoint. The seller, the buyer, the tenant, the landlord, the broker etc. Whoever it is, all the stakeholders need to have their needs met. And not just met, but hopefully exceeded.

And that philosophy, I think, is one that a lot of the quality brokers in my industry share. I don’t think that’s exclusive to any individual, company, or anything like that. I think that there’s a lot of people in our community that view it that way. We know who each other are, for the most part, and we enjoy working with each other collaboratively as a result, because the integrity in our industry isn’t perfect to an individual, but it’s definitely of a high standard, and so people on the inside generally know where that integrity lies, and it’s a very, very solid community.

So I think that’s pretty important to our industry’s health, longevity, integrity … and the value that we can provide, I think is enhanced by that, because people that understand that concept, and are careful enough and know how to ask the right questions, they will figure out that the person that they’re working with is very solid, and that’s truly important. It’s not just about the financial win. It’s about the relationship win, as well.

Last weekend at the MIT FinTech conference, Kevin “Mr. Wonderful” O’Leary gave a great presentation on his investment philosophy and some of the things he’s learned over his career. At the end, audience members were able to send in questions – and I lucked out and had my question answered just before he wrapped up.

See his response here:

An interesting response – and maybe more interesting that this is just one area in which FinTech will impact real estate investing in the not so distant future. If you’re interested in learning more about some cutting edge companies and startups poised to shake up the real estate landscape, I recommend taking a spin through CRE Tech and signing up for their news bites.