Author: Randy King (18 articles found) - Clear Search


Ebb And Flow

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The Ebb and Flow

It’s an interesting phenomenon, the ebb and flow of membership at the Madison REIA.  Turns out, it tracks closely with most REIAs across the country, but it does not track at all with most professional networking associations.  I wanted to understand this curiosity a little better, so I took a closer look.

First, let’s define what this ebb and flow is all about.  Through social media, search engine queries, and referrals from individuals and organizations, people find their local REIA.  The individual referrals are the best because they are person-to-person and all about explaining value received by one person explaining it to another.  It’s like seeing a great movie – you share it with people.

But those organizational referrals can be a double-edged sword, especially if the referrer is a “fly-in guru” that has come to Madison, talked people into parting with their money for a “boot camp” or personal coaching, and then admonishes them to go “find your local REIA” on the premise that this is where you will really learn what this stuff is all about and interact with like-minded people.

While the latter points are entirely true, the problem is that it’s the guru laying claim to having discovered this awesome resource just for you and, consequently, you now deserve to “step up” to a more advanced coaching program where you’ll really get the juice.  But that juice is expensive, as you may already know.

With all these sources funneling into the REIA, a few people will look closely at the value that they might get from being a part of the association, and they sign up as members. This is the flow of membership increases. Read More...


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Why Dogs Bite

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I’ve had some discussions lately with coaching students about marketing.  One student was perplexed and somewhat upset, understandably, that “nothing is working”.  So, we drilled down into his work to see if we could uncover something.  I asked what he was doing for his marketing.

“Direct mail” was the answer.  Good, that’s a great way to reach out to a lot of people and get decent results; although this was clearly NOT the case for this guy.  Now, I should mention that I have seen his marketing letters and they are really great – to the point, clear, and all about helping the prospect.

So, naturally, I went to “quantity” and found that he was doing about 100 a week.  Not an avalanche by any means, but certainly enough to generate a response or two from time to time.  But, “nothing” is what he claims to be getting.  Absolutely nothing.  Makes no sense, really.

Later that same day, another student approached me with a couple of questions and remarked that he was fielding a “bunch of leads”.  “Wait a minute”, I said with this earlier conversation in mind, “where are you getting these leads?”  Oh, direct mail, talking with REALTORs, and friends.

So, the first thing you could rationally conclude is that he had multiple streams of marketing going on, but with all things being equal, he should have had little or no response from direct mail.  Not the case.  He was getting the lion’s share from direct mail response.  He was having good conversations. Read More...


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Back on the Horse

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You’ve no doubt heard the expression that if you “fall off the horse”, the best thing to do is to “get back on the horse again.”  OK, that’s cute, we get it’s “insider meaning”, which refers to anything that you’ve done before that you’ve failed at for any reason, the best thing to do is to try again.

It’s a little subtler than that, too, of course.  It also refers to things that you may have been doing and were interrupted from doing for events outside of your control.  In other words, no so much that you failed at anything, but perhaps you were just stopped, for whatever reason.

So, this is my one-year celebration of pulling myself back on the horse – the horse of life.  You see, one year ago, a team of surgeons, acting as a team of rehab experts that included a framer, a plumber, and an electrician, rehabbed me.  They took my heart out, re-plumbed the feed lines, and put it back.

How I got to that point is anyone’s guess, and the team of cardiologists who looked at my heart muscle and say that it’s a strong as a horse’s, just the feed tubes got clogged.  They believe that there is a large amount of heredity in that equation.  Who knows, really.

I never actually fell off the horse, either.  I stopped the horse, I said “something’s not quite right”, got off the horse, and sought assistance from my health-care coaches.  No one forced me to “do” anything, but what they did do was make strong recommendations for that rehab I described above.

Once that was done, they told me to go home and let the automatic processes of the body rebuild the damage and the trauma caused by the surgery.  Then I got handed off to another set of coaches that guided me back to re-building physically. Read More...


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First, Do What You Love

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I’ve had many a conversation with people who believe that they want to step into real estate investing, and the topic of “why” ranges widely.  Many people have seen the shows on HGTV, read Rich Dad, Poor Dad by Robert Kyosaki, or otherwise have been exposed to this real estate thing and got interested.

There’s a real problem with finding what you want to do in your life on T.V.  Realize that the very first priority with a television show is to generate viewership and, hence, advertising dollars.  When that show happens to be one about rehabbing or, as they call it, “flipping”, things can really go sideways.

Real life often does not make for the best television viewing.  For example, talk to health care professionals and ask how much of the T.V. show “Grey’s Anatomy” reflects the real world.  Often, eyeballs will be rolling upwards.  Staff at Grey Sloan Memorial goes through more of their own trauma than they are servicing.  And it makes for great television – I am an admitted addict myself.

So, what’s “off” about the HGTV rehabbing shows?  Well, they only show the three most exciting things about a rehab:  1) an awful distressed property, 2) construction that goes smoothly, usually done by one star of the show (Chip Gaines comes to mind), finished on time (yeah, right), and 3) a completed project that blows your mind.  Throughout, they find points to add extreme drama, like when the mold is detected, or they need to add a $5,000 furnace -  the music gets ominous and we break for commercial. Read More...


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What’s Next for You?

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Used to be that when you found what you did in life, that was that.  The cobbler was a cobbler until he died.  The blacksmith was a blacksmith, the engineer was an engineer, the doctor was a doctor – all until they retired or died.  Well, it’s just not that way anymore.

Some years ago, I knew somebody who was a great electrical engineer.  He was a whiz at circuit design and worked for a company around Chicago that designed and built small controllers.  One day I met up with him and he told me he was back in school.  I assumed he was going for his masters in EE.

Quite the contrary, he was in pre-med and had already arranged for an internship at a hospital across the country.  Wait, what?  No, seriously – what are you up to, I asked.  That was it – he was serious, and he actually did it.  Years later I heard from him and he was a surgeon somewhere out west.

You see, something called to him and he acted on it.  He didn’t allow himself to be pigeon-holed into being an engineer forever, even though he excelled at it.  As a surgeon, the hours were long, the disappointments huge, but the successes were massive – for him.  And if you think about it, those two worlds are not that far apart.  He spent a lot of time diagnosing and fixing circuit problems before.

What really struck me was the conversation he had around money.  It figured somewhere near the bottom of the list for him; his happiness was up at the top, and he was fully prepared to take a position at a rural hospital in a poor area of the country or even practice in a far-away land where money was no object because there really wasn’t much.  And still he would survive – probably thrive – on his joy. Read More...


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Must Do, Should Do, Could Do

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When you’re rehabbing a house for re-sale, you’re faced with deciding which approach to take to make that house sellable without overbuilding.  How do you do that?  Well, largely, it comes from experience and mentorship, but there are some general “rules-of-thumb” that you can employ to help you choose.

We break our rehab lists into three categories; the “Must Do” list are those things that would prevent a retail buyer from obtaining a loan (FHA restrictions), or something that will surely be caught on a house inspection that we would have to fix anyway.

These things include an old (15+ years) furnace, an old (10+ years) water heater, a fuse box or a breaker panel manufactured by Federal Pacific Electric (FPE) or Wadsworth, a decaying or “frito-ing” roof, broken or damaged components such as doors, walls, windows, flooring, cabinets, or countertops, or certain “handyman special enhancements” that are clearly code violations, just to name a few.

The next list is the “Should Do”, and it includes things that are likely to sway buyers into the “buy it” camp.  Since kitchens and bathrooms are the biggest factors in house-buying decisions, these are things like updating the kitchen and bathroom cabinets and countertops, faucets, sinks, and lighting.

This is where things get a little fuzzy.  Depending on the current market, some of these things can slide between the “Should Do” and “Could Do” list.  If the market is strong and houses are flying off the shelf, you don’t have to do quite as much, although doing so can cause a house to move fast. Read More...


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Market Condition

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I was talking with a friend the other day, and she said something I hear a lot: “oh, you must be having a tough time in real estate with this market”.  I’m not quite sure what aspect of the market that she was referring to, but I assured her that in my area of the real estate market, there’s never a tough time.

How can that be?  Interestingly, where people get their “data” is from news reports, and we already know that the news outlets love nothing more than bad news.  It’s sooooo dramatic and sometimes sad, but somebody’s got to get the word out there, right?

Well, we know that the RETAIL real estate market has its cycles.  First, there’s the micro-cycle of local seasonal conditions where a lot of real estate is transacted in the spring, and not so much in the fall and winter.  Of course, this seasonal cycle depends on where you are in the country, too.

Then there’s the macro-cycle of the housing industry at large.  The best recent example of this was the precipitous descent we took around 2008 when prices crashed through the floor.  People were trying to dump their houses left and right – some from fear, some for legitimate reasons.  Didn’t matter.

And that visibility is about the retail side of real estate – the buying and selling of homes by people who occupy those homes.  That’s not our side of real estate, where we look at a different cycle and different market conditions.

Now, it would be folly to say that those retail conditions have no impact on what we do – they surely do.  But those conditions don’t dictate an “up or down” market for real estate investors.  When you tell that to people, they don’t understand how that could be. Read More...


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What About the Sellers?

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There’s so much to write about in the world of real estate investing, I could go on forever.  But the one aspect that we don’t talk about too much is the impact we have on the seller of a property.  Many people assume that the seller is a faceless bank and that this is just a financial transaction.

In fact, most of the property sellers that we work with nowadays are just normal folk, and their need to sell ranges from “I am desperate and need to sell NOW” through “I’m looking for a more easeful way of getting this done” and everything in between.

For example, last year we purchased from someone in Baraboo that had listed her property twice over the prior 18 months, got plenty of offers, and even got two of them accepted.  The first one fell through at the bank, then the second one did the same thing.

The problem was viability/insurability.  While it was of little or no immediate impact to her, the furnace and water heater were on their last legs, and the electric panel was all fuses.  These are things that, when the bank does its due diligence, can cause the deal to fall through during underwriting.

Clearly, she was frustrated and a little worried.  There was no way that she could afford, or even want to afford, replacing those things.  And to make matters worse, the house used to be a duplex and had two (2) electric meters.  She got two electric bills each month, one for upstairs and one for downstairs. Read More...


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Push the Reset Button

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This week, I’m waxing philosophical on perhaps the most important “pillar” of our little association here in Madison – it’s the “Life Pillar”. The Madison REIA is built on the three pillars of Networking, Education, and Life and we always have some great things to say about the first two, so it’s time to focus on that third pillar of living life – a life that you love.

When your PC or phone or other device starts acting wacky or not doing what you expect it to be doing, most experts will advise you to simply reboot and that will clear everything out and start fresh. We would all be well-advised to do the same thing for ourselves from time to time. And there’s nothing like a good slap across the back of the head by the Universe to get related to this, as I did this past January.

Imagine, here is a former racing cyclist, training 3 days a week at super-intense cardio levels having “bad heartburn” that wouldn’t go away during training. What’s that about? At first, the good folks in the E.R. couldn’t figure it out either. Heart strong as a horse, EKG perfect (later, I found out that they call this “non-ST”or “NSTEMI”), but blood work-up showed a marker called Troponin, an indicator of heart muscle damage. Turns out, I had hereditary heart disease that blocked enough coronary arteries that I needed to be cracked open and fixed up. Filleted like a walleye.

I was remarkably calm all that week in the hospital from Tuesday through Friday, the day of the surgery. I just continued working (have laptop will travel) and all was good. The first real eye opener was meeting all the good folks in the O.R. at St. Mary’s Madison when one guy said that he operated the heart and lung machine to keep me alive while they removed my heart to work on it. Wait, what? It’s like dropping the engine of a ’57 Chevy to pull the head and change the rings. My humanity and mortality became quite present in that moment. And in the next moment, I was out like a
light for what seemed like 3-5 seconds when it had been about 7 hours.

Today, back at it full steam, I still work hard, mainly because I love everything that I do, from coaching people on real estate investing through writing, to developing business processes and programs for our
REIA. Oh, and the occasional construction project or two, just to keep my fingers in the mix. But I have learned that I need time off the grid, off the projects, walking, riding my bike, vacationing, doing whatever I darn well want to – if it is enjoyable and completely different from what I normally do.

This is my reset button and I love pushing it. Not only does it keep me recharged, it makes everything else that I do so much more powerful and effective. It’s a hard thing to wrap your head around – that if you stop working, when you come back you’ll be working better and more effectively. Of course, this only works if you really take the time to really do a reset, and not just some other kind of work. Kick back, relax, enjoy, live life with your loved ones. And the key is to do this reset frequently; a small version once a week, a bigger version once a month.

I am blessed with the ability to do just this because of my career in real estate investing and the freedom that this brings in my life. I am grateful that what I do allows me to stop and relax pretty much whenever
I want to. And it helps to love the stuff that I do when I’m not relaxing. Still, doing that with a passion means that I put a lot of energy and responsibility into it. Relaxing is relaxing. Brainless. No thinking. Whatever YOU do in life, look for ways that you can hit the reset button. It can be tough with a 9-5 job, but there are things that you can do that, if you look hard enough, will give you the reboot you need.

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Be Careful Out There

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I’m on a safety and protection kick this month, so going to roll with it.  This time, let’s talk more about liability protection for your awesome rehab.  This is especially poignant right now because it’s a little difficult to find general contractors (they’re all booked solid), so the natural instinct is to find anyone that can fog a mirror while operating a worm-drive Skilsaw.

I know, I’ve been there.  It’s frustrating, the clock is ticking on your rehab and you can hear the money flowing out of your pocket into your private lender’s.  Not that you don’t just love your private lender to death, it’s just that you want to get on with the next one and keep things moving, right?

Here’s the potential problem with hiring Ted & Ed’s Most Excellent Carpenters, Inc. for your project.  You may have scored a good new find for your projects, but each and every time that you get a new contractor on your projects, acting as a general or a specific trade, you have to check a couple of things.

First, make sure that YOU write the contract between you and your contractor(s), otherwise the terms will all be in favor of the contractor.  If S/he refuses, hard as it may be, you should walk.  You have not experienced pain as difficult as having your contractor not showing up on your job site because s/he has taken on other jobs along with yours and there’s no contract language.  Tick-tock on that private money.

That’s a whole world of discussion and exploration to talk about contractor agreements; we spend an entire class session discussing it in our REI Blueprint Course.  But the one thing that you must have and must follow-through on is your contractor’s liability insurance or bonding, along with that of the subs. Read More...


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