Rich Dad Education Blog

Real estate by its nature is a people business. During the course of any given deal, a real estate investor can interact with dozens of various people. In making offers and inspecting properties, a real estate investor can deal with literally hundreds of different people between deals. Without a doubt, real estate is a people business and effectively dealing with people and finding the right people to work with can mean the difference of a lucrative profession or going back to the rat race.

Naturally, as you interact with people, it is important to be professional, prompt, and courteous. As the corresponding article in this newsletter points out, people like to do business with people they like. It is also completely reasonable to expect the same behavior out of the members of your power team that you put together. Finding and assembling your power team becomes one of your top priorities as a real estate investor.

The power team you develop is one of the most important things you will do as a real estate investor, as it is critical to the long-term success and growth of your real estate investment business. Each competent and professional member you add simplifies the real estate equation. That is why it is of utmost importance to not necessarily settle on the first person you come across that fits a role on the team. These may be business relationships that last a lifetime so there is nothing wrong with being a little selective.

Whether you are particular or not, the process of putting together the right power team requires patience as it may take some time to develop. This does not inhibit you from proceeding with your business, just certain transactions will not run as smooth as they would with a fully functioning power team. Simply start putting the team together and delegate the numerous tasks of running your business to the appropriate member.

Below is a brief description of a few of the members of a good power team. Identify the needs of your business and financial situation to determine where you prioritize your time in your search. One note that can be added to each of these is that it is important to find the right candidate for the position.

Appraiser - An experienced appraiser in your market will be in-tune with what lenders' property valuations are at. There are many programs that you can find that can help with comps, but a good appraiser speed tracks this process and has a better feel for the lending environment in conjunction with the homes.

Qualities to look for
Experience in area.
Good standing with regulatory agencies.

Contractors - One of the most practical, essential, and on occasion frustrating members of your power team. Regardless of the area of investing, there will be times you need things worked on, fixed, or repaired. Finding contractors is easy. Finding the right contractors may take some time. Once you find them, treat them well.

Qualities to look for
Licensed and bonded in your state.
Good standing with board that regulates the contractor.

Escrow Company - These companies act as third-party service providers that collect money for you from deals, such as lease/option or seller financing. This is one of the easier members of your team to find. After establishing the legitimacy of the business, the deciding factor on who to choose usually comes down to the fees that they charge.

Qualities to look for
Fees and expenses associated with services

Insurance Agent - A straight-forward member of your team that simply protects you and your assets. The main criteria to look for is a familiarity with the type of assets you need protected. Don't hesitate to get multiple quotes.

Mortgage Broker - In today's lending environment, it would be easy to argue that this is currently the most important member of your team. Knowledge of your particular type of real estate investing is critical so don't be afraid to question the broker thoroughly. If a broker fails to deliver on their first attempt in a timely manner, don't hesitate to look elsewhere.

Qualities to look for
Do you believe their sales pitch?
Do they understand your area of investing?

Private-Money Lenders - It never hurts to have access to these lenders as the quickness in certain situations is worth the tradeoff of a higher interest rate. These loans are typically asset based.

Realtor - The use of Realtors in your power team can appear counter intuitive to some real estate investors. After all, you are attempting to find and receive deals before they even get to the Realtor level. Still, networking with Realtors can provide a large amount of information on your market, access to the MLS to obtain sold comps in area, and to selling prices of homes in your target area. Be upfront with the Realtor and what your intentions are as an investor. Once you find the right Realtor that is willing to provide you information, give him or her any business that would require a Realtor.

Qualities to look for
Knowledge of area.
Willingness to work with you as a real estate investor.

Title Company - Title companies are essential to closing deals and offer a variety of services depending on the company. The company will likely assign you a closer or escrow agent and the skill and experience of this agent in understanding the real estate strategies you are using will likely determine their compatibility with you.

Qualities to look for in agent
Knowledge of real estate methods you are using.
Ability to analyze potential flaws in your deal and propose solutions.

These are just a few of the many members on your potential power team. Other members depending on your circumstances may include property managers, CPAs, attorneys, real estate clubs, coaches, and other people you wish to network with. There is no universally right place to start; your particular situation will determine your needs. Once you do start and find the right people, treat them well. When certain members of your team do an exceptional job, find ways to reward them beyond the normal agreed fees. Excellence can be hard to find in any area and you should never take it for granted.

Real estate investing is indeed a people business. Now go start to find your people.

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To succeed as a stock trader at the highest level, one must have developed analytical skills and a level of discipline that would make a Buddhist monk proud. The stock trader makes his living (or supplemental income) in the cold, impersonal, and unforgiving world of numbers. Technically speaking, to succeed in this world, one does not need human interaction, as even the need to talk to a broker has been eliminated in the last decade with easy-to-use trading platforms. Yet even in this cold and calculating world, developing the right connections with people can greatly increase the likelihood of your success.

The connections with people you develop relationships with in the stock trading world will differ in their dynamics from other fields of investment. Most other areas have relationships built on the dynamic of an exchange of services. The person does X for you (Realtor, investor, etc) in exchange for you doing Y for them (fee, percentage of business, etc). There is absolutely nothing wrong with exchanged-based relationships as they are the heart of real estate and entrepreneurial ventures. Instead of being solely exchange based, the relationships you develop in trading the financial markets will be of a more cooperative nature.

In short, you are looking to develop relationships with other traders, individuals just like you who go through their daily routine of going through a watch list and evaluating the technical aspects of stock charts. The goal here is not to find people who will tell you what stocks to trade, but to find people who are willing to help you analyze the trade setups that occur on stocks you are following, provide information on new stocks that they are following, and talk about relevant news that might affect the trends of stocks, sectors, and the broader market. In exchange, you simply do the same for them. These cooperative relationships can greatly aid both parties in the evaluation of trades that you are looking to make and provide you with insight that might not have occurred to you otherwise.

In real estate, it is highly unlikely that someone finds a great deal and then shares it with a similar network before purchasing. This is not the case for those that trade the financial markets as two people can look at a solid technical setup on a stock and both can enter the trade and share in the rewards. It is unlikely that either of you will be trading the quantity of shares necessary to move the stock significantly and thus both can share in the rewards when the stock behaves as the technical setup predicted it might.

In the relationships I have built around the financial markets, sometimes we talk multiple times a day and sometimes we go days without talking. It completely varies around what is happening with the stocks I am following and what news is occurring. The typical conversation usually begins with one of the individuals asking the other to look at a stock chart. When I ask someone to do this, my primary goal is for them to verify what I am seeing on the technical setup or if I am missing something before I enter a trade. If I get verification from a trusted trader that my trade setup has been correctly identified, then we might spend a minute or two on what a good target for my exit point would be and what my stop should be as well. It's not unusual for the other person to tag along with the trade. Most of the time, all of this just takes a few minutes and we then go about our business.

When someone in my network calls me, I try to give them my full attention and the best analytical opinion I can give. Relationships are always two-way streets and while it might sound trite, I have found that the more you give, the more you receive. Along these lines I try and not burden anyone in my network unnecessarily. I only bring the actual stocks I am ready to trade or pertinent questions to their attention. While friendships naturally develop out of these networks when talking stocks, I try to stay on point as much as possible. I assume their time is valuable and I try not to waste it.

Developing these types of relationships can take some time but it is well worth the time invested. The type of feedback you receive and the discussions that naturally occur make you a better trader. As you start out, many of the relationships that you encounter will simply not be worth pursuing. Oftentimes people want to talk stocks but don't have the technical knowledge necessary to help you in your endeavors. Sometimes people just want to glean your knowledge but offer nothing in return. Not all traders are equal and some simply don't have what it takes to succeed in the markets. You are not developing these relationships to be someone's coach or mentor as you are looking for individuals with similar skill sets to your own. Always remember one good trading partner is worth more than 100 bad ones. The saying less is more is applicable here.

So where do you start in your search for a trading network? The fastest and best option is the Internet. There are numerous trading forums that exist that might lead you to individuals with similar interests. In addition, starting a Facebook or similar type page dedicated to talking stocks might help. If you are continuing your financial education through any type of advanced training such as Technical Mastery or Master Trader ™ delivered by Tigrent Learning, then networking with the people in attendance is a must. This may provide you with numerous individuals who have similar interests and the training to go along with it.

Whatever route you choose, I strongly suggest that you dedicate a few minutes a day to starting and developing this network. It may take some time, but it can help you become a better trader. While you can go at it alone, there is no reason to not develop additional tools that increase your probability of success.

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It is not a secret that people like doing business with individuals they like. People that are likeable simply have an easier time succeeding than those who are not. Whether you are an entrepreneur looking for capital or a real estate investor trying to close a deal, how people feel about you can be the difference between getting a deal done or not. If it has not been a priority before now, you should make it a priority to develop the personal traits that will help make you a more likeable and well-rounded person.

Developing these traits is arguably more important in what some are convinced is becoming an increasingly isolated and unsocial world. For many, the interconnectedness that society once had has slowly deteriorated in recent decades. People simply don't interact the way they used to. This goes from social group activities to the automation that businesses and organizations offer. One can now get their gas, their groceries, and check out libraries books without having to talk to a single person. This can naturally inhibit one's interpersonal skills and can potentially hamper your ability to succeed in your area of interest.

While the following list is far from comprehensive, these simple traits, when followed, can dramatically improve how people perceive you. There are people that go through life living by the mantra of "I don't care what others think of me." While we should never let others' opinions unduly influence our actions, this type of attitude is usually simply an excuse to act selfishly. Do not be that type of person. Develop the interpersonal skills necessary to become someone that people like to be around. The rewards of developing these skills will manifest themselves both monetarily and in the quality of your life.

Be Genuine—We have all met people in our life that we thought were insincere. Outside of outright rudeness, perhaps nothing turns people off more than a person who appears fake and not sincere in their attempts to interact with others. In your attempts to improve your people skills, it is imperative to remember that you are not trying to be something you are not. Most people will be able to see right through you.

It helps if you genuinely like people. While not everyone is going to be your cup of tea, with a little effort you will be amazed at what you find in others and in yourself. Almost everyone has traits and aspects to them that are interesting, funny, and downright enjoyable. Look for these traits, bring them out in the other person and you will be far ahead of the game.

Never Manipulate—Lying, deception, and manipulation all tend to have short-term gains with long-term consequences. What you are trying to accomplish is to develop long-term business relationships. Any attempts at misleading or manipulating those you are attempting to do business with can destroy your reputation and make people unwilling to even entertain doing business with you again.

If the numbers make sense on a proposed real estate deal or if a business plan is well developed, then they will speak for themselves. If there are potential flaws, bring them to the investor's attention. Oftentimes you are selling your proposal and yourself at the same time. Don't let a good deal go south because you appear untrustworthy.

Develop Listening Skills—One thing that you can count on is that as a general rule people like the sound of their own voice more than yours. Peoples' stories and interests are more interesting to them than yours. Ideally, conversations are even-handed and there is a place for your interjection, jokes, and stories. Just be aware that you are not dominating the conversation, interrupting others mid-sentence, or changing topics if the person is genuinely interested in what they are saying.

These simple things may seem intuitive, but if you examine the conversations around you on a daily basis, you will find that these simple rules are oftentimes not followed. People are in a hurry to get to their point, to make the conversation about what they want to talk about, with little awareness of those that are participating in the conversation. It happens every day around water coolers and boardrooms across the country. During all conversations, when in doubt, listen.

Learn How to Respond to No—A lot of people with good interpersonal skills still have a hard time with this one. No one enjoys rejection, yet over the course of your lifetime many of the proposals, deals, and business plans you present will be rejected. Sometimes you won't be able to understand why as you thought the deal was great for both sides and may even be tempted to question the wisdom of the other person for passing on the opportunity. Naturally, don't vocalize this (no matter the temptation) and learn to walk away from the rejection gracefully. You should always be looking long term with all the relationships you develop. A graceful exit today may lead to a yes three months down the road.

The Intangibles—There are literally hundreds of areas a person could work on in developing their people skills. Here are a just a few of the many little things you can do in your development of relationships with others.

Birthdays—Few people are going to ever be upset that you remembered their birthday. A simple text, call, or card can go a long way in how others perceive you.
Names—Forgetting a person's name can be a major faux paus. Remembering a person's spouse and kids names can be a major plus.
Eye Contact—While this can be overdone, solid eye contact lets a person know you are interested in what they are saying. Wandering eyes can be aggravating and distracting.
Buy Lunch—When people are listening to your prospective deal or business proposal, this just makes sense. They are your guest and you should treat them as such.
Smile—No fake cheesy grins here, but who doesn't love a smile? This is one of the most underrated things in business. Most people enjoy working with happy people and are naturally drawn to them.
Avoid Cynicism and Negativity—If people are naturally drawn to smiles, then it makes sense that cynical and negative people push them away. Nobody likes the Eeyore of the crowd.

I know that when I implement the things mentioned in this article, my days are brighter and my overall happiness increases. Yes, there is a potential financial benefit to such behavior as I am more likely to get investor funding or close a deal. Even if there wasn't, it is worth every second of effort that goes into developing these personal development skills simply for the confidence boost you naturally get when people enjoy being around you.

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