Using the Web and social media to sell real estate

Real estate investment eventually boils down to fixing things and renovating houses, and it doesn’t change if your investor is domestic or international. The difference with an international real estate investor though is that you need to be very precise with your estimate: it is very difficult to ask for more money once you are halfway on the project. People want to feel safe and want to know that you know what you are doing. If you are unable to control and predict your costs then your image will be tarnished. Ask for more in advance!

Managing contractors is an art.

On the other hand, controlling rehab costs and contractors can be challenging and it is an art in itself. In today’s market you cannot really rely on external crews with a general contractor managing everything and providing a “full services”. There are not enough margins to do that and there are too few contractors that really understand the needs of an investors. If you are managing foreign investment money you need to be able to direct the works yourself or closely control them.

I have done several rehab projects starting as a total stranger in this country and I will give you some advices:

1.Start with a small project first, don’t try a major rehab in your first house. You won’t have enough experience to control all the components of the project and the longer the project will last the easier it will be to accumulate delays, extra costs and lose your crew altogether.

2.Develop a trusted relationship with individual tradesmen. Don’t rely on a contractor bringing in “his own crew”. You will eventually build you own team and you will have backups for when you need them.

3.Team up with a local experienced investor to have referrals, but always double check them yourself.

4.Never pay upfront the whole amount of the job and give just a minimum down-payment (the lowest you can negotiate). The more you pay in advance the longer the project will take. You can pay in advance for the material, but always keep a fair amount of the labor payment until the job is completed and you are satisfied with it.

5.Never give the idea to a contractor that he will work for you forever. It doesn’t matter how good he is, make sure he knows that you will ask for competitive bids at every new project and that you will accept them if they are better than his. In this fashion he will keep delivering his best performance and his best price.

6.The most critical areas are structural, roofing, plumbing and electrical, pretty much in this order. Avoid structural damaged houses altogether and don’t tackle major roofing work unless you are already very experienced (repairing some shingles is ok, of course).

7.Contractors are not very good at bidding and they will often underbid so to get a project and then they will escalate the costs during the project. Make sure you validate the costs of the materials yourself before you accept a very low bid.

8.If a contractor is late at his first meeting, he will always be. Find another one.

The rehabbing side of the real estate business is where you can make the most money or lose the most money. Try to be on the right side.

Roberto Mazzoni

P.S. Write me if you want to share some of YOUR experiences with contractors.

This blog has been in existence for over a year now and I have evolved its following the growth of my business and the challenges that I have faced with my family along the way. In the last couple of months it has assumed its final shape and I have been explicitly addressing the Real Estate investing market with a specific attention to the leveraging of foreign capital which is my specialty.

Commercial Short Sales are going to be the next big investment wave.

Here and there I have been sharing with you also some advice on Internet and Social Media marketing tools and tactics since these are my major tools of the trade. I am building relationships in other countries and other continents, so electronic marketing is a must. Since this specific knowledge on social media is growing every day and it deserves its own space, I will launch soon another blog that will be only devoted to that, while this one, robertomazzoni.com, will remain my major vehicle for the real estate investment market with a specific focus on three subjects:

Residential real estate investment, rehabbing and selling techniques.

International relationship building and selling.

Commercial real estate investment, management and selling techniques.

It was an inevitable evolution that, after being successful in the residential markets, my investors would ask me to also open the commercial real estate investment market for them and I am doing it with a strong local partnerships that will allow me to cut the learning curve and share with you some of the most advanced and recent strategies and secrets of this exploding market.

The official beginning of this new huge evolution is going to be an event that will be held in Tampa and that you can sign on on Meetup. It is going to be a ground breaking event on the whole subject of commercial shortsales and loan modifications. There are ample opportunities to make money in this new field with rules of the game that are totally different from the residential world.

The best experts in the field will be there, ready to give you the full picture and to answer your questions. The seating is limited and I strongly advise you to be there is you are in the real estate investing field or would like to get in.

Roberto Mazzoni

P.S. Pass along this invitation to the people you know would be interested in commercial real estate investing, they will be grateful for the quality of information they will receive and for the opportunity of networking with some of the top players in the area.

Did you ever attend to a seminar or a presentation and the guy on the stage was saying the right things, was wearing the right dresses, was moving in the right way and yet you did not feel like buying his words or products?

Do you ever work with some customers that you simply hate? Do you feel that you are making too little money with your real estate job? Or maybe you are making enough money but can’t really enjoy what you are doing? It all looks like another job, but with a 12 hours a day schedule?

Are you dealing with the right type of customer?

I want to borrow a presentation from one of the most respected and influential Internet marketers to date because I think there are some key points that everyone has to assess in order to be really successful and which have to do with choosing a business and a customer that fully resonate with you as a person and which feel completely comfortable for you.

People perceive more than meets the eye and they can feel when you are doing something just because you have to and when you are not really “sold” yourself on the subject and on the actions and activities that such a subject entails.

Frank Kern’s “Core influence” presentation is 2 hours long and is definitely worth watching. I don’t personally agree with some aspects of it, like the “brain or subconscious theory” (I have a much more spiritual approach to life), but the process that he describes is definitely important when it comes to actually find your perfect market and your perfect customer. And he also gives an account of his personal experience with this process.

My take on it is that you’ll never be successful if you don’t take the time to:

1.Define what is the type of life you want to experience and where you want to experience ti and with whom. Having stuff is really not important if you can’t use money or object to live the life you really want to live.

2.Establish what you really enjoy most doing, that is the type of professional life you want to live and what kind of work exactly fits you best. In real estate for example there are a number of strategies and professions one can undertake. Often people look for the most lucrative one that can give the most results in the minimum time and with little or no effort. And they fail or commit to a job that they hate.

3.Figure out exactly what you customer wants to experience, how your properties or services can enhance his life. This brings us into selecting a segment of the market or a type of customer that is closest to your personal inclinations. Some people hate dealing with home buyers and they focus only on wholesaling properties to other investors. Some other people prefer rehabs and like dealing with hammers and drywall. Other people like me prefer the marketing side of it and specialize in creating relationships between people and in tutoring them. In my international real estate work, for example, I am translating between different cultures and actually sell by teaching.

4.Make sure that what you do aligns perfectly with what you desire to do most and is targeted to a customer that is just like you or that needs exactly what you have to offer.

By putting these four elements in play, you will get sales effortlessly and you will naturally attract the right type of customers. This is not something esoteric or complex. It is simply looking at what honestly you would like to do, regardless of constraints or potential consequences, and steer your boat into that direction.

Roberto Mazzoni

P.S. If you want an example of this approach in action look at Frank’s presentation. It’s free.

Recently I met a Realtor who works part time, only in the morning, because she has a regular job in the afternoon. She meets only motivated buyers that are contacting only her to show them very well targeted houses, that means one or two, that they buy in a couple of weeks paying cash.

Real estate doctors.

She spends few hours researching the properties based on very well detailed specifications of her clients and then she spends a few hours showing them to the buyer and, since it is a cash deal, she has no problem getting the seller to come to terms, and she earns her commission every single time.

No driving around tire kickers, no financing issues, no changing minds and most of all no delays. This is all real and happening in today’s market right here in Florida, where I leave, that is one of the most distressed real estate markets in the nation.

Would you like to be in her shoes? I bet you do! How can you get there? Well it’s time to thinks of of the box and get out of the typical “vertical niche” approach that Internet Marketing has tried to force on us (because it works to well for affiliate marketers) but that doesn’t really apply to real estate selling.

This lady, who has been in real estate for a long time, has developed an horizontal market niche approach. In her professional career she has also worked for some major pharmaceutical companies and has developed personal relationships with many medical doctors that were dealing with her for other types of businesses in which they were ALSO making money.

This has created very good personal and professional relationships and who do you think these medical doctors go when they need to sell or buy a house? They go to her of course. Therefore she has only a very definite set of clients, which all belong to the medical profession, and that entertain her services in real estate due to her license and knowledge in that field also.

It is a very simple and dynamic concept that will assure her a market forever. She has created her buyers’ list first and now THEY go to her asking to buy.

Could you develop something similar in your own market? I bet you can. You say you don’t have experience? What’s the matter? It is not important what you know, it is important who knows you. Once you have the relationship secured, you can get mentoring or training and get up to speed.

Roberto Mazzoni

P.S. If you have some aspect of real estate that you don’t quite understand and would like to get some help. Drop me a comment on the blog or on Twitter and I will get back to you.

Today I participated to my local real estate investor association meeting (you see a short video below). The consensus amongst the active investor present there are at least six strategies that are working TODAY in the current market to sell a house.

There are at least six different ways for selling a house today.

Not all of them work equally well in all markets, but again real estate is a field that requires judgment and you will need to figure out by yourself what works for you.

The six strategies are as follow:

1.FHA loans are the king of the hill since they provide a very easy way for home buyers to get into their new home. The qualification process is somewhat stringent: they need to have at least 620 credit score and the house you are selling need to appraise correctly, otherwise they will not get the loan and you will have to reduce the price to what the appraiser has established to drop the deal. Yet there are is a big number of buyers in this category that are using this system.

2.Cash buyers: they are still pretty much around and looking for very good deals, therefore you need a house in good shape that is below current market value (let’s say 80% but this is just to give you an idea – there is no fixed number). Domestic cash buyers are estimated to be 40% of the buyers out there.

3.Lease option or rent-to-own buyers. These are people who can’t qualify for a loan yet, but could qualify later, once they have corrected their credit score. They usually get in the house by paying an option fee (often non refundable) and them by paying rent every month untile they can get a loan and cash you ouy.

4.Seller financing is still one of the preferred techniques in creative real estate transactions. You need a seller who owns the house free and clear and who doesn’t need all the money right now. It is the fastest way to get a buyer since you bypass all of the lending process, but will tie up you capital for a longer time.

5.Foreign cash buyers: they are not so common but yet are out there and can pay cash for close to full market value, if you provide them all the needed services for a long distance transaction and for the subsequent management of the property.

This shows that the real estate market is still alive and kicking even if the rules of the game have changed.

Roberto Mazzoni

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