Here’s a strategic relations example that will put money in your pocket. In other issues I’ve talked about paying a fee for others to find you customers — it’s like what I was doing buying lunch for customers who referred.
You’re not asking someone to sell for you, just identify specific types of opportunities. But this can go the other way too. Businesses are seeking certain opportunities and willing to pay YOU when you find them.
At age 19, when getting started in business I was a bird dog for a few real estate investors — after months of door knocking I staked out a portfolio of 22 townhouses on Peggs Lane in Lexington Park MD on an owner finance deal.
This bundle of property was owned by an investor who bought them from the developer. Well into retirement, this investor was seeking cash flow — and offering a great deal because he owned these units outright.
First couple of weeks was gathering initial details, talking with this investor, and determining properties were with between $90k and $112k each. This was way too big for the investors I was bird dogging for, and too many properties to flip; so I had to find bigger help.
Pay close attention, this could as easily be a piece of heavy equipment, computer resources, or the inventory you hold every day.
This is what I did next …
A real estate broker friend of mine gave me an outline of what needed done to get started. Including days at the court house searching land records — plus other “homework.”
Here’s what being wet behind the ears really cost me: 22 town houses, $79k each, financed at 6% for 10 years. That’s $19.3k a month in payments. That’s about $512k in equity — which offered some safety.
The problem was that one payment was due at closing and the investor was requiring a bond valued at two payments as collateral.
I personally didn’t have the cash, but it was a great deal. Let’s break it down by property …
- That’s ($1,097) a month including 25% overhead and rent was $1,350. A positive cash flow of $253 a month. Rent rolls said the properties had a 95% occupancy rate, with 50% of properties under a DOD Military Housing contract.
Figured it wouldn’t be too hard to find an investor interested in this opportunity. Plus, with possible repairs needed having partners was the only way to have cash enough to make this possible.
By the way, already had my real estate friends showing four of the townhouses that were going to be sold for cash — and the loan was structured to allow selling up to eight properties. Sales for cash could be used to raise the down payment if necessary.
Through the broker I got connected with a partner who had funds in reserve, plus experience in property management. The only condition was they buy me out of the deal for my fee of 1% of the transaction gross.
That was great because I really didn’t want to manage the properties, and was happy for my fee up front. At 19 I didn’t have the experience to start a property management company, I was already running a computer consultancy. After a quick hand shake it was settled.
With dollar signs in my eyes, after all that’s $17,380 for me at closing, I finished another month of legwork. Fortunately I didn’t go much out of pocket because as soon as I cleared the details they walked off the the deal.
- I found the properties, did all the homework, and once I finished all the paperwork they figured they didn’t need me. This meant days at the courthouse, meetings with inspectors, and lots of legal paperwork.
They didn’t just screw me. The broker who was going to put together closing paperwork got shafted too.
- The broker and I were left waiting in his office while these “partners” drove up to see the investor who owned the property and was holding the note. Seems like they were doing us a big favor.
Sure, could have sued them for breech of agreement but with what — I was 19 years old.
In hindsight I thought the lesson learned was to get a good contract, or to work as a middle person. Both were wrong. The real problem was that I didn’t clearly define my role and get it all in writing up front. Have you ever made the same dumb mistake?
Here’s the lesson and why I went into so much detail sharing my story.
You probably have been swimming around in your head all kinds of details about how this should have been done. Maybe I covered some points you didn’t consider.
The problem was that I was trying to be an investor, agent, sales person, and broker all without having a clue. Sometimes these lessons come hard, fortunately you can learn from my mistakes.
- What I’ve sense learned and have used in my business development practice is to instead be a Finder.
A finder doesn’t sell, they are not a dealer, they don’t even represent a buyer or seller. They simply match qualified buyers with qualified sellers (or vice versa) for a fee!
Think about this … I put in a good three months of real work, waiting in line, making phone calls, and taking on all the risk. Only to have it all walk away because it wasn’t structured.
I didn’t need any fancy tools, just a little knowledge about my place in the transaction. Being a Finder really is the easiest money you’ll ever make, and you can make a fortune doing it.
Jim Straw has an excellent report called “Finder’s Fees – The Easiest Money You’ll Ever Make!” which you can read more about at http://hittpans.phlander.hop.clickbank.net/?pa=13&tid=e12f1005a
Other mentors have introduced the concept to me before, and since 1996 I’ve been collecting small finders fees as part of my business development activities. It’s been a sideline and something I always ask about.
Even recently as today (which sparked writing this report) I’ve discovered someone else interested in paying finders fees. Here’s how I did it.
Wife and I have a modest townhouse in Williamsburg VA. It needed some foundation work, grading of the yard, and a dehumidifier installed in the crawl space. Total for the job $10,250.
As the general contractor was wrapping up today, I asked the question: “How do you usually get customers and handle referrals?” His response, like many of the business owners I talk with was …
- “We generally pay 5% on gross sales for any referral that turns into a project.”
Bingo, I’ll be using what you’ll learn in Jim Straw’s program and what I’ve used over the years. And believe me, I’ll do it right.
There are several other townhouses in my community that need the same work that was done for me. That helps my community and collecting fees makes my wife happy.
I don’t need to be the general contractor, just connect buyers with sellers for a fee. Same when I match of newsletter subscribers, clients, or even my vendors.
It’s just a side line for me, but could be more. I keep a little notebook of “Wants” and “Haves” — mostly to gain good will with clients, but the fees are nice too.
Write if you have any questions. I hope you’ve found this introduction eye opening. Many of the richest men in the world started their careers and a finder — even some still earning millions a year in finder’s fees.
Go right now and get more details about Jim Straw’s program on Finder’s Fees. Details all about it are located at http://hittpans.phlander.hop.clickbank.net/?pa=13&tid=e12f1005a
What he has to say is informative and much clearer than you’ll find from any other source. That’s probably because he has been doing this since the mid-1970s. Let me know when you invest in his program, I’d be happy to trade deals with you.
This is strategic relations at it’s best. As a Finder your only role is to create mutual value between two parties, the accept your commission. It truly is the easiest money you’ll ever make.
Strategic Relations Consultant
Questions? 24/7 Phone Fax: +1 (757) 282-7779
P.S. If you’re interested in my deals sheet, I’d be happy to fax it over to serious buyers. When you have something to sell, or want to buy something specific, write me with details.
Justin Hitt helps business-to-business technical services firms create and keep profitable customers. Through strategic partnerships, opportunity development, and marketing campaign management, Justin Hitt turns business relationships into profits guaranteed. Reply to this message to ask Justin questions.
- Getting to Know You - May 27
- Easiest Money You’ll Ever Make - May 20
- Loyal Subscriber Gift - May 13
- Subordinating Your Competitors - May 6
- Second Chance ASR Membership - April 29
- Welcome to INSIDE STRATEGIC RELATIONS - April 22
- Evolution of Organizational Behavior - April 17
- Biggest Marketing Challenges - March 29
- Business Relationship to Profits - March 26
- What Prospects See - January 23