Keeping it RealEstate

When to fire a client

mike@greatlakerealty.com (Mike Kalis) — Fri, 20 May 2022 19:43:58 GMT

When to fire a client

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From Bird Dog to Billionaire: A Creative Guide to Real Estate Investing - By Mike Kalis - creonline.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:17:21 GMT

From Bird Dog to Billionaire: A Creative Guide to Real Estate Investing - By Mike Kalis - www.creonline.com

by Mike Kalis | Dec 14, 2016 |

Creative Real Estate Investing , No Money Down , Real Estate Investing Strategies |

From Bird Dog to Billionaire: A Creative Guide to Real Estate Investing - CREOnline

If you’re an aspiring real estate investor, you may feel like you lack the capital, connections, and overall “know-how” to get started.
I don’t blame you.

Don’t get stuck at the starting line.

Unless you have piles of cash and tons of free time, buying a bunch of investment properties probably doesn’t seem very practical — or possible, for that matter.

Here’s some good news: You don’t necessarily have to “buy” homes to invest in real estate.

And even better, you don’t need to fork over $20,000 for some scammy class that teaches you the “secrets” of investing.
Everything you need to know about taking your first foray into real estate investing can be found right here in this article.
Yep — you can learn how to make millions as a real estate investor in the time it takes to pop a bag of popcorn (or do both at the same time).Become a Bird Dog

If you lack investable cash and know next to nothing about the real estate industry, begin your investing journey by bird-dogging. What the heck does that mean?

Bird dogs are those who provide leads to investors. They pound the pavement in their local communities, searching for distressed or undervalued properties.

They listen to the gossip about who’s moving and who’s facing foreclosure — and they provide this vital intelligence to investors and firms across the country.

Many companies — mine included — happily pay bird dogs thousands of dollars each time an investment opportunity they delivered pans out.
As a bird dog, you’re accomplishing three key tasks:

You’re making connections in the industry
You’re learning about all the different ingredients that go into the investing process
You’re making money you can put toward properties in the future

“Control” Your Destiny (No Money Down)

As I mentioned earlier, “buying” a property is just one way to invest in real estate. That’s the traditional route — one that requires upfront cash you may not have lying around.

Luckily, there’s a creative side to real estate investing that doesn’t have to require loans or down payments. Taking this route, you don’t technically “own” the properties you’re investing in. Rather, you have a “controlling interest” in them.

That’s the path I took as a 20-something with little cash to my name, and it helped me build a $300 million portfolio of more than 2,000 single-family homes. Sure, it’s highly illiquid — but…

I’m seeing cash flow
I’m shouldering much less risk, and
I don’t owe a single penny to the banks

Here are the three creative deals I used most when building my portfolio — they’ll allow any aspiring investor to get started today:

Lease Option to Save a Home From Foreclosure

If a homeowner loses his job, falls behind on his mortgage payments, and faces foreclosure, you can do him a huge favor by working out a lease option.

You agree to temporarily transfer the mortgage to your name, catch it up on its overdue payments, and charge the homeowner rent in the meantime.

Then, once he finds a new job and gets his finances back in order, the “option” part of the deal kicks in: He can “buy” his home back from you at a fair and predetermined mark-up.

Say, for example, a foreclosure-facing homeowner still owes $100,000 on a $200,000 property.

You can take over the mortgage, charge him a rent rate that equals the monthly payment, make the back payments yourself (which, for argument’s sake, we’ll say costs you $3,000), and then a few years later, sell the house back to him for $120,000.

All told, you get to pocket $20,000 on a $3,000 outlay — that’s a 500%+ return on investment, all while buying under market and selling under market and helping someone save the equity a bank would have taken!

Land Contracts

Land contracts are a creative way to get seller financing on investment properties — ones you ultimately flip for a profit. In this scenario, you’re dealing with people who own their home outright, but because of age or other circumstances, they can’t maintain it and need to move out.

They’re aiming for a specific price, but the house is currently very undervalued due to its condition. Here’s where you can swoop in and draw up a land contract that grants you control of the property.

You guarantee the owner you’ll sell the home by a certain date for the desired price, and from that day forward, he or she serves as your unofficial lender as you spruce the place up and elevate its price tag.

You agree on a time frame for the project and agree to swap your sweat and tears in work for some of the upside. For example, let’s say you guarantee a homeowner she’ll get $100,000 for her home, but you know it will be worth $150,000 after you install new carpets, bathroom, kitchen, landscape, and repaint all the walls.

Assuming the materials cost you $20,000 (plus some sweat equity, because you’re young and can DIY the labor), you’ll pocket $30,000 once the house sells!

“Subject-to” Deals

Here’s another great way to bail out homeowners who are on the verge of foreclosure and profit from your generosity. A subject-to deal officially transfers their deed to your name and allows them to walk away unscathed even if they have fallen behind.

You assume responsibility for everything — back payments, monthly payments, taxes, upkeep, and more — and they get to move on with their lives debt-free. Though the homeowners end up seeing no return whatsoever from their properties, often, they’ll happily pounce at an opportunity to avoid catastrophe and save their credit.

Subject-to deals can lead to big-time paydays for investors. When you take over a delinquent mortgage, you’re gaining control of an asset with no money down and no bank loans in your name.

Then, once you catch up on the back payments, you can create a great cash flow opportunity and control the potential upside of the property.

You Don’t Need Money to Make Money

Entering the realm of real estate investing won’t be the easiest thing you ever do, but it’s certainly not the exclusive “need money to make money” world you may have thought it was.

After earning your wings as a bird dog, take a creative path to investing that requires little cash and builds lots of equity.

I’ll see you at the top.

From 4 Homes to 40 - How to Finance Multiple Rental Properties - By Mike Kalis SeekingAlpha.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:17:15 GMT

From 4 Homes to 40 - How to Finance Multiple Rental Properties

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Don't Flyover the Flyover States - By Mike Kalis - Born2invest.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:17:10 GMT

Don't Flyover the Flyover States - By Mike Kalis

By Mike Kali

February 2018

Hans Christian Andersen couldn’t have predicted that his tales would have 21st-century real estate market relevancy. Yet, what could you call properties in flyover states but ugly ducklings — at least to investors seeking structural “swans” in Arizona and Georgia?

Of course, we all know how the folk story ends: The ugly duckling turns out to be like the cute, quiet girl in your algebra class you didn’t crush over in favor of the unobtainable homecoming queen. She’s now a stunner, and you’re smacking your head at your teenage shortsightedness.

It’s time to grow up and get past the trap of trendiness. Sure, it’s impressive-sounding to ask your friends to join you as you check out your Miami Beach properties, and it doesn’t sound as cool to say you scooped up deals in Missouri and Michigan. But your bank account won’t care.

This is no fable: In most U.S. markets — and virtually every “trendy” market — home values have reinflated to pre-crash levels . However, the cities and suburbs of middle America are where the yields are, even if they don’t have the name recognition among your buddies.

Keep your ear tuned to the market, not the glam

Metro Detroit on your radar? No? Then, you’re missing out.

Motor City is ripe for a comeback, and it’s going to make those with foresight very wealthy. In fact, foreign funding is pouring from overseas groups seeking yield.

If you’re like most Americans, your upper lip curls at the thought. “People are investing in metro Detroit? Seriously? It’s gone through such a downturn!” However, those foreign buyers are poised to make tons of money precisely because they aren’t hampered by preconceptions. They don’t care about the past — what they’re seeing are the raw figures.

Detroit is bouncing back, and housing prices haven’t caught up. Automotive employment numbers , for instance, are skyrocketing, and residential and commercial occupancy rates in the downtown area are plummeting. Housing will be in high demand for the foreseeable future, and it’s only a matter of time before prices inflate.

And guess what? Overseas real estate investors will reap the fiscal rewards.

Their prescience should be a lesson to every real estate investor. The only way to get serious is to head through this brief (but still open) window and invest in mid-continental properties. Eventually, that window is going to slam shut, and at that point, you’ll have wasted a golden opportunity.

When investing in real estate properties in middle America, aside from aesthetics, look for real estate investing fundamentals too. ( Source )

See past the outer trappings of the inner treasure

Much like many people’s perception of middle America, oysters don’t look too exciting on the outside, but the ones that hold pearls suddenly take on a new sheen. Use your head to find the gems by focusing on real estate investing fundamentals.

In addition to investigating localized knowledge of macroeconomic trends and neighborhood quirks through places like Zillow and Google Maps, be sure to check the following three boxes on the road to unearthing amazing mid-America deals:

1. Is the asking price below the replacement cost?

Any property that has a value lower than its replacement cost is fundamentally sound because it means the assessed land has intrinsic value. For instance, if a $90,000 house is sitting on top of a lot that would cost the same without any structures, you’ve found a golden nugget. Strike immediately before someone else snatches it from your grasp.

2. Does the property offer more than a 10 percent cap rate?

Assuming you plan to rent your house or office building, make sure that when you divide your annual possible income by the market value of the lot and structures the figure is at least 10 percent. Even if the area takes longer than you expect to grow, the property will provide you with plenty of income in the meantime.

3. Is your asking rent double your debt load?

Let’s say you have a $400 mortgage payment on a property in Kansas and you can collect $800 in rent. From a real estate standpoint, that’s technically attractive because even if the home takes one month to fill, you can still break even the next month. And if you’ve chosen a location wisely, it won’t sit that long without tenants, anyway.

It might feel cool to brag about condos by the surf or bungalows on the west coast, but your goal isn’t to make your friends drool; it’s to build your portfolio wisely. Right now, middle America is your ticket to cashing in on great real estate investments before everyone else catches on.

How to Get the Best Offer on Your Home Trade-In WRITTEN BY MIKE KALIS RealtyTimes

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:17:07 GMT

How to Get the Best Offer on Your Home Trade - IN - By Mike Kalis

By Mike Kalis

How to Get the Best Offer on Your Home Trade-In - Realty Times

February 2018

No matter who you are or where you live, selling a house can be a huge pain. Besides usually paying a hefty 6 percent commission in the process, there are constant open-house showings that require you to clean up, deal with the kids and the dog, and make sure the goldfish is on lockdown.

Even in a white-hot market, average sales times are about three months . That means some homes sit for as long as six months. If the market is moving more slowly, the process only gets dragged out longer.

A big problem in the home-selling process is that so many realtors are inexperienced. They start by telling you they can get more for your home than it’s worth. Then, only after you enter into an exclusive listing arrangement that lasts six months, they will back off and say the price needs to be lowered to drum up interest. Ultimately, the woes in the current real estate climate are primarily the result of misaligned interests. Realtors might be using your listing as a marketing tool to acquire new leads instead of truly working toward selling your home.

Fortunately, trade-in programs have emerged to solve many of the headaches associated with the home-selling process.

From a Need to an Advantage

We started our trade-in program at Marketplace Homes back in 2003 because we believed there was a huge niche — especially in the new construction industry. This belief came from my experience working for a builder when I saw plenty of homeowners have a catch-22 experience.

They’d need to sell their home to remove some of the financial strain of building a new one, but the construction process took months to a year to complete. Once their home was sold, they would have 30 days to move out, leaving them without a place to stay. Other clients started construction only to have their current home sit on the market for ages, forcing them to double down on payments.

Through these scenarios, the trade-in program model has a big advantage over traditional home sales. We make homeowners an offer first, and if they accept, the home is sold and closes back to back on the same day as the new home, relieving the stress of unpredictable timing conflicts.

Get the Most Out of Trade-In Programs

Aside from Marketplace Homes, there are at least three other viable trade-in programs already in the market. We’re all going to say why we’re great, but at the end of the day, it’s about the check in your pocket. Money is a commodity, and if one offer stands above the rest, it makes sense to take it. With that in mind, here are four ways you can get the most money out of whatever trade-in program you choose:

Know your qualifiers. To avoid wasting time and adding frustration to the home-selling process, make sure you understand how your home must qualify for your desired trade-in program. For starters, you might need to secure a mortgage on a new home, and because a trade-in program isn’t a mortgage company, seeking out and being approved by a lender is a must. Your home also has to qualify for the specific program. At Marketplace Homes, for example, we’re looking for homes between $70,000 and $500,000. If you’re outside this range, we’re not interested in buying. Finally, there needs to be a neighborhood at the right price point and in the right area that works for you in order for the program to work.

Take photos seriously. Think about it: No one has ever bought a home without looking at it. It's important to submit interior shots, but don’t walk around your dim, dirty home and take blurry cell phone photos. This seems like a no-brainer, but you'd be amazed by what homeowners send our way. Remember, there are actual people valuing your home based on the material you send them. In fact, The Wall Street Journal reports that buyers allocate 60 percent of their time for examining photos , compared to 20 percent for the listing description and 20 percent for the agent description. Your sink full of dishes could literally cost you thousands of dollars. Clean up, open some windows, turn on the lights, and take high-quality pictures. It’s well worth the effort.

Utilize automated valuation metrics. All trade-in programs calculate your home’s value — at least in part — with automated valuation metrics. To stay up-to-date, go on Zillow and make sure the information logged there is correct, such as square footage and extra features, including hardwood floors, remodels, garage space, bedrooms, and bathrooms. Zillow feeds information to many other AVMs, so a mistake can undercut your valuation before the process even begins. Again, this is an easy step to complete but can quickly turn into a money suck if not taken seriously. So don't delay. Keep track of your home's assets, and don't hesitate to let them be known.

Ask for more. Most trade-in systems don’t come with a lot of wiggle room, so asking for an extra $5,000 will likely get shut down. On the other hand, $1,000 might get accepted if it's a great home because nobody can tag a price on a property down to the dollar. While talking with your trade-in program rep, flex those negotiation muscles to bump up the selling price. As long as your counter offer is within a couple of percentage points, you might not be rocking the boat too much, and you could be singlehandedly beefing up your wallet. The worst-case scenario is that they'll just say no.

Trade-in programs represent a new way to sell a home, and without a doubt, they have great potential. The current real estate climate is ripe for change, and buyers and sellers are eager to see what non-traditional options are available. When it comes time for you to move, be sure to check out the possibilities offered by various trade-in programs. Taking the plunge to ask more questions, being vigilant in taking high-quality photos, making sure your AVMs are accurate, among other steps, could save you tons of hassle and help get you into the home of your dreams sooner than later.

3 Times Sold Doesn't Mean Sold - By Mike Kalis Realty Times

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:16:57 GMT

3 Times Sold Doesn't Mean Sold

The 3 Times ‘Sold’ Might Not Mean ‘Sold’

WRITTEN BY MIKE KALIS

POSTED ON

WEDNESDAY, 02 DECEMBER 2015 11:26

The 3 Times ‘Sold’ Might Not Mean ‘Sold’ - Realty Times

No one has ever said that selling a house is a simple and straightforward process. In an ideal world, you’d stake a “for sale” sign in your front lawn, droves of people would flock to your home, and someone would hand you a check for an amount that’s over your asking price. Then, you’d drive to the bank, deposit your cash, and get on with your life.

Sadly, that’s not even close to the case. Things can get really, really complicated.

Take my client Bethany, for example. She put her house on the market, held an open house, and received a great offer the very next day. We called her up and said, “Hey, congratulations! Your home sold! Someone offered you full asking price.”

Bethany happily accepted the offer and thought the deed was done. But then, she was confronted by a harsh reality: In real estate, “sold” doesn’t always mean “sold.”

In fact, she learned this three times.

1. The Offer Was Contingent on Inspection

All smart homebuyers will make an offer that’s contingent on an inspection. This means an inspector will go into the house, explore every nook and cranny, discover every flaw, and write up a report that’s as thick as a phone book. Peeling paint, rotten soffits, termite damage, plumbing leaks, you name it. No house is immune to their watchful gazes, and there’s no such thing as a house getting a clean bill of health.

Bethany had no idea her house had any issues, but her lengthy inspection report ended up being a deal breaker. The buyers were convinced that a strong gust of wind could blow the house over, and the prospect of tens of thousands of dollars in repair costs sent them running for the hills.

2. The Mortgage Fell Through

After receiving her shocking inspection report, Bethany spent a good amount of money fixing up the house and getting it into sellable shape. She put the “for sale” sign back up, and her house soon attracted another great offer. We called her up again with the good news, telling her the house sold for full asking price.

Bethany figured she was home free after making so many repairs, but her optimism quickly turned to dread when we called her up again with some bad news: Even though the buyer had been preapproved for a mortgage, it fell through. She was beside herself and began demanding answers.

We explained to her that mortgages can fall through for any number of reasons. The buyer could have lost his job, the bank could have stopped offering the program the buyer was in, or the interest rates could have spiked. Whatever the reason, the buyer had to back out and get his finances back in order — which, again, sent Bethany back to square one.

3. It Sold in Escrow

At this point, we knew Bethany’s frustrations levels were through the roof. She had grown completely distrustful of the selling process, and she sounded much less optimistic when we told her about the next great offer on her house. This time, the deal made it all the way to the table, and the close date was set for a Friday.

As the day crept closer, we got a call from the bank saying that the buyer’s funding wouldn’t be available until the following Monday, and the house would have to close in escrow. We knew this would not be a big deal at all, but we also knew this news wouldn’t exactly be music to Bethany’s ears. We had to explain to her what the concept of “escrow” was, and we reassured her approximately 1,000 times that the deal would be unaffected by this development.

The third “sold” was the charm: The deal was officially sealed on that Monday.

What We Can Learn From Bethany

Whether you are selling or buying, always ask questions — especially if you don’t understand a real estate term or contract legalese. Take an active role in familiarizing yourself with the world of contingencies, inspection reports, and mortgages. Always read the fine print, and sign only documents you fully understand.

Real estate can be a confusing emotional rollercoaster, but it’s definitely possible to prevent yourself from being blindsided by the various deal breakers and unexpected surprises that can arise. Your house will sell; it just might take three tries.

Idea Mesh - Ask Why One More Time Than Everyone Else - By Mario Schulzke in Idea Mesh Online

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:16:54 GMT

Ask Why One More Time Than Everyone Else

Mike Kalis - CEO of Marketplace Homes (ideamensch.com)

Ask, “Why?” I think it annoys everyone to no end, but if something doesn’t make sense to me in a meeting, I can’t stop myself from asking why until we uncover a solution that makes sense.

Mike Kalis is the CEO of Marketplace Homes. He and Marketplace Homes have been featured in more than 50 different media outlets, including Fox Business, The Detroit News, Chicago’s Daily Herald, and Builder magazine.

Mike is a sought-out speaker among home builders, and he has been recognized by Crain’s Detroit Business as one of the top 20 in their 20s.

Under Mike’s leadership, Marketplace Homes has been named Real Estate Company of the Year by the American Business Awards, one of Michigan Governor Rick Snyder’s 50 Companies to Watch, and Inc.’s 189th fastest-growing company in the U.S.

Where did the idea for Marketplace Homes come from?

In 2007, the market was completely upside down, and people couldn’t get out of their old homes. We discovered that if you can provide a great solution for someone’s old property, he’s more likely to build a new home with you.

At one of the most difficult times for new builders, Marketplace Homes was born as a place for people to get a great solution for their old home and purchase a new construction home.

What does your typical day look like, and how do you make it productive?

I usually wake up at about 6 a.m. and help with my sons (a newborn and a 2-year-old). Then, I get in the car and make the 35-minute drive to work.

Amber schedules nearly my entire day. I operate nearly entirely from that schedule and just sort of go from meeting to meeting. Those usually end around 5 p.m. Then, I’ll spend a couple hours answering emails and hopefully be able to leave around 7 p.m. so I can get home at 8 p.m. to say goodnight to my sons.

How do you bring ideas to life?

I don’t think it’s necessarily me who brings ideas to life. We have a team of creative people who come up with really awesome ideas. We bring in incredible people who are really smart and can run with ideas. They can take the vision and the outline and execute from that.

What’s one trend that really excites you?

We’re at a crossroads of technology and people. It’s exciting to me that we can use technology to enable people to be incredibly successful.

In real estate, in particular, we can use video and mobile technologies to allow people to get into a home anywhere in the U.S. It routes a call from someone’s phone back to our office, allowing our staff to give incredible tours and get people really excited about the home.

When you take technology and blend it with people, you can get incredible results.

What is one habit of yours that makes you more productive as an entrepreneur?

I could give you 10 that aren’t making me more productive. For me, the hardest thing is finding time to think. I go through my days with a billion meetings. I’m usually exhausted by the end of the day, so taking time to reflect is vital.

What was the worst job you ever had, and what did you learn from it?

I worked at The Rock Shoppe in Plymouth, Mich., where I loaded rocks onto the backs of trucks for a summer. I did that for 60 hours a week, Monday through Saturday night. I made $10 an hour, so that was pretty good. I made about $15,000 one summer doing that, then I put it all in WorldCom and lost it in 60 days when there was fraud within the company.

If you were to start again, what would you do differently?

I would find people who have the same interests. One of the biggest bumps we hit was when we realized we had a lot of people who weren’t passionate about building what we were trying to build.

As we grew quickly, we just took people and put them in positions. But maybe they weren’t excited about real estate. Maybe they didn’t like technology. Maybe they were on our property team, but they didn’t like doing service calls.

I would go back and really make sure the people we brought on board actually loved what we do.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

Ask, “Why?” I think it annoys everyone to no end, but if something doesn’t make sense to me in a meeting, I can’t stop myself from asking why until we uncover a solution that makes sense.

What is one strategy that has helped you grow your business?

What really helped us take off is simple: We just threw it all out there.

We poured every dollar we made back into the company. We hired more people. We put money into marketing. We had a mission to grow and be the largest broker of new construction homes.

We’re not concerned with profits; we’re concerned with growth. I think that’s what has allowed us to get to the size and the platform we claim now.

What is one failure you had as an entrepreneur, and how did you overcome it?

The first version of Zip Tours, which we called ITours, was this idea that we were going to take cameras and put them into the builder’s model. This was going to allow us to show those models remotely. It was basically the first iteration of what we’re doing now.

We put about $70,000 into outside technology. We had people on our team dedicated to growing this. We got a builder to agree to do it, so we installed a bunch of stuff in the mount. Then, it flat-out didn’t work.

The technology was supposed to trip an automated lock. Everything was in place, and that stupid lock just wouldn’t unlock. Then, it started to go downhill because it didn’t get fixed quickly enough.

As a result, instead of providing this infrastructure, we decided to leverage people’s mobile devices. We came back with a new service that’s our current version of Zip Tours, which is a simple app that uses smartphone cameras.

What is one business idea that you’re willing to give away to our readers?

Something everyone can do is get into the rental game. For people who are looking for passive income, buying a home — that’s less than $100,000 with a 4 percent locked-in interest rate — and renting it out is a smart move. Then, they can put that money into an IRA or 401(k), allowing it to grow.

Many people are getting a 10 percent bond on their return. Then, if they put 10 percent down on the property and home values went up 7 percent within three years, they would double their money. I don’t think there’s a better passive investment than that.

As far as new ideas are concerned, education needs to be radically revamped. The costs and the rewards are out of control. I propose a four-year internship-based business degree called Marketplace University that requires students to travel the world. Every three months, each student would work as an intern at a different company in a different area while taking online classes. The company would pay the student’s tuition and get free labor. The students, on the other hand, would come out with 16 experiences with different companies and countries by age 22, allowing them to better know the world, business, what they like, and what they don’t. Most importantly, they would have no debt.

What is the best $100 you recently spent?

It was $69, five times over. We did a promotion for our sales team in which we bought a lobster for the five salespeople who hit a particular sales number. This is probably the best reaction we’ve ever gotten from a gift. There were even Facebook posts of everyone’s kids playing with the live lobsters.

What software and web services do you use? What do you love about them?

We use Salesforce as a back-end CRM. Most people are familiar with it, making it a great tool that’s easy to introduce to new team members.

What book do you recommend our community should read?

“Linchpin” by Seth Godin is one of my favorite business books. It talks about people becoming artists. I really believe that if you just do what everyone asks you to do from 9 a.m. to 5 p.m., you’re replaceable. At one point, this type of employee was valuable, but now, new ideas and their execution are more important.

What people have influenced your thinking and might be of interest to others?

Justine Musk is the ex-wife of Elon Musk. Her blog, posts about the personal life of someone who desires to be successful (and what it takes to be successful) are extremely interesting. She doesn’t write with a condescending tone toward her ex-husband. It’s more like an admiration of someone who’s willing to dedicate his entire life to trying to change something.

A. Alfred Taubman wrote a book called “Threshold Resistance,” which I just read. It discusses how you get people across the threshold and how to get them to do that easily. In his world, that meant getting people into a store. In real estate, we’re trying to discover how to make it simpler for someone to get into a home.

Taubman found that if you get someone into the store, she’ll likely buy something. If you don’t get her into the store, she will not — guaranteed. Basically, Taubman offers lessons on how to make your business inviting and convenient in order to close sales (or, in my case, get more people to see homes).

Why Entrepreneurs Thrive in Underserved Markets - By Mike Kalis - www.startups.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:16:46 GMT

Why Entrepreneurs Thrive in Underserved Markets - By Mike Kalis

By Mike Kalis

Why Entrepreneurs Thrive in Underserved Markets | Startups.com

February 13, 2017

To maximize your chance of success, launch your business in a depressed industry, pick a less-desirable or underserved geographic location and be the only solution to an ongoing problem. Why? Because when it comes to entrepreneurial genius, context is key.

You face an uphill battle if you set up shop in Silicon Valley, surrounding yourself with hundreds of other geniuses who are all drinking from the same punch bowl of funding and talent. However, if you apply your genius and work ethic to an underserved market that has far fewer geniuses, you instantly look exponentially better.

I have no more claim to the title “genius” than employees at an Apple store, but I have taken advantage of the benefits of context.

The Trifecta of Unhappiness:
Detroit circa 2007

In 2007, I launched a real estate company in Detroit during a trifecta of unhappiness: The housing market had recently crashed, the city was about to go bankrupt, and real estate has always been wrought with consumer complaints .

Because of this touch-and-go climate, we were able to thrive.

Our early success was based on our ability to service what was then a very underserved market opportunity and solve a problem no one else was interested in solving.

Then, once we were ready to expand beyond the Motor City, we targeted places with equally dire housing markets — intentionally avoiding the seductive sea breezes of Malibu and the rarefied air of Manhattan real estate.

In underserved markets, we get the best of everything. We hire the best talent, find the best investors, and work with terrific clients who genuinely appreciate what we do.

Find your chance to shine.

When searching for entrepreneurial opportunity, these three signs will indicate an industry is already happy and doesn’t need you:

1. It’s the talk of the town.

Your mother and school counselor were right: Resist peer pressure. It might seem like a good idea to join the popular kids in the popular industries, but just say “no.” If you shop your idea to a friend, and he has three other friends and an Aunt Ida who are all working in the same arena, forget about it.

The industries experiencing the most growth — either in revenue or employment — have already figured it out, and countless companies are currently reaping the benefits of being in these fields. The most talented prospects are gainfully employed, and the most interested investors have been claimed.

In an established or surging market, you should be thinking more along the lines of “ investment opportunity ” — not “launch date.” Perhaps you could own a stake in Aunt Ida’s startup.

2. There are giants about.

Sometimes, Cinderella gets to go to the ball, the Cubs win the World Series and David slays Goliath. In fact, some of the world’s most successful companies were David’s. Amazon challenged Barnes & Noble, Google took on Yahoo, and Apple called out Microsoft.

However, there’s a reason these scenarios are so memorable: They’re extremely rare.

Choose your battles wisely. If you think leaders of a billion-dollar company are going to let you waltz into their market and steal a piece of their pie, you’re setting yourself up for disappointment. Giants are not overly fond of competition. In fact, they’re known for stunting innovation altogether in certain industries. You’re better off surrounding yourself with dwarfs and blazing your own trail to success.

3. There is a plague of happiness.

Customer satisfaction is like inertia. When people are happy with a brand or product, it’s awfully difficult to persuade them to try something new. In fact, when consumers do decide to change brands, only 14 percent of the time is it because they’re unhappy with the product itself. More often than not, it’s because they’re receiving poor customer service.

If the industry you’re looking to revolutionize is already ablaze with positive product write-ups and cheerful customer reviews, turn your attention elsewhere. Offering a slightly better product to consumers who are already satisfied with the current market darling won’t get you anywhere.

Don’t aim to make happy people even happier; be on the lookout for industries that are trending for negative reasons.

Companies like Amazon and Google are inspiring, but following in their footsteps is risky business.

Don’t run toward shiny, happy industries; run toward a disaster zone, and be the genius who dug in and solved an ongoing problem no one else was willing to touch. Sometimes these underserved markets can actually be the best markets for entrepreneurs to thrive!

How to Reap Big Benefits from Build to Rent Investments - By Mike Kalis - www.biggerpockets.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:16:42 GMT

How to Reap Big Benefits from Build to Rent Investments - By; Mike Kalis - Biggerpockets.com

By Mike Kalis

Biggerpockets

How to Reap Big Benefits From Build-to-Rent Investments (biggerpockets.com)

Once upon a time, foreclosures were considered one of the hottest real estate investments you could make. However, over the past several years, inventory has been steadily falling, leading residential realty investors to search for better, more sustainable ways to spend their cash and earn favorable returns.

If you’re an investor anxiously watching the foreclosure market dwindle before your eyes, here’s a market trend that should inform your plans: As owner-occupied housing has steadily declined, rentals have increased to 37 percent of American households.

Buy-to-sell was once all the rage, but now the door’s swinging wide open for the build-to-rent asset class.

Crumbling vs. Current

Foreclosures are often accompanied by a long list of problems. For example, vacant houses often have maintenance issues, rest on grounds that need attention, and belong to neighborhoods on the decline.Run the numbers, and the shortcomings and costs can easily cancel out the returns.

On the other hand, building to rent with a large-scale builder is a way for serious investors to broaden their portfolios and reap serious profits. Large homebuilders target locations suited for future growth, and new homes appreciate at a better rate than existing home stock. Further, large homebuilders often build for less than $70 per square foot — you won’t find any small builder that can match this low number.

Partnering with a large-scale builder also allows you to buy in bulk with a lower initial investment — and realize much better returns. Forget foreclosures, and reap these four big benefits from investing with big builders:

1. Margins. Step one is just doing the math. Profit margins of publicly traded builders — like D. R. Horton, Ryland, and Lennar — can skyrocket into the 20 to 25 percent range. This doesn’t mean you will automatically see similar margins, but given the right situation, builders like these give you the best shot at getting a great deal.

Investors have an easier go at getting financing on the property because it will comp and appraise at a higher value than the building costs. Then, they can turn the home into a rental property and take advantage of the rising rental market. The house pays for itself without the cost of rehabbing or dealing with countless maintenance issues as the builder typically offers good warranties.

2. Financing. In the right situation, big builders will actually finance your build. D.R. Horton, for example, will finance a $400,000 house for as little as $500 upfront — it’s amazing, really. Smaller builders typically require somewhere around 20 percent down or, tougher, all cash upfront.

Because operating on a larger scale drives down their other costs, large builders are afforded certain advantages — such as greater access to credit. And some are beginning to sweeten the deal even more by offering institutional buyers bulk discounts.

3. Diversity. Large builders are already working in multiple established neighborhoods, so they’re essentially a one-stop shop for investors looking to build large, diverse portfolios. Homes can be spread across communities and even different states with the same builder.

4. Know-How. Large builders know what they’re doing. They close on time, their houses are well-built, and their warranties make sense. A small builder won’t have the scale of production to really drive the costs and speed to where they need to be.

Small builders just leave open too many variables. You never know if they’ll close on time, they often run into problems, and they commonly incur cost overruns. Big builders absorb their own cost overrunsand say, “Hey, that’s on us.” Small builders pass those costs along to the investor.

With shrinking foreclosure inventory and growing rental housing rates, the build-to-rent asset class provides a nice shot in the arm to realty investment opportunities. And by partnering with large production builders, investors reap the reward of lower down payments, better margins, volume-based discounts, portfolio diversity, and so much more.

Why continue riding the foreclosure train when you know it’s been slowly coming to its last stop for years? The advantages are obvious: Start anew by becoming a build-to-rent investor.

From Ozzy to Awesome - A Modern Landlords Guide to Vetting Tenants - By Mike Kalis - www.biggerpockets.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:16:39 GMT

From Ozzy to Awesome - A Modern Landlords Guide to Vetting Tenants - By Mike Kalis - www.biggerpockets.com

From Ozzy to Awesome: A Modern Landlord’s Guide to Vetting Tenants

Mike Kalis

From Ozzy to Awesome: A Modern Landlord’s Guide to Vetting Tenants (biggerpockets.com)

How to Reap Big Benefits From Build-to-Rent Investments

You can’t look at two pieces of a puzzle and accurately predict the entire picture.

For that same reason, landlords need to dive deeper than the “two C’s” — credit and cash — when screening potential tenants. Using those factors alone, it’s hard to know whether you’re on the verge of renting to Ozzy Osbourne or Donny Osmond .

In his heyday, Ozzy Osbourne was making tons of money and likely had a healthy line of credit — but he was also known for being a total party animal who engaged in bizarre and destructive behavior . Donny Osmond, on the other hand, was wealthy and had a squeaky-clean lifestyle.

Unfortunately, back in the 1970s, landlords had a tough time telling the difference between the Ozzys and the Donnys. As a result, they ended up renting their properties to a lot of crazy trains . What a nightmare !

Today’s landlords, however, are operating in an era of data-driven decision-making. It has never been easier to dig deeper than the “two C’s” and unearth hidden gems of evidence that illuminate whether a person will be a great tenant.

Here are three vetting techniques every landlord should use in 2017:

1. Follow the Digital Footprint

Begin your investigation into tenants with a wide net: the internet.

The web never forgets. Every photo, tweet, and comment made in a public forum is still viewable. You may also find articles — both positive and negative — about candidates that shed light on their professional accomplishments and personal habits.

One big caveat, though: You need to be extra sure these pictures, articles, and reviews pertain to the same “Steven Tyler” who’s applying to live on your property. Look for hints — such as the location of a restaurant he’s reviewed — to confirm whether this is the person you’re looking for.

Further, if you find Steven Tyler’s Yelp account and see that every review says something along the lines of “Your establishment is the opposite of amazing . You deserve ZERO STARS!” — he’s a tenant to avoid. Someone who gleefully shreds every business he interacts with will not be fun to work with. If Mr. Tyler can’t handle his soup needing more salt, he likely won’t take minor home repairs in stride.

Finally, don’t be afraid to stalk prospective tenants’ social media accounts for clues about what they’re really like. For instance, if Steven Tyler is holding a lit cigarette in multiple Facebook photos, he was clearly lying when he checked the “non-smoker” box on his application. If he devoted an entire photo album to showcasing his gigantic surround sound home theater setup, prepare yourself for noise complaints if you rent to him.

2. Grill Their Exes (Landlords, Not Lovers)

Talking to a candidate’s previous landlords should be a no-brainer, but privacy concerns often make it difficult to gain the useful insights you’re after.

That’s why you shouldn’t take other landlords’ words at face value. Read between the lines, and listen to how they talk about their former tenants. You don’t have to be a trained psychologist to know whether someone is genuinely sad to see a tenant leave.

If the landlord only gives vague one-word answers, you can probably conclude that Steven Tyler wasn’t a dream tenant. On the contrary, if the landlord sounds very familiar with Mr. Tyler, it could be because he was an annoying tenant who was always causing issues, crying , or going crazy . Proceed with caution, and search for context clues.

To guide conversations with past landlords, try asking questions like:

“Were you sorry to see him or her go?”
“Tell me about how the lease ended. (Did it end in eviction?)”
“Were there any complaints, or was there any damage?”

3. Think Deeply About Professions

In many American cities and counties, landlords are legally allowed to turn down candidates based on their primary source of income . This is a superpower I urge you to use often.

Some professionals generally make great tenants. Some do not. Let’s start by looking at the obvious ones.

Carpenters, plumbers, and electricians are the types of people who will unclog their own toilets and fix their own appliances — and might send you a receipt for The Home Depot afterward. Everyone wins in this arrangement; the tenant knows the job was done up to his or her standards, and you received at-cost maintenance work.

Accountants and engineers tend to be tidy and neat because their careers depend on their ability to arrange and organize infinite numbers into rows and columns. Sure, they will keep to themselves and probably won’t send you a fruit basket during the holidays, but you’re looking for a tenant, not a best friend.

Obviously, you want to avoid someone who looks like a professional troublemaker. But what about some under-the-radar professions to avoid?

Salespeople (or other commission-based professionals) can have volatile incomes that result in unhealthy spending habits — and this can impair their ability to pay rent on time.

Lawyers are highly educated and make plenty of money, but you can be sure they’ll put their expertise to work and argue every clause of the lease. Further, they litigate at will. It doesn’t cost them a cent to sue you.

Speaking of legal action, there’s no guarantee you’ll be able to collect overdue rent payments if you sue a self-employed tenant. Their assets are tied up in their business — and if the business implodes, so does your ability to win a judgment against them.

The “two C’s” are still necessary, but these days, they’re not nearly enough.

Dig deeper, make the internet your ally, and put together the entire puzzle when vetting prospective tenants. Today, it’s easy to be a rock-star landlord who avoids destructive tenants and protects investments.

Save 15% on New Construction Homes with No Negotiating- By Mike Kalis - www.biggerpockets.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:16:36 GMT

Save 15% on New Construction Homes With No Negotiating - By Mike Kalis - www.biggerpockets.com

By Mike Kalis

Bigger Pockets

How to Save 15% on New Homes with No Negotiating (biggerpockets.com)

Building a home from scratch is an incredibly exciting undertaking. When you’re handed a blank canvas and a large catalogue of options and add-ons, you may feel tempted to splurge on every possible upgrade.

If you’re planning on living there, by all means, go ahead and build your dream home. Install every fancy feature your heart desires and wallet allows. But if this is going to be an investment property you plan to rent out for the next few years, pump the brakes, and consider this:

Renters don’t care if your property belongs on the cover of Martha Stewart Living; they just want clean and reasonably priced homes. Any brand-new home with basic amenities and appliances is probably better than what they’re currently renting.

Further, did you know builders mark up most options 100 percent, and many refuse to negotiate on these prices? Why should you pay top dollar for things that will hardly affect your bottom line?

You’re better off throwing out that catalogue of high-priced upgrades and embracing option-free building — a strategy that can easily chop at least 15 percent off the cost of your brand-new home.

Which specific types of options should you avoid? Here are three:

1. Architectural flourishes

Builders will undoubtedly offer you several types of exterior cosmetic upgrades. For example, you could pay $20,000 to have a few extra peaks added to your roof, $5,000 for cool dimensional shingles, and another $10,000 for brick on all four sides of the home instead of just the front.

These expensive upgrades will surely boost the home’s curb appeal, but if you think they’ll boost your ROI, think again. You will be hard-pressed to find a renter who’s eager to pay more for fancy shingles and extra bricks. To echo the theme of many after-school specials: It’s what’s on the inside that counts.

2. Interior luxuries

Everyone needs a toilet, but not everyone needs an elongated toilet made of gold. The difference between a necessary item and a luxury item can make or break your profit.

When weighing your options, never lose sight of a renter’s perspective. In all likelihood, she is currently using appliances that have 25 families’ worth of grime on them. Maybe her current rental doesn’t have a dishwasher at all, so the fact that yours has an $8,000 whisper-quiet dishwasher is irrelevant. Investing in basic appliances will be plenty sufficient.

Furthermore, when it comes to flooring, don’t fool yourself into thinking tenants will care whether you’ve splurged on top-of-the-line hardwood or extra-thick carpet padding. The existence of any hardwood or carpeting is enough; renters aren’t caught up in the density of carpet pads — and they certainly won’t write you larger checks because your pads are 8 pounds instead of 4 pounds.

3. Luscious landscaping

If you’re building your personal dream home, feel free to purchase a plot of land on the edge of the woods, build some gorgeous flower beds, and install a tranquil koi pond.I’m sure you’ll cherish the view from the back deck, happily trim and water the flowers, and regularly feed the fish for decades. But do you think a tenant will take immaculate care of the fish and flowers, let alone pay extra for the privilege of doing so? Here’s a more realistic scenario: You’re going to pay a $20,000 lot premium for the cool view and $10,000 for your fancy foliage, and then you'll find yourself regularly buying new fish and plants because your tenants aren’t willing to take care of the current ones.

You don’t need to surround the house with gravel and eliminate all signs of verdant life, but you should keep the landscaping simple. Plant low-maintenance bushes and shrubs that are easy on the eyes but tolerant to long periods of neglect.

Cosmetic upgrades and premium appliances will add tons of money to the cost of your investment home — but hardly any money to your bank account down the road.

Always keep in mind that renters are looking for clean, well-maintained properties that offer all the essentials. They don’t care about golden appliances, water features, and carpeting that pampers their feet.

By avoiding the tempting trap of building a dream home, you also dodge a potential profit nightmare.

Virtual Stagging - How to Make a Modest Property Look Marvelous - By Mike Kalis - RealtyTimes.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:16:30 GMT

Virtual Stagging - How to Make a Modest Property Look Marvelous - By Mike Kalis RealtyTimes.com

By Mike Kalis

Realty Times

Virtual Staging: How to Make a Modest Property Look Marvelous - Realty Times

Today’s renters rifle through online listings as if they’re dating apps; they scroll and swipe at warp speed, searching for photos that catch their eye. If the first image they see looks blurry, bland, or bleak, they swiftly move on to a different listing without a second thought.

That’s why people looking for long-term love on dating sites don’t post unflattering photos. They put on their nicest outfits, choose slimming angles, and try to minimize the presence of blemishes and wrinkles. They show potential suitors what they look like on their best day — not what they look like right after rolling out of bed.

It’s crucial for landlords and investors to take a similar approach when marketing their rental properties in the digital era. Photos shouldn’t just show a clean home; they should show what a property will look like if a tenant maximizes its potential. They should make your home look sexy!

Don’t show an empty, echo-filled house with bare walls and floors. Stage it with stylish furniture, rugs, curtains, and artwork. Even if it’s been sitting empty for years, make it look like a family with impeccable taste is currently living there.

Unstaged homes spend 73 percent more time on the market than staged homes, and people tend to pay more for staged properties. However, you’re probably thinking that staging sounds awfully expensive. Well, it can be. Even if you buy cheap or secondhand furniture, you’re still looking at spending $10,000 to $20,000 to doll up a multibedroom property. If you’re listing several homes, the financial burden can really add up.

Luckily, modern technology makes it incredibly easy and inexpensive to virtually stage a home. All you need is an eye for style and some Photoshop skills. If you don’t have either of those things, there are plenty of property management companies out there — mine included — that do it for free as part of their marketing services. Make sure to ask whether a company provides this crucial offering.

Virtual staging isn’t meant to mislead consumers; it’s meant to inspire them. The point is to show how each room could be utilized by your tenants.

If you opt to take the DIY approach, here are four tips to keep in mind:

1. Tasteful beats tacky. Stick to a consistent, cohesive, and universally appealing aesthetic. Very few people will appreciate hot pink couches, lime green rugs, or curtains drenched in rainbow polka dots. Most people will see this wacky decor as an excuse to scroll on to the next option.
At the other end of the spectrum, decking the halls with boring beige colors will also give people a good reason to navigate away from your listing. Some nice, inoffensive blues and grays should do the trick. Just be sure to tie everything together with colors and patterns that match, and don’t forget to incorporate them into smaller details like drapes, throw rugs, and accent pieces.
2. Evoke emotions. If you show online consumers an empty home, all they’ll feel is emptiness. Without standing inside it and taking measurements, they have no idea how the space could be utilized by their family.
Your virtual staging should show them they can create memories that last a lifetime in this home. If a major selling point of your property is that it has a huge dining room, put an extra long table in your photos, and make sure it has several chairs around it. Send a clear message to tenants that this room can easily accommodate large dinner parties and family gatherings.
While you’re at it, put a bar, pool table, and projection screen in the basement to show how this space could become an epic man cave. Place a twin bed and a beanbag chair in the smallest bedroom to show what a great kid’s room it could be, and add elegant furnishings to the master suite to get the adults excited about their private space.
3. Elevate the exterior. Exterior staging is just as important as interior staging, and it’s easy to neglect this area. There are many things you can do to show potential renters how they could use the outdoor space to entertain their friends, play with their kids, or just lie around on a lazy Sunday afternoon.
You could add some rocking chairs to the front porch, put a swingset and fire pit in the backyard, or even string up a hammock between two trees. In addition to furniture and play structures, pay close attention to how the yard itself looks. If you snapped your photos during a heat wave and the lawn isn’t as green as it usually is, your virtual staging specialist could enhance its coloring and make it look healthy and vibrant.
4. Cover up the imperfections. Covering up imperfections is different than hiding major problems. If there’s a gigantic hole in a wall that you don’t plan on fixing, Photoshopping it out would be dishonest and misleading. However, there’s nothing wrong with placing a rug on top of scratched-up hardwood floors or putting an end table in front of a harmless (but unsightly) crack in a wall. In all likelihood, this is exactly what a tenant would do with his or her own belongings after moving in.

Staging a home helps people feel like they’re already living there, and in the digital era, it’s never been cheaper or easier to accomplish this key marketing tactic. Virtual staging gets the job done — it helps you drive traffic to your properties, fill them faster, and boost your bottom line.

Less Rent Can Get You More - By Mike Kalis www.biggerpockets.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:16:28 GMT

Less Rent Can Get You More - By Mike Kalis- www.biggerpockets.com

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How to Hire a Property Manager By Mike Kalis - www.biggerpockets.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:16:24 GMT

5 Questions to Ask a Property Manager

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Selling Your Property Management Company - By Mike Kalis - www.buildium.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:16:21 GMT

Selling Your Property Management Company - By Mike Kalis

By Mike Kalis

www.buildium.com

September 12, 2017

Selling Your Property Management Company 101 | Buildium

S elling your property management company is actually quite similar to selling a home. If your firm doesn’t have great bones and tremendous curb appeal, you’ll struggle to get top dollar for the business. Even worse, you could struggle to find a buyer at all.

Even if you feel the urge to retire immediately and make a beeline for the golf course, I suggest that you get out your metaphorical hedge trimmers today, and spend the next 1 to 3 years renovating the company you’ve worked so hard to build.

Taking the following 3 steps will make your property management firm more palatable to potential buyers—while boosting its value.

Selling Your Property Management Company

How to Improve Your Business’ Curb Appeal

#1: Clean (and Know) Your Books

Prospective buyers are going to want to see your financials, and they’re going to ask you tons of questions about them. When that day comes, “I don’t know” won’t be an acceptable answer.

Before selling your property management company, go through your profit and loss statement line by line with the help of your CPA until you can grasp every single detail. You don’t need to become a CPA yourself; but at the very least, you need to know what each line means and why it’s important.

Along the way, identify and write off your “bad debt.” I’ve seen companies that look profitable because they’re carrying five years of back rent. If you evicted a tenant in 1999 and he still hasn’t paid you $5,000 in delinquent rent, it’s time to quit considering that bill an asset. The same applies for vendors. You will want to understand how much money is still owed or collectable in each arrangement.

Another thing to understand before selling your property management company is the difference between accrual-basis and cash-basis accounting. Both methods offer a snapshot of the financial health of your company; but if the snapshots look glaringly different, know how to explain why this is the case.

Finally, before selling your property management company, you’ll want to break out your personal expenses from the company’s overall expenses. This includes your cell phone, your car, and any other items that you’ll keep in your possession after the sale. By doing so, you can show potential buyers that those expenses are really just profits waiting to go into their pocket once you’re out of the picture.

#2: Upgrade Your Processes and Structure

Make your firm move-in ready by embracing modern technology. If you’re still accepting cash payments from tenants, for example, it’s time to invest in an electronic payment system. Similarly, an out-of-date eviction process and service request system are also red flags for potential buyers.

If your office is peppered with big filing cabinets full of paper records, you’re selling the business equivalent of wall-to-wall shag carpet and wood paneling. The idea of needing to digitize everything immediately after purchasing your firm will send buyers running for the hills.

Lastly—and this is a big one—if you’re a one-person operation, I suggest that you build a small team before selling your property management company . Think of it this way: if you are personally doing all of the business development, marketing, bookkeeping, and evicting, you are the business. If you leave, there’s nothing left.

Contrast that with a firm that has a team in charge of those areas. These folks will stick around and keep the company afloat while the transition occurs—and that’s a lot more valuable to potential buyers.

#3: Prepare Your People

Make sure that your staff is both aware of and excited about the fact that you’re selling your property management company. If potential buyers visit your office and everyone looks depressed and resentful, they’re not going to want to join the pity party.

People are naturally resistant to change, but you’ll ideally be selling your property management company to an entity with greater capabilities than your own. When communicating the situation to your team members, tell them this. Explain how they’ll gain even better resources and job security once new leadership takes over. We’ve seen employees express over-the-moon happiness at the prospect of gaining access to new tools and software—things that make their jobs easier, allow them to perform better, and give them new skills to add to their résumés.

Explain to your employees that the new owner is interested in growing—not dismantling—the company. If you describe the long-term perks that they’ll reap from selling your property management company, they’ll welcome it with open arms.

None of the above steps will be easy, but neither is property management. If you’re considering selling your property management company , do some extra legwork today to clean up your books, processes, and company structure. This will provide you with peace of mind—which could do wonders for your golf swing—along with a top-dollar valuation.

Next, be sure to re

How to recover from a flood when you don't have insurance - By Mike Kalis - medium.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:16:18 GMT

How to recover from a flood when you don't have insurance - By Mike Kalis www.medium.com

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A 3-Step Guide to Making Smart Cross-Country Investments - By Mike Kalis on www.biggerpockets.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:16:15 GMT

3-Step Guide to Making Smart Cross Country Investments - www.biggerpockets.com - Mike Kalis

By Mike Kalis

A 3-Step Guide to Making Smart Cross-Country Investments (biggerpockets.com)

2018

There’s an old adage in the investment world: If you can’t see it or touch it and it’s more than 20 miles from your house, don’t invest in it. For decades, this was logical advice. After all, at the time, investing in real estate where you managed properties from afar could quickly turn into an absolute nightmare.

But thanks to modern-day technology and clever companies — like Roofstock , which links investors to occupied properties and national property management firms like mine — cross-country investing is not only feasible, but can also offer the potential for the best ROI. With an arsenal of tools like Google Maps, Zillow, and Yelp readily available to help locate, research, and restore properties around the globe, why should you settle for 2 percent returns in your area when you can yield 12 percent returns elsewhere?

Making Smart Choices on Cross-Country Investments

There’s no doubt we’re living in the golden age of real estate investment. We have access to more real estate tools and information than ever before. Still, the prospect of investing in properties outside your immediate vicinity can feel risky and overwhelming.

Don’t let uncertainty hold you back from going all-in on the right opportunity. Instead, assess potential properties according to these three important categories to ensure a smart investment:

1. Location

Ninety-nine percent of the time, I advise people against investing in properties in urban, rural, or lakefront locations if you are investing from afar.

In major cities, like Boston and Detroit, it’s extremely difficult to assess how safe or desirable a particular property is without extensive knowledge of the surrounding neighborhoods. What can look like a great deal from afar may turn out to be a black hole for profits.

You’ll also run into similar issues in rural and lakefront settings. Zillow’s automatic valuation models aren’t as accurate when there are increased intangibles or few data points connected to a property. So if you’re looking in an area where, say, only four homes sell each year, you don’t have enough data to guarantee a sound investment.

In general, suburban properties tend to be the easiest to assess in value from afar, especially when they were built in the past 20 years by production builders. Fifty percent of such properties on Zillow sell within 5 percent of the Zestimate.

2. Surrounding area

It’s crucial to research an area’s schools, crime rates, and commute times before taking the plunge on a property. All three factors can issue a significant impact on ROI. Luckily, there are useful resources that can help you conduct research from afar.

For example, GreatSchools rates and reviews school districts around the country, making it easier to determine how the schools by properties line up to others. You can also use the app Life360 or the website City-Data.com to reference sex offender maps or monitor burglaries and violent crimes in focused areas. Surely, the better the schools and the lower the crime rates, the more profit you’ll be able to earn on a property.

A prime property will also be close to businesses (think jobs), public transportation, and major highways to larger cities — reducing commute times all while appealing to future tenants. Keep in mind that these amenities provide convenience to tenants as they plan out how moving to your property can better their lives. The more removed a property is from such amenities, the less likely it is that you will attract and keep tenants.

3. The fundamentals

Several fundamentals of real estate investing ring true regardless of the location. First off, properties at or below replacement value are most desirable. To find these, assess the value of the land, and determine what it would cost to replace the house if a total loss occurred. If the sale price of the property is less than the number you come up with, it's worth a closer look.

Secondly, properties with favorable comparables will yield better returns. If you come across a $150,000 house sandwiched between a few $300,000 homes, chances are you’ll be able to fetch more for rent based on the location alone.

Finally, if the cap rates — the property’s value divided by its cash return — is 10 percent or above, it’s generally a sign of a sound investment. This is the case because even if the home falls in value or the area isn’t the best, the house will sell simply because of its return potential. In turn, if you’re planning to rent the property, ensure you can get a 1 percent (or better) return.

Modern-day technology has reinvented the real estate industry and opened doors for cross-country investment opportunities. With well-tested principles, such as the three above, you’ll be able to quickly and easily find the best properties across the country and maximize your potential for profits in locations you may have hardly considered before.

Grow Through Aquisition - By Marie Liamzon - Fourandhalf.com Featuring Mike Kalis

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:16:10 GMT

Growth Through Acquisition - Featuring Mike Kalis

Published February 2018

Acquiring Property Management Companies: Financing Deals, Finding Deals, and Integrating Processes | Fourandhalf Marketing Agency for Property Managers

Mike Kalis is the CEO and president of Marketplace Homes. He joined us on the Property Management Show podcast to talk about growth plans and discuss the challenges of acquiring property management companies.

Kalis Created – 19 Markets and 3,100 Doors

Marketplace Homes was born 11 years ago, in metro Detroit, during the collapse of the housing market. The idea was to help people get out of their existing homes and into a new home. At that point, the only way to do it successfully was to rent out the existing property.

The company grew quickly, and they appeared on the Inc. 500 list four years in a row as one of the fastest growing companies to watch. Marketplace Homes grew in 19 markets, and they presently manage 3,100 doors. They’re adding 150 to 200 doors per month.

The goal of Marketplace Homes is to give the property management industry the multiples it deserves. They want to have 30,000 homes under management and be the first public property management company on earth.

As a company, Marketplace Homes has done a lot of acquisitions, and they want to do more.

Some people become accidental property managers, just like others become accidental landlords . The market is pretty hot right now, and brokers who were making money selling homes full time are not so enamored with the property management business anymore. They’re burning out with this business, so Marketplace Homes is pursuing the portfolios of people who are ready to retire or pursue other opportunities.

Marketplace Homes plans to get to those 30,000 homes in five years. They currently employ 85 people, so they are ready and staffed up to handle that growth.

The Reverse of Growth and Castle Property Management

With the previous podcast focused on the lessons that could be learned from the closing of Castle Property Management and Mike’s presence in the Detroit market, it was hard not to talk about what went wrong with Castle. Like Alex, Mike believes they ran out of money. He also believes that people need to come first and tech needs to come second.

Great people will fix lousy processes and ineffective technology. However, great technology will not fix lousy people. The team at Castle was great. But, in a service-first industry, it’s very hard to focus on the tech and succeed.

The Challenges of Acquiring Property Management Companies

Acquiring property management companies comes with a number of challenges. Three of them are pretty obvious and difficult to overcome. They are:

Financing the purchase.
Finding companies that want to be bought.
Integrating the companies into your own operations.

How Do Companies Like Marketplace Homes Finance Their Acquisitions?

It’s a lot like buying real estate. You pay with cash or you settle for terms. Cash can come in through investor money, operations money, or other types of income. If you’re trying to put together several deals and you have the cash flow to support it, you might explore an SBA loan. Otherwise, you can rely on outside investors, bank loans, and your own capital.

The other option is to buy a company with terms. You know that each door you acquire will generate a certain number of dollars every month. With an acquisition, you’ll take a percentage of that income and give the rest back to the owner.

It depends on what the sellers want and the buyers agree to. Some want a large check so they can go off and explore different opportunities. Others like getting a monthly payment coming in from those properties.

The key is a good partnership. The sellers have to be sure they’re going to get their payment if the deal is for terms instead of cash. To offset that risk, sellers often earn two or three times more than they would in a cash deal. Otherwise, you have to trust the buyers. If you’re worried that you won’t get paid, you probably shouldn’t do the deal.

Deals don’t close when there’s a lack of trust. Face to face meetings can make a big difference. Meeting each other and getting an idea of what each company is about can inspire a better business relationship. Physical connections are helpful when you’re acquiring a company. So is the exit strategy. If the seller doesn’t have a clear exit strategy, there’s a good chance the deal won’t close.

So – cash, loan, or terms are the best ways to finance an acquisition. Or, some combination of all those. And, meet someone face to face when you’re buying or selling. Be honest, and talk about exit strategies.

Why Sell a Property Management Company: Fitting into Industry Shifts

Property managers who were once brokers know there’s more money to be made on the brokerage side now, and that’s a good reason for them to sell their companies. The industry has shifted. There aren’t as many accidental landlords right now. So, if you built your business off those clients, you have a shrinking portfolio.

The property management industry is in a state of suspension. Property managers do well in a down market, such as the one in 2011 and 2012. Property managers do pretty well in a hot market, too. Just look at 2015 and 2016.

Currently, the industry is in between cycles. The next couple of years will likely be quiet, especially in terms of accidental landlords. The accidental landlord client has been reduced by about 70 percent. That will continue to drop, as the investor client emerges.

There’s also a geographical difference. In Atlanta, it’s easy for investors to put money into real estate. It makes sense. But, in New Jersey, it’s hard to get the same outcomes. Investors are priced out in markets like San Francisco. So, depending on where your company is located, the next few years will make a difference to whether you’re able to grow.

Take a look at your portfolio. Is it made up of investors who are still acquiring properties, or is it made up of accidental landlords? Investors will grow. That profit is going to happen, and hopefully those gains go towards other properties.

Property management is a counter-cyclical business. This is perhaps the biggest Bull Run for real estate in 100 years. So, if you’re choosing to be a property manager instead of a broker during this period, you had better be the very best property manager in your market. You can survive, even in a competitive market, if you’re great at what you do.

But, if you’re a mom and pop shop managing 70 homes, you may need to reflect on whether you’re the best in your market. With the market trending the way it is; if you’re not the absolute dominant person in your market right now, it might not be a mistake to sell while there’s still some value in your company. That’s the thought process of Marketplace Homes.

How Do Companies Like Marketplace Homes Find Companies to Buy?

To grow through acquisition, you need to know where to find the smaller 70 to 100 unit portfolio companies with people who are burnt out. You also need to find larger companies that are ready to transition. Sometimes, it’s as simple as picking up the phone.

An acquisitions team can provide support by reaching out and staying in touch with companies that may inquire years before they’re actually ready to sell. That’s a longer sales cycle.

Networking is a big part of the acquisitions process. It’s critical to attend events like PM Grow Summit and NARPM conferences. Be open and willing to chat honestly. It’s not too hard to get lists of property managers from organizations like NARPM. Sending out emails and engaging in constant outreach is the best way to acquire those properties.

It’s hard to think about the end or exit when you’re building a business. If you have an end goal in mind while you’re growing, that’s great. The point is to build an institution instead of a one-person business. It’s not about you and it’s not even about your company. It’s about knowing how to build something that has real value. You’re creating something that produces financial results. Marketplace Homes wants to take that thing you’ve created to the next level.

How Do Companies Like Marketplace Homes Integrate the Businesses They Buy?

After the acquisition is found and financed, it’s time to integrate the new company into the established company. This can be tricky.

The goal is to not lose owners. Marketplace Homes has an onboarding team, where specific people from each department will be assigned to the portfolio. There’s also a Solutions Team who talk to homeowners about the partnership. Every single client that’s acquired is contacted. They introduce themselves and explain what’s going on.

The exact fee structure is kept in place. You might argue that this doesn’t make sense, and may even cost money, but it can be an important way to establish trust and maintain stability.

Otherwise, most of the processes can stay the same. Some operational things may change, such as contact information for emergency repairs. Those are the things that owners are taken through, step by step. There’s also a team that contacts tenants. Similar to the onboarding process with owners, things are explained to the tenants so they know what’s changing and what isn’t.

The branding depends on the company that’s been acquired.

For Marketplace Homes, the general practice is to absorb all of the acquired companies under their umbrella. It makes the most sense and it keeps the business simple. The exception is when there’s a brand that carries equity. And, this may change in the future. Staying open and flexible is a good way to succeed.

It wouldn’t be a Property Management Show podcast if Alex didn’t ask his guest about their customer acquisition cost. For Mike and Marketplace Homes, it changes for every funnel and every market. Generally, it’s between $400 and $700.

5 Secret Hotspots in America - By Mike Kalis ThinkRealty.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:16:02 GMT

5 Secret Hotspots in America - By Mike Kalis

5 Secret Investment Hotspots in America | Think Realty | A Real Estate of Mind

To most people, the idea of taking 42 business trips in one year may not sound like a whole lot of fun. That’s what my 2016 looked like – but I actually loved it.

Why? Because I’m one of those annoying people who thinks he has the greatest job on earth. I eat, sleep, and breathe real estate investing. On these trips, I get to hunt for great new-construction investment opportunities for my company’s clients. It’s important for me to get it right because we guarantee our results. If an investor purchases a brand-new home through one of our partner builders, we guarantee the rent for up to six years.

In 2016, I visited countless American cities, cruised their neighborhoods, assessed their markets, and learned what big builders like Lennar and D.R. Horton have in store for them. Along the way, all the people I spoke with expressed what I’d call pensive optimism. They were feeling upbeat about how their markets were shaping up, but at the same time, they weren’t willing to guarantee a full-on rebound anytime soon.

So, what does that mean for real estate investors? Everyone has their own valid theories, and here’s mine: You should invest when and where everyone else isn’t. It may sound risky, but I believe America’s under-the-radar cities — the ones that aren’t garnering tons of publicity for how terrifically they’re rebounding — are the ones we should invest in. In other words, if how healthy a city’s real estate market amazes everyone, you’ve already missed the investment train.

That said, during my recent travels, I fell in love with the investment potential hidden within these five humble American cities:

1| Birmingham, Alabama

Just two years ago, Birmingham was crowned the most affordable city in America, thanks in big part to its low property tax rate – half a percent of the price of a home.

You can get a whole lot of house in Birmingham. New construction costs less than $100 per square foot, which means a 2,000-square-foot property may run as low as $160,000, and your annual tax bill would be a paltry $800.

Birmingham boasts a dynamic tech startup scene and a growing job market. Furthermore, new corporate development is poised to stimulate the real estate scene. Mercedes Benz, for example, recently closed on a new 225,000-square-foot industrial property, and global auto supplier Grupo Antolin just announced it will create 150 new jobs in the city by 2020.

2 | Grand Rapids, Michigan

As a Michigan native, I’m extra-passionate about the exciting renewal happening around my home state. Grand Rapids is a small city with a strong, emergent economy. The metro area is home to billion-dollar company Amway – a brand that employs nearly 20,000 people.

Spurred by the rebounding auto industry, Grand Rapids also enjoys one of the fastest-growing manufacturing sectors in America. Over the past five years, the local job market in manufacturing alone has grown nearly 25 percent.

Property taxes in Grand Rapids run right around 1.7 percent of a home – not Alabama, but certainly not a bank breaker. The sweetest perk of this real estate market? Residents are eager to rent. In fact, my company helped an investor purchase a new construction home for $180,000, and within three days of closing, it rented for $1,800 a month.

3 | Rio Rancho, New Mexico

Just outside of Albuquerque, New Mexico, Rio Rancho is endowed with hard-working middle-class residents. Intel has a huge plant in the city that employs thousands of people, but the plant’s future is in limbo. Over the past few years, a steady flow of layoffs has sent real estate prices tumbling.

However, New Mexico’s government is investing heavily in localized job creation, and as a result, companies ranging from s to Facebook have planted roots in the area. At this rate, Rio Rancho’s economy will rise sooner rather than later.

A brand-new $130,000 home in Rio Rancho will be worth exponentially more 10 years from now. Along the way, you can benefit from the fact that Sandoval County’s property tax rates run less than 1 percent.

4 | Jacksonville, Florida

For beach-style living sans beach-style prices, the greater Jacksonville area is the place to be. The city’s large military presence supplies ample jobs, a steady job market, and a consistently strong rental demand. The federal government plans to boost military spending over the coming years, so we can expect plenty of growth in this area.

Last time I was in Jacksonville, I learned that a large developer’s growth target is nearly 2,000 building permits by 2018. That’s just one builder; you can be sure other companies also have grand plans for this market.

5 | Greenville, South Carolina

Greenville has it all: a great industrial base, a vigorous job market, and a strong military presence. The metro area hosts Michelin’s U.S. headquarters and large manufacturing plants for brands like 3M, General Electric, Honeywell, and Lockheed Martin.

Even with healthy growth and industry, Greenville’s real estate prices still haven’t dramatically rebounded from the dropout. You can acquire decently sized new-construction homes for less than $200,000 — and property tax rates are less than 0.6 percent.

The hottest real estate markets in America aren’t necessarily the big cities everyone is writing about; they’re smaller, hard-working towns that fly under the radar.

Although builders and local realtors may only feel pensively optimistic about the current housing market, you should feel very optimistic about the investment opportunities located in the five cities listed above.

Construction and Real Estate Companies Ready for Disruption - By Rhett Power - Mike Kalis

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:15:59 GMT

Inc Magazine - Construction and Real Estate Companies Ready for Disruption

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30 in there 30's D Business Detroit - Mike Kalis By R. J. King

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:15:55 GMT

30 in Their Thirties: Michael Kalis // 32

By Hour Detroit -

September 27, 2013

CEO and Owner,

MarketplaceHomes.com, Livonia
Revenue: $30M // Employees: 100

Looking to revolutionize the residential home market, Michael Kalis started an online marketing company that acts as a real estate brokerage firm. Founded in 2007, the company was foundering until Kalis acquired it for $25,000. “At the time, it was basically a landing page,” says Kalis, CEO of MarketplaceHomes.com. “We saw a way to sell new homes and help people sell their existing home — all over the Internet.” The company doesn’t build dwellings; rather, it links prospective buyers with builders, both here and around the country. Based in Livonia, the firm expects to deliver 1,400 new homes this year. “We’re open from 9 a.m. to 9 p.m., seven days a week,” Kalis says. “You pull up to one of the model homes, call the number on the sign, and we’ll (remotely) open the doors and turn on the lights. Our trained specialist is with you the whole time.” Called iTours, the program can be accessed virtually from a home computer, as well. Over time, Kalis has developed several unique programs, in addition to the virtual tours. Under one of the programs, the company will agree to lease a new homebuyer’s existing residence for up to six years. “Some people have trouble selling their homes, so we help them avoid one of three scenarios — double payments, a smaller new home than they wanted, or the cancellation of a new home,” he says. — R.J. King

Move Over Ethel By Mike Kalis - ThinkRealty.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:15:20 GMT

Move Over Ethel: Real Estate Investing is Now a Team Effort

By Mike Kalis - www.thinkrealty.com

Move Over Ethel: Real Estate Investing is Now a Team Effort | Think Realty | A Real Estate of Mind

By Mike Kalis

Over the past few decades, real estate — like pretty much every industry on the planet — has undergone a huge transformation, thanks to technology.

Let’s flash back to 1972 for a moment. Things were simple back then: A gallon of gas cost 55 cents, brand-new homes were selling for less than $30,000, and every town had a few friendly local Realtors who guided buyers, sellers and investors through one of the biggest financial decisions they’d ever make in their lives.

If you were interested in buying a home in Livonia, Michigan, for example, you’d visit Ethel the Realtor — a nice lady who’d lived in the area for decades — and she’d parade you around town and give you the inside scoop.

This was the perfect solution for the times. In the pre-internet era, Ethel served as an investor’s Google or Zillow (or any other digital service you’d use today). She knew which houses were currently for sale, which houses would soon be for sale, and how much homes in the area should cost.

These days, however, Ethel is falling out of fashion. Though you can still find thousands of people just like her all across the country, there are great limitations to working with localized Realtors.

Why Ethel Is Passé

Ethel is a hard worker, but she’s only human.

Back in the day, her firsthand knowledge of her market was invaluable. She was the gatekeeper of all local insights and research, providing clients with data that helped them make informed decisions.

Today, however, some brief browsing on the internet can teach you more about your potential investment than Ethel ever could.

Beyond that, Ethel’s services are grossly overpriced. As an individual, she’s only able to sell four to six homes per year. In order to make a decent living, she charges her clients out the wazoo and pockets a hefty fixed commission for every deal she facilitates. In some cases, that’s 6 or 7 percent!

Due to her low volume, Ethel’s priority is milking every possible cent out of each transaction. In fact, she used to guide clients to overpriced listings because consumers just couldn’t conduct their own market research.

Thankfully, things are much different today. Modern investors see much more bang for their buck when they use technology to their advantage and partner with large, high-volume brokers who conduct business nationally.

Benefits of the Team Experience

Large brokers take a team approach to real estate — and this provides a number of benefits to investors, including:

1. Responsiveness. Ethel the Realtor can only devote her undivided attention to one client at a time, and she definitely can’t be in two places at once. When you work with Ethel, you end up speaking with her voicemail more than you speak with her.

When you work with a team, however, someone is always available to answer your call, respond to your email, or — if the firm is especially tech-savvy — take you on a virtual tour of a property.

2. Marketing. Ethel wears a lot of hats, but not all of those hats fit very well. She can’t afford to hire a marketing team, so she takes care of everything herself: photography, social media, staging and more. If you’re selling a property through Ethel, her grainy iPhone photos won’t do the home any justice, and her modest Facebook following just won’t drive enough eyeballs to your property.

A team provides all the benefits of a full-fledged marketing service. That means professional photography to showcase the property, high-quality staging, an expert copywriter covering the property highlights and more.

3. Expertise. As I mentioned earlier, Ethel can only do so much. Even if she were a well-rounded expert in all things real estate, there’s simply not enough time in the day for her to give every facet of the deal the attention it deserves.

Working with a team, you have multiple experienced professionals standing in your corner, and each of them specializes in a part of the process. As the deal progresses, you can be sure that your main point of contact knows what the heck he or she is doing — and your best interests are always being kept in mind.

4. Property management. Once the deal is done, Ethel is done. She’s off to find her next source of commission. She’s not going to find you tenants, collect your rent checks, perform maintenance or manage the property for you.

Many large brokerage firms offer property management as part of their services. Once a house is bought, investors can sleep easy knowing that the same group of people will now help them maximize their investment.

Sorry, Ethel…

In the end, Ethel simply can’t compete.

She should be applauded for all of the hard work she’s done for so many buyers, sellers and investors over the decades, but nowadays, she can’t offer the same quality and breadth of service that a modern real estate team can.

Sorry, Ethel, but the real estate biz is a team game now.

Avoiding Ripoffs - By Mike Kalis Thinkrealty.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:15:15 GMT

Avoiding Ripoffs - By Mike Kalis ThinkRealty.com

By Mike Kalis

June 2016

Thanks to a rocky recent history, American real estate has been dubbed the “land of milk and honey” for foreign investors. Countless people from across the globe are scooping up American houses like they’re hotcakes, spending an average of nearly $500,000 per purchase, which far surpasses the average U.S. home price of $255,000.

On top of that, foreign buyers typically put down larger down payments and face higher interest rates because their assets are more difficult to verify. While American prices may be low, the financial stakes are still very high for overseas investors. That milk and honey can easily turn sour if buyers aren’t strategic throughout the purchasing process.

This potential rip-off goes much deeper than the list price of a property; the catch is in the quality of the home. All too often, foreigners fail to do their research, overlooking the need to thoroughly inspect the house and its surrounding area before pulling out their checkbooks.

Before working with my company, a current client of mine found herself in this very predicament. While living in Australia, she purchased a home in Missouri for a mere $30,000. She signed on the dotted line without ever seeing the property in person or researching the neighborhood. With such a favorable price, she just couldn’t resist what seemed like a low-risk, high-reward deal.

She packed up all her belongings, flew to the other side of the globe and arrived at the doorstep of a home that was not only located in a seedy part of town but was also essentially unlivable in its current state. Water damage, wonky floors, crumbling walls—it was falling apart.

She called a repairman to assess just how bad the damage was, and the night before he was scheduled to do his inspection, an arsonist set the house on fire and nearly burned the whole thing to the ground. The buyer didn’t have insurance, and the costs to repair the home skyrocketed to $60,000. In a neighborhood where homes were selling for between $30,000 and $40,000, her best plan was to cut her losses and walk away from her bad investment.

AVOID THE RIP-OFF

Our Australian client lost a lot of money and time, but situations like these can easily be prevented. Here are three tips for international shoppers who are looking to purchase property in America’s buyer-friendly market:

1. See for Yourself

The ideal move is to travel and see the property with your own eyes, or ask someone you know and trust to do it for you. This is the best and only way to determine whether the property and its surrounding area are as advertised. Meet your agent face to face to establish a personal bond, and pick the brains of the locals. Ask the guy working at the gas station down the road about crime in the neighborhood. Ask the lady walking her dog about the community and local schools. Be a smart shopper by building a knowledge bank of firsthand experience and information.

2. Read the Reviews

If traveling isn’t an option and you don’t know a single person where your potential investment property is located, consult a credible third party like Zillow. More often than not, online reviews are just as reliable as personal recommendations, and a site like Zillow will allow you to compare price listings, learn about schools and educate yourself on crime rates. An agent might tell you crime rates are low and you’re getting a great deal, but if Zillow shows a catastrophically different estimated price and a laundry list of police reports, you know you’re getting scammed.

3. Take the Safe Bet

Don’t be greedy about your return. As my Aussie friend illustrated, investing in the cheapest thing you can find can easily backfire. Instead of buying a $30,000 home that you believe should be worth more, why not search for a home in the $70,000-$100,000 price range that you know is a sure bet? You may only get a 7 or 8 percent return, but you’re much more likely to see appreciation and be in a better area that’s worth the investment.

As you pursue American real estate, call on those around you and remember to utilize your resources. The last thing you want is to be ripped off in a prime economy that promises endless opportunity. Be smart and take the necessary precautions so you can enjoy living in the land of the free and the home of the brave.

Why Technology Should Make Network Marketing Obsolete - By Mike Kalis - www.startupgrind.com

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:15:03 GMT

Why Technology Should Make Network Marketing Obsolete - By Mike Kalis - www.startupgrind.com

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Fox News - 2008 Story - Featuring Mike Kalis -

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 20:10:29 GMT

Fox New Story 2008

Fox News Featuring Mike Kalis

Marketplace Homes Guarantees Rent For New Home | Fox Business Video

Detroit Area Company Gives Hope - John Caufield Builder Magazine

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 17:04:29 GMT

Detroit Area Company Gives Hope By Joh Caulfield Builder Magazine

DETROIT-AREA COMPANY HELPS BUYERS BREAK FREE FROM EXISTING HOMES

Marketplace Homes, which guarantees lease payments, is expanding its builder network.

By John Caulfield

2011

Detroit-Area Company Helps Buyers Break Free From Existing Homes | Builder Magazine (builderonline.com)

A Michigan-based company that is capitalizing on the need to help home buyers to separate from their existing homes is looking this year to triple the number of markets in which it currently operates.

Since 2003, Marketplace Homes in Plymouth, Mich., has been offering a unique service to home buyers and builders: If that buyer purchases a new home from one of Marketplace’s preferred builders, Marketplace will guarantee monthly lease payments to that buyer on his or her existing home for up to six years, regardless of whether Marketplace finds renters for their properties.

Last year, Marketplace Homes helped builders in 13 markets sell 205 homes. Ninety percent of those homes are in Michigan , and Marketplace only did one deal in five or six of those markets. “But we saw these as growth opportunities,” says co-owner Mike Kalis.

His goal in 2011 is to help builders sell 365 homes and to expand to 36 markets. Last year, the company hired two directors of national expansion, Curt Shewell and Mark Laforett, from Pulte and Centex, respectively. (Kalis once worked for Pulte, and he recently added Pulte’s former COO Steve Petruska to Marketplace’s Board of Advisors.)

Marketplace’s network already includes several regional and national builders, including Orleans Homes , Drees Cos. (with which it just started working in Nashville and Indianapolis ), Lennar , Taylor Morrison , and William Ryan Homes .

“Our goal is to establish a footprint in as many markets as possible and to become builders’ preferred vendor on a larger scale,” says Kalis, who calls what his company does “cloud real estate,” because it can sell homes anywhere and manage rentals all from its headquarters location using computer technology. By working with bigger builders in multiple markets, Marketplace has been able to tap in with more relocation prospects.

“Chicago has been great for us so far,” says Kalis, who told Builder last week that he had just had initial discussions with D.R. Horton , that market’s largest builder.

Since its Chicagoland division started working with Marketplace last August 26, 80% of Orleans’ contracts there have been Marketplace-assisted buyer clients, says Brian Fink, the builder’s divisional vice president of sales and marketing.

“Marketplace has put the I-N-G back into moving,” says Fink, who has been in the housing industry 17 years. He told Builder last Friday that Marketplace had just provided Orleans with five new sales leads. “It’s created a new market, a subculture that didn’t exist before.”

Kalis says his company spends about $18,000 per month on radio ads in conjunction with what its builder network spends promoting its services. The first day that Orleans promoted Marketplace’s service on Chicago radio stations, “Marketplace got 60 hits on its website,” says Fink, who adds that his company uses “thousands” of directional signs each weekend to advertise its homes and Marketplace’s lease guarantee. And when Chicago got hit with a massive snowstorm in early February, untold numbers of people stuck in their cars for hours heard Marketplace’s radio commercial several times.

Kalis says that 95% of the existing homes it controls become rentals at a time when the demand for rental properties is growing strongly in many markets. The homeowner still pays the mortgage and property taxes until the house is sold, and Marketplace takes care of the maintenance and utility bills. Renters, says Kalis, are offered the option to purchase the house at a certain price, which price they can lock in even if they don't buy the house until a couple years later.

Monthly lease payments vary by market, but one of Marketplace’s selling points is that those payments help homeowners cover their mortgage payments on their existing homes. (Fink says that in Chicago , Marketplace’s lease guarantee is covering between 80% and 83% of a buyer’s existing mortgage payment.)

Builders pay Marketplace Homes a real-estate commission that also varies by market but is higher than what a real estate agent might charge. (Kalis would neither confirm nor deny one builder’s statement that his company pays Marketplace $20,000 commission on a $300,000 house sold through this process.) Kalis did say, though, that he’s not disposed to offer builders discounts if his company works with them in multiple markets or helps them sell a certain number of homes.

Nevertheless, Kalis is confident that “there are lots and lots of deals to be made” over the next three to five years, “especially in the more challenged areas,” such as Las Vegas and Florida , where so many homeowners’ mortgages are still underwater.

Kalis says his company isn’t interested in purchasing a home buyer’s existing home outright and then trying to resell it. For the past three years, Orleans has had a program in place where it resells its customers’ homes to investors. Fink says that investors buy about 15% of the houses they are offered.

Marketplace Homes once had a similar program, too, but Kalis observes that “the problem in a weak market is that this business has a weird way of steering you to the houses you bid too much for.”

John Caulfield is senior editor for Builder magazine.

Expanding in Weak Markets By John Caufield Builder Magazine

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 17:00:32 GMT

Expanding in Weak Markets

MARKETPLACE HOMES EXPANDS IN WEAK MARKETS

Its formula of offering lease payments for unsold existing homes translated into 543 sales last year for its preferred builder network.

By John Caulfield

Marketplace Homes Expands in Weak Markets | Builder Magazine (builderonline.com)

Marketplace Homes

Top Seller: Joel Parrot, a solutions manager for Marketplace Homes, helped builders in Chicago and Denver sell 144 homes in 2011.

And you thought your salespeople were good.

Joel Parrot, who for the past 18 months has been a “solutions manager” for Marketplace Homes , helped that company’s preferred builders sell 144 new houses in 2011. Parrot was one of at least four of Marketplace’s 22 solutions managers who each negotiated more than 60 purchase agreements with buyers last year.

The Plymouth, Mich.-based Marketplace helped sell 543 homes last year, a 165% increase over 2010. The carrot that Marketplace has been dangling since 2003 to win over prospects is its guarantee of monthly lease payments on their existing homes for up to six years if they purchase a new house from one of the builders in Marketplace’s network . In many cases, those existing homes get rented instead of resold.

Mike Kalis, Marketplace Homes’ managing partner, believes that Parrot’s sales total might have been the highest for any individual seller in the industry last year. “We haven’t found too many other people who sold more than 50 [houses],” he tells Builder.

Parrot, who worked for Pulte for four years, has a master’s degree in real estate development and management. He attributes his success at Marketplace to the company’s leasing strategy. “Nearly every client I deal with feels stuck: They can’t move into a new house because they can’t sell their old home. We unstick them.” He says the majority of new homes he helped sell last year were priced in the low $200s to low $300s.

Parrot says he also benefits from the fact that he’s not tied to selling in just one area. On any given day he’s dealing with between four and six buyers in his two primary markets: Chicago , where he works with 10 builders; and Denver , where he works with four. In the fourth quarter of 2011 alone, Marketplace helped K Hovnanian sell more than 25 homes in Chicagoland, says Kalis.

Marketplace currently works with nearly 40 builders in 36 markets in 18 states. These include nationals such as PulteGroup and Lennar ; regional players such as Ashton Woods , Orleans , The Drees Cos ., William Ryan Homes , and Taylor Morrison ; and market-specific builders such as Lombardo Homes , ICI , Maronda , and Goodall Homes .

Kalis says he’s seeing encouraging signs of improving consumer confidence. But home values in most markets are still a long way from being anywhere close to full recovery. These conditions are why Kalis projects that Marketplace can increase the number of purchase agreements it negotiates to 1,500 homes in 2012. He also predicts that a good number of new-home buyers’ existing houses will be converted to rental properties, some of them permanently.

As for Parrot, he’s shooting for 200 sales this year.

John Caulfield is senior editor for Builder magazine.

Broker Thrives by Removing Impediments to New Home Buying - By John Caufield Builder Magazine

Mon, 02 May 2022 16:57:36 GMT

Broker Thrives by Removing Impediments to New Home Buying

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5 Ways to Avoid Last Minute Cancelations - By Mike Kalis Builder Magazine

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 16:53:52 GMT

5 Ways to Avoid Last Minute Cancelations

5 WAYS TO AVOID LAST-MINUTE CANCELLATIONS

Protect yourself from sale-killing situations like buyer's remorse and financing woes.

By Mike Kalis

5 Ways to Avoid Last-Minute Cancellations | Builder Magazine (builderonline.com)

You’ve been working with a nice young couple for months, helping them plan their dream home. They’ve chosen custom cabinets, concrete counters, hardwood flooring, and ugly green walls throughout. But that’s fine. It’s their house, and they’re going to love it.

Mike Kalis, CEO, MarketplaceHomes.com

Once you break ground, they check on your progress every weekend, and they’re constantly asking you tons of pesky questions. But, once again, it’s their dream house. They’re going to love it, and it’s going to be worth it to you in the end.

But then, the unthinkable happens: The young couple gets cold feet and cancels at the last minute. After six months of hard work on a $400,000 home, you end up not getting paid.

Now, you’re stuck with a house that has custom cabinets, pricey counter tops, and and a really custom hardwood floor throughout. Reselling this beast isn’t going to be easy, and until you find a buyer, you’re carrying loads of unexpected costs — interest, utilities, taxes, and more. Chances are that you’ll end up lowering the price to push your immediate inventory and potentially lose money on the project.

This situation stinks, and believe it or not, it happens far more often than it needs to. In my experience, one in six home sales are canceled by the original buyer prior to making it to closing.

Most Cancellations Are Avoidable

I’d venture to say that at least 95% of cancellations are avoidable, but first let’s look at the 5% that aren’t. There’s simply nothing you can do about unforeseen circumstances like unexpected job changes or death. Cancellations for these reasons are truly unavoidable.

But when it comes to reasons like indecision, lost financing, or a client’s inability to sell the home he or she currently lives in, you can take measures to protect yourself.

Here are five ways to prevent last-minute cancellations:

1. Get a partner commitment. Financing should never be the reason you lose a deal. In the months leading up to your close date, you can avoid this fate by getting a commitment from all of your partners — the buyer, the title company, and the mortgage lender — that holds them accountable to a firm deadline and charges a late fee to the lender or title company for each day the home doesn’t close.

This process becomes infinitely easier if you create relationships with local banks and lenders who are known for being willing to wait several months to close a transaction. The big guys do this in-house, but if you’re not that big yet, you can still get strong partnerships and hold your partners accountable to close on time.

2. Avoid home-to-sell contingencies. Don’t write a contract that’s contingent on the sale of a prior home. Just don’t do it. If your clients aren’t confident about selling their old home, why should you be? Instead, offer a guaranteed sales program so the buyers know the bottom-line price they’re walking away from. Or offer them a guaranteed lease so they can keep moving forward while they sell their old home. Contingencies aren’t really a sold home. Make the deal a deal.

3. Require hard cash for customization. Too often, buyers will put down a small deposit of earnest money and then ask for the moon: custom flooring and cabinets, steam showers, and over-the-top tech features. Protect your investment by requiring full payment for all customizations. When clients have already ponied up for their custom options — or at least covered half of the cost — they’ll be much more reluctant to walk away.

4. Stand behind your contract. When it comes time to sign the contract, be sure to send a clear message to your clients. Tell them that if they break the contract, they’ll lose whatever cash they put down and potentially still be liable for the entire cost of the home. Then, if they happen to get cold feet toward the end of the process, you can always remind them of the frank conversation you had several months back.

5. Write a prescription for buyer’s remorse. Buyer’s remorse is a simple fact of life. A home is a major investment, so it’s only natural for your clients to feel nervous about taking the plunge — especially if it’s their first one.

Here’s what I do: I label a box of breath mints with the words “Remorse Pills” and hand it to all of my clients right after they sign a contract. I tell them to take two pills every time they start second-guessing themselves and remember how excited and happy they felt on the day they purchased the home. We talk upfront about how remorse will happen, that it’s normal, and that it happens to everyone. This always produces a few laughs, eases the tension a bit, and helps them realize that buyer's remorse is to be expected.

Last-minute cancellations are no joke; they cost builders billions of dollars every year. With some preparation, however, you can protect yourself against the avoidable ones. If you arm yourself with a firm contract, solid financial relationships, and a dose of lightheartedness, you’ll never be stuck with lime green walls again.

5 Partnerships To Cultivate - By Mike Kalis Builder Magazine

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 16:50:24 GMT

5 Partnerships to Cultivate

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Three Reasons to Offer Multi-Generational Floorplans By Mike Kalis - Builder Magazine

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 16:47:48 GMT

Three Reasons to Offer Multi-Generational Floorplans

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Three Buyer Types That Could Double Your Sales - By Mike Kalis Builder Magazine

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 16:43:24 GMT

Three Buyer Types That Could Double Your Sales

THREE BUYER TYPES THAT COULD HELP DOUBLE YOUR SALES VOLUME

Second-home sales are ripe for the picking, says BUILDER contributor Mike Kalis, so don't hesitate to ask buyers to double down on their investment.

By Mike Kalis

Consumer confidence in the real estate market has never been higher. In fact, according to a recent Gallup poll, Americans now see real estate as the safest long-term investment they could make — and they've actually felt this way for the past two years.

Yes, you read that correctly. Real estate is now seen as the safest bet out there. Safer than stocks and safer than gold. As a builder, this should make your eyes light up. Now is the perfect time to ask home buyers to double down on their purchases and scoop up a second home. What do you have to lose? Even if most people shy away from the idea, the 5 percent who don't will provide a significant boost to your bottom line.

Back in 2013, before real estate officially became the American investment of choice, around 2 million Americans already owned investment properties. With the rising confidence in the market, it’s safe to say that number has grown — and will continue to grow.

There is no one-size-fits-all approach to earning a second sale. You need to tailor your sales pitch to each person's unique goals, finances, and preexisting knowledge of real estate investing. Here's how to properly frame a second sale to three specific types of buyers:

1. The Accidental Landlord: Every once in a while, you'll come across an unassuming buyer who is sitting on a pile of cash. Whether it’s in a savings account or a retirement fund, many people would love to convert those savings into real estate — they just don't realize it yet.

When you encounter these buyers, don’t immediately try to sell a second home. Instead, begin by educating them on the overall concept of real estate investing. Dive into the numbers and explain how, on a cash purchase, they would likely get a 7 to 10 percent cap rate, plus 3 to 7 percent property appreciation, for a total of 10 to 17 percent return on investment. Or if they put a mortgage behind the purchase, that number would balloon even higher. Reiterate your warranties to show the buyer exactly why new construction poses less risk than other avenues. And if he or she seems hesitant, suggest a neighborhood with smaller, less expensive homes to get started.

Lastly, make sure they know there are property management firms out there — like mine — that'll guarantee rent for up to six years! If you play your cards right, you won't just sell a second home; you'll create an investment partner for decades to come.

2. The Savvy Investor: These people already own multiple properties, but they're always on the lookout for a bargain. They might make it seem like they came to your development looking to scoop up one home, rent it out for a few years while you build out the rest of the neighborhood, and then unload it for a healthy profit after the area appreciates. But deep down, they’re just waiting for you to pop the magic question: "If I can get you a really great deal, would you be willing to invest in a second property?"

This "great deal" could come by way of a price cut on the second home or even a guaranteed rent arrangement on both properties — depending on whether you have partnerships in place that allow for this to occur.

You don't need to waste any time explaining the benefits of real estate investing because these folks are already reaping them. Just cut to the chase, sweeten the pot, and begin the negotiation process.

3. The International Tycoon: International money is pouring into the U.S. real estate market by the billions. In 2015, for example, foreign investors acquired $91 billion in U.S. properties — double the amount from the previous year.

Naturally, this trend makes international buyers excellent candidates for second sales. They are eager to invest in the American economy, and to them, American builders are the gold standard. Both the quality and price of what you offer beats anything they can find in their homeland.

In my experience, many international investors assume they won't be able to qualify for financing in America. Either that or the idea of dealing with our banks and filling out all the paperwork seems too daunting. But if you, as the builder, can pave the way by partnering with mortgage companies that specialize in international clients, you would be doing them a huge favor.

If you help an international investor stretch $200,000 cash into multiple properties, you would be doing him or her a huge favor. In addition to earning a second (or third) sale, you would also be planting the seed of a potential long-term partnership. You could become the go-to builder for his or her international colleagues.

Don’t be shy about upselling. America has never been more receptive to real estate investing. Stay on the lookout for these three types of buyers, and make them an offer they can't refuse.

Mellennials Need Homes They Can Afford - By Mike Kalis - Builder Magazine

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 16:28:35 GMT

Millennials Need Homes They Can Afford

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Starting a Business is Hard, Try Flipping One - By Mike Kalis Entrepreneur Magazine

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 16:24:33 GMT

Starting a Business is Hard, Try Flipping One Instead.

Starting a Business Is Hard So Try Flipping One Instead

By Mike Kalis October 1, 2015

Opinions expressed by Entrepreneur contributors are their own.

Fixing a flat tire is much easier than building an entire car. Using that same logic, repairing a struggling business is often easier than creating a new one from scratch.

Shutterstock

This helps explain why even the most driven entrepreneurs struggle to succeed when founding new ventures. Indeed, it has been shown that as many as 9 in 10 businesses fail, often because entrepreneurs run out of money, the product-market fit is weak or the scalability just isn’t there.

A frequently overlooked alternative? Flipping an existing business. When you already have the framework, logo, letterhead, budget and brand recognition in place, success can be a straightforward endeavor. With a little foresight, it’s possible to take the helm of a struggling business, make some much-needed changes and catapult it to stardom.

When flipping beats founding

Finding a business to flip is relatively simple. Start by identifying a trend that has the potential to dramatically alter an industry. Next, look for businesses in that industry that aren’t prepared to capitalize on the impending disruption and voila: You have a list of potential candidates.

In my case, the industry was Detroit’s real-estate market and the disruptive force was collapsing home prices. At the time I was working at Marketplace Homes, and I realized that if the business was going to succeed in such a volatile climate, it needed a fresh start. The business’s value was extremely low, and I pounced at the first opportunity to purchase it.

Because Marketplace Homes had been around for about five years, it had a Google history that helped its search results ranking. Further, it already had an established client list in Detroit, and a payroll structure in place. In addition, since I had the privilege of seeing how the company worked before buying it I had a realistic sense of its potential. Perhaps most importantly, had a great relationship with the original founder, and he served as a built-in mentor once I took the reins.

After purchasing the company, I immediately cleared house and relieved everyone (except for one assistant) of their duties in order to create a fresh start for the company. We cut down on side operations in order to focus solely on Marketplace Homes’ core business: working with builders to sell new construction. Once we made the change, profitability followed due to cash-heavy commissions and low costs.

Be warned: Despite the positive outcome, flipping a business is no cakewalk

Here are a few things you should know before you prepare to flip business.

It takes effort. Flipping a business takes a lot of hands-on work. The idea that you can just outsource everything and hire a phenomenal manager to turn the whole thing around is misguided. It's vital that you -- the person ultimately responsible for the turnaround -- are deeply and personally involved in the process.

After purchasing Marketplace Homes, I set up an IVR system that urged callers to press “1” for billing, “2” for sales and “3” to list a property. Regardless of which number was pressed, the call came to my desk. I wanted to create the illusion of a large company, but the reality was I was the person doing all the work.

Even though you technically aren’t founding a business, the same mindset, skills and energy levels are required.

And money. Revamping a business can be expensive. For starters, you’ll likely inherit unexpected costs incurred by the previous owner -- everything from unprofitable clients to risky investments. Regardless there will be loose ends that need to be tied up and paid for. Even if the company comes with a cheap price tag, the entire flipping process will likely be a drain on your income for some time before you get things moving in the right direction.

To prepare for this, you need to be willing and able to raise cash and embrace fundraising opportunities. In the first few years, flipping a business is all about finding and closing deals as quickly as possible.

And energy. Because the flipping process requires a large emotional and time commitment, make sure the company you’re targeting is in a field that stimulates and motivates you. If you find something you’re organically passionate about, you can harness that preexisting enthusiasm and apply it to rebuilding the business.

Don’t be scared of risks. Remember to successfully flip a business, you need to be flexible enough to try new strategies, and you can’t be afraid to try off-the-walls ideas.

With hard work, humility, proper research and a desire to succeed, shaping up a struggling business often proves to be a more lucrative option than starting one from scratch. With the infrastructure that’s already in place, entrepreneurs who decide to flip instead of found have a major leg up over their peers.

Thinking of Going National? Follow These 5 Tips By Mike Kalis Entreprenuer Magazine

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 16:21:03 GMT

Follow these 5 Tips

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Right Now Beats Right Next Door - How to Win in E-Commerce By Mike Kalis Entreprenuer Magazine

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 16:17:29 GMT

Right Now Beats Right Next Door

'Right Now' Beats 'Right Next Door': How to Win at Ecommerce

Sure, shaking hands with every customer is charming in an "Andy Griffith" sort of way. But limiting yourself by excluding ecommerce could quash your business.

By Mike Kalis December 13, 2016

Opinions expressed by Entrepreneur contributors are their own.

There's something undeniably charming -- and perhaps a bit nostalgic -- about being a local business that conducts only face-to-face commerce. But in this tech-driven day and age, you're selling your customers short by limiting the scope of your services to an in-person setting.

Sure, you might be able to say you've personally met and shaken the hand of each and every one of your clients, but as your business expands, a time will come when those one-on-one interactions no longer make sense.

In fact, they'll only be stunting your growth and overall success.

Dollar Shave Club wasn't bought for a cool $1 billion because Michael Dubin , its founder, did such a great job meeting with consumers and getting his products into big-box retailers. Instead, the company reached the stratosphere because it realized that modern customers care more about convenience and quality than visiting a store or office in person.

Indeed, driving even just five minutes to a local drugstore has become the less desirable option. So Dollar Shave Club uses technology to cut out the middle man and sell directly to the doors of millions of people -- all while keeping its prices lower than the competition's.

Remove the in-person burden.

Ecommerce companies with amazing processes are actually able to provide their huge client bases with better service than most brick-and-mortars can. Why chain yourself to a storefront when there's a whole big world out there you could be serving in a much more efficient and scalable fashion?

Plenty of industries can benefit from ditching their reliance on in-person commerce. Take real estate, the industry I work in. Buying or renting a home is a major investment, and for consumers, meeting face-to-face with realtors has always been the norm. But under the requirements of this model, real estate agents end up spending all their time rushing around town, trying to cram as many appointments as possible into each workday.

And that just isn't a scalable business model. On on top of that, it's not what modern consumers want anymore.
Related: 4 Simple Tips for Finding Incredible Real Estate Deals

After noticing this trend, my company, Marketplace Homes , created an app that allows tenants to videochat with realtors on demand regardless of the latter individuals' location; it also enables investors to purchase homes in any state while working with one centralized company.

Now, each of our agents is able to show at least 15 to 20 homes each workday; and even at that rate, we're still providing a better service than the competition. To top it off, this digital model has made it possible for us to easily scale our business to the national stage.

While approaches will vary by industry, here are a few easy ways online businesses can beat out the local competition:

1. Humanize the experience.

Going digital doesn't mean you can't be human. Consumers should still feel as though they're dealing with real-life people who care about their desires -- not robots or outsourced customer service professionals.

With my company's app, for example, our vidchat feature makes it clear that you're working with a human being you might find down the block. We also send realtor biographies to every client we work with, ensuring that that person feels a personal connection to the real estate professional walking them through their major life decision.

If it simply isn't possible for you to provide real-life human interaction, use tech to your advantage. Amazon has proven that providing personalized recommendations to online consumers results in a big boost to sales. In fact, one study found that product recommendations increased conversion rates by more than 900 percent .

2. Quality is key.

Marketing yourself as the cheapest option out there is your one-way ticket to looking like an impersonal, low-quality big-box retailer. The vast majority of consumers say they're happy to pay extra for goods and services when they know they're getting higher quality than what's offered by the Walmarts of the world. So make quality your selling point.

Casper -- the Dollar Shave Club of mattresses -- followed this strategy when it launched its new line of dog beds. To justify the beds' high price tag, the company explained to consumers that it had spent two years studying canine sleep patterns, and consulting dog psychologists, to arrive at the best possible product.

3. Use tech to club the brick-and-mortars.

For consumers, the charm of a local face-to-face business quickly wears off when lines grow long, processes become cumbersome and deadlines pass without a word. Once these things happen, brick and mortar turns to rust and steel, and customers feel like hitting local companies where it hurts.

Instead, be an ecommerce company featuring the kind of amazing technology that responds to the common hardships consumers face. This is exactly what businesses like Stamps.com and Rocket Mortgage are doing. They see that today's shoppers no longer want to waste their lunch break at the post office or drown in confusing paperwork when applying for mortgages. So, they're swooping in with tech-driven options that allow people to easily accomplish these tasks wherever and whenever they want.

Of course a small demographic of people will always prefer to stand in line at the local grocery store every day. That's their way of getting out of the house and socializing.

However, a larger demographic -- busy working people -- is sick and tired of conducting business the old-fashioned way. This is a ripe market whose participants eagerly await your online business to come along and solve their pain points in the most humanized way possible.

Are you starting that process today?

4 Types of Clients You Can't Afford to Work With By Mike Kalis - Entrepreneur Magazine

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 16:14:21 GMT

4 Tyes of Clients You Can't Afford to Work With

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3 Ways to Spread Intra-Perineurial Culture - Entrepreneur Magazine - By Mike Kalis

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 16:11:21 GMT

3 Ways to Spread Intrapreneurial Spirit

3 Ways to Spread an 'Intrapreneurial' Spirit Throughout Your Company

You can promote autonomy and creative thinking among your team members while still keeping a grip on the wheel.

By Mike Kalis February 9, 2018

Opinions expressed by Entrepreneur contributors are their own.

It’s no bombshell revelation that employees love autonomy. After all, we live in an age of entrepreneurship, and it’s highly likely in such an environment that many of your team members are working on their own ideas. They see themselves as makers and leaders in their own right, not just cogs in a machine.

graphicstock

That's a good instinct: Proof? A 2017 study by the University of Birmingham reported the value in autonomy: Researchers there found that those employees in the survey who were more trusted and empowered at work reported higher levels of job satisfaction .

This trust-satisfaction link is a phenomenon I’ve seen in my own company: When people have good ideas, we like to give them opportunities to carry out those ideas; and some team members have actually gone on to craft entire roles for themselves. In doing so, they've made drastic improvements to the company.

The reverse is also true, however, when employees feel too restricted: Keep team members on a short leash, and you could be stifling creativity and lowering employee satisfaction.

Autonomy and entrepreneurial thinking give people a sense of control, accountability and ownership of their work, which can create what we call an "intrapreneur." This is someone who thinks and acts like a business owner within an organization. Intrapreneurship leads to a sense of achievement when things go well, a drive to fix things when they go wrong and a company that is unstoppable.

Eliminating fear and allowing ideas to flourish

Admitting autonomy and encouraging intrapreneurial ventures can be a scary prospect. There’s an inevitable ego factor that many business leaders must first overcome.

I remember hiring my first couple of salespeople, and how they turned out to be better at sales than me. It was a tough pill to swallow. But, as soon as I shelved my ego and embraced a sense of humility, I was able to empower these salespeople to take the lead.

Then, once I let them run and be great at their jobs, they became some of our biggest advocates, and we started driving the company forward, in tandem.

Giving autonomy generously rather than begrudgingly handing it over can be a tough learning curve for employers. But, by exploring your employees’ ideas and acknowledging their inner intrapreneur, you can catalyze new ideas for your company while making your team happier overall.

How to foster intrapreneurial thinking in your company

Here are three ways you can promote autonomy and intrapreneurial thinking in your own team while still keeping a grip on the wheel:

1. Listen and ask questions. You don’t have to hand over creative freedom all at once. Team members will adapt better to their new autonomous roles if they’ve had a chance to prepare and test the waters.

During a brainstorming session, take the time to really listen to people’s ideas. When someone speaks up, respond by asking how he or she would make this idea a reality. This is your hypothesis stage -- it costs nothing, risks little and allows your team members to feel comfortable taking control.

Sometimes, you’ll hear an idea and want to throw that employee out of the meeting for wasting everybody’s time. But stick with it -- ask questions that help the employee get better at generating ideas.

After all, the idea may not be viable, but your response is vital. Did you respond positively? Can you expand on the idea? Did you make the person feel special for sharing, or cut him or her down? Autonomy doesn’t mean you can’t help one another out. In fact, a study by university researchers found that employees came up with 37 percent more ideas when they started off brainstorming as a group.

Good things come from empowered employees, so don’t shut them down. Instead, give them the floor, and help them turn their ideas into successful initiatives.

2. Embrace the “expandable pie.” Business leaders love their pie, but they can get a little too attached to all of the slices it contains. Sometimes, they can focus too much on predefined departments and roles.

The “expandable-pie” concept is a good way of opening up those constraints. Say that there are seven slices for seven people in your company but then an eighth person comes along with a great idea. That doesn't mean you have to fire someone else to maintain the pie. The pie can grow, along with the creativity and ambition of the team.

According to a Global Entrepreneurship Monitor report, 32 percent of American adults surveyed said they had direct relationships with entrepreneurs, indicating that encountering an entrepreneurial spirit is pretty much inevitable, and impossible to ignore. Instead of restricting intrapreneurial thinking, then, take the plunge and encourage it.

But, take caution: Maintaining an unrealistic pie may drive fears about demotions or firings throughout your company. In that case, intrapreneurial thinking will be easily silenced, and all members of the business will suffer.

3. Add in some fun. People will feel more capable of contributing their ideas if they can do so in a fun, lighthearted way. With this in mind, companies are getting creative at showing employees that they care. For example, Gap corporate employees receive free access to local museums , a move that might inspire and incentivize their own creativity at work.

Autonomy and intrapreneurial thinking can be spun with fun, too. My company awarded cash prizes through what we called the "Why?" awards. Team members were encouraged to submit a one-page entry that included a "why" question followed by what they were willing to do to answer it or fix the problem.

Around 200 entries were submitted and got everyone's brains working creatively while boosting a welcoming, intrapreneurship-driven environment.

Another move: We hand out “Get Out of Jail Free” cards. Each cardholder has free license to bring an idea to the table -- no matter how wacky or expensive. Gamifying otherwise dull pitch meetings can help foster team members' involvement and willingness to pursue entrepreneurial ideasthey've been holding onto for a while.

Creativity is the true equity value of corporate America. When you keep employees tied to an hourly wage and tell them to keep doing the same tasks over and over, you rob your company of its competitive advantage.

Instead, consider: You have all these minds in one place, and if you empower intrapreneurial thinking and autonomy, you’ll get so much more than an hourly rate out of people: You’ll get a team whose members who care as much about your company as you do themselves.

Entrepreneur Magazine - Outsource or Insource? By Mike Kalis

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 16:05:56 GMT

Entreprenuer Magazine - Insourcing or Outsourcing?

Outsourcing Is a Shortcut; Insourcing Is an Investment

Published here - Outsourcing Is a Shortcut; Insourcing Is an Investment (entrepreneur.com)

On the surface, outsourcing seems like an ideal way to run a business. But 'insourcing' actually saves time and money and builds a lasting culture.

By Mike Kalis April 25, 2018

Opinions expressed by Entrepreneur contributors are their own.

If you rip pages out of business schools textbooks, you'll find they echo a similar sentiment: Outsourcing is in. The commonly read book, The E-Myth, helped popularize this idea that entrepreneurs should outsource as many parts of a company as possible.

You've probably also heard the old admonishment about working on your business instead of in it. Tim Ferriss's famous The 4-Hour Workweek reinforced this idea, putting a modern spin on the perks of outsourcing.

Not surprisingly, then, outsourcing has become a popular approach among entrepreneurs. Not only does the practice take obligations off the leader’s plate, it also saves money, at least initially. Instead of paying someone the locally mandated minimum wage, entrepreneurs who go through third parties gain access to a pool of employees thousands of miles away who will work for as little as $2 an hour.

Accordingly, this choice seems like a no-brainer, but I am going to propose the radical idea that paying more for your team and insourcing will yield a higher profit.

A 2017 study from Pew Research Center underscored this belief. It found that 30 percent of Americans surveyed believed that outsourcing jobs was having a negative impact on their own jobs and livelihood. As an entrepreneur, you'll find that your employees can be your biggest assets; so ignoring their concerns about outsourcing isn't the most intuitive step to take.

I can confirm this lesson from personal experience: Having learned it the hard way, I’ve come to agree that insourcing can actually save time and money and build a culture that lasts.

Out of sight, out of mind

My first attempt at outsourcing occurred when my company was very small. I opted to hire a virtual assistant in a different country thinking I'd found a cost-effective way to increase my productivity. The problem with a virtual assistant is that he or she doesn’t know you and will only do the work that you send over. A motivated in-house assistant, on the other hand, can walk around the office and organically recognize business opportunities to bring to you. In other words, he or she finds work and offers ideas you might never think of on your own.

The need to continually provide work for my virtual assistant, along with the obstacles formed by the language barrier and cultural differences between us, ended up creating more work for me. Today, I have an insourced in-house assistant. Not only is she forward-thinking and creative, but she also knows my wife and kids (including their schedules), as well as my managers and their communication styles. She produces high-quality work; and hiring her has been a vastly superior investment.

Insourcing as an investment and its three powerful benefits

In my experience, insourcing and adding capable team members whom you can interact with on a daily basis will help your business reach a new level of success. Here are three benefits businesses stand to gain from insourcing that can’t be realized by taking the outsourcing shortcut:

1. You create a collaborative environment. Collaboration breeds creativity, and creativity is the only real equity value companies have in the modern economy. According to a World Economic Forum report, The Future of Jobs , creativity is the third most important skill for employees to have, having risen to the No. 10 spot in 2015. In turn, creativity requires the kind of fostering environment that leads to company profits.

Despite these findings, businesses continue to outsource their call centers to places like India, so they never have to think about them. The problem is that those “employees” aren’t thinking about your business, either. Every day, customers call them with questions and complaints, and these outsourced employees stick to the script because that’s what their roles require.

Don't let a call center happen to your business: Cultivate a collaborative environment by insourcing talent close to home, and encourage your team members to share their big and small ideas alike. Often, small iterations can yield the biggest creative breakthroughs. Hundreds of small tweaks over a longer period of time are what separate a good business from an outstanding company.

2. You increase the depth of your roster. Talent is incredibly important and increasingly rare. What occasionally goes unmentioned is that talent takes time to cultivate. Instead of hiring from outside of your company, why not utilize the skills of your employees you’ve already invested in?

Hiring internally provides you with employees who understand how your business operates. More than 45 percent of our team members started in hourly positions. As new opportunities became available, and these team members demonstrated they could win at the role in front of them, they then transitioned into positions with increased responsibilities and higher compensation. Consequently, when you insource, you add depth to your roster of talent.

According to Gallup, only 32 percent of American employees are engaged in their work. However, insourcing team members and then promoting those individuals within your company can populate your talent bench and increase engagement.

To do this, surround yourself with people you can rely on, and reward the most deserving team members by moving them into roles that match their passions and talents. Recognizing the achievements of your team members increases the motivation of the entire team.

3. You construct an impactful culture. At our company, anyone who interacts with a client knows what our company is about. These employees attend meetings on a weekly and monthly basis and come to understand that our core values matter. Company culture is the soul of a business. When you outsource work, you miss out on that; and the decision you've made may have severe consequences.

The American Institute of Stress , for example, produced a study showing that an unstable culture results in an increase in voluntary turnover of almost 50 percent. Meanwhile, companies such as Nike, which was voted as having the best company culture in 2017 by Indeed, have low turnover rates and are highly desirable places to work. Nike's coveted culture includes advancement opportunities, and the belief that every individual counts and more.

The alternative is that you have to hunt for new team members, and that costs time and money. You can avoid these expenses by insourcing and developing a supportive culture with attractive values. Begin by being honest about your team's talents, and then find roles that allow people to do work they love.

On the surface, outsourcing seems like an ideal way to run a business. Many business owners -- myself included -- have been lured into outsourcing by the promise of lower costs and fewer worries. Ultimately, though, outsourcing usually turns out to be a bigger headache than expected, and you give up the benefits that come with adding employees to your team.

The next time you’re faced with the option to outsource, consider the investment that insourcing provides to your business's collaborative ideas, talent retention and overall culture. Then look inside for your next personnel need.

Entrepreneur Magazine - Thinking of Pursuing Greener Pastures? By Mike Kalis

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 16:00:53 GMT

3 Questions Entrepreneurs Should Ask Themselves Before Taking That Plunge

Thinking of Pursuing Greener Pastures? 3 Questions Entrepreneurs Should Ask Themselves Before Taking That Plunge

Don't confuse boredom or fear with the need to move on. Instead, stay put, and make that old pasture green again.

By Mike Kalis June 28, 2018

Opinions expressed by Entrepreneur contributors are their own.

To entrepreneurs, the world can sometimes look like a candy shop. Over here, there's a lucrative career in app design. Over there, you've just spotted a chance to revolutionize educational loans. For a creative businessperson, the idea of jumping into a new adventure is always appealing.

Thomas Barwick | Getty Images

That temptation is especially strong right now, given the tight labor climate we have, rife with opportunities. Between February and March, 472,000 more jobs opened up in the United States, according to the Labor Department.

These conditions make the “grass is greener” paradox seem almost ubiquitous for entrepreneurship: After all, from from a bird's-eye view 1,000 feet up, every new venture looks great, especially if it's in a trendy area like tech.

The reality check, however, comes upon closer examination of the people, systems and processes that probably made you weary of your own project in the first place. Me? I learned this the hard way.

How I lost almost a million dollars proving I'm not a tech executive.

I remember well how "greener pasture" syndrome got to me. I had noticed all the tech companies springing up around me and became green with envy. I thought to myself, I can do this, too, and then I can claim all of the value that comes with technology assets.

That's how I happened to leap into product design for an app to help homebuyers and sellers. We spent over $1 million hiring a seven-person development team to build the app. But it turned out that we could have saved probably $900,000 if we had simply outsourced a lot of the production. Of course,we couldn't have claimed that we were, and are, a technology company -- but we would have saved $900,000.

In short, you don’t have to completely pivot to enjoy variety and spontaneity in your career. By seeking out collaborative opportunities outside your wheelhouse, you can supplement your main mission with corollary adventures that inform and enrich it. Here’s a list of questions to ask yourself before you give in to your itchy entrepreneurial feet:

1. Would your fifth-grade self kick your butt?

If you’re feeling unsure, check your origin story, and see whether the move makes sense. Consult your inner fifth-grader: Would that crazy kid be mad at the thought of your starting a catering business? If so, you might be looking too far outside of yourself and your skills.

If, in performing this task, you find yourself struggling to tune in to your fifth-grade dreams, talk to your parents or siblings -- they're the ones who knew you before any money and success you've had came on the scene.

Richard Branson, for example, has said he turns to his mother to keep him grounded. She reminds him of the natural gifts and inclinations that he showed as a child. “As you grew, you perpetually had some crazy new scheme or other up your sleeve that you were convinced was either going to change the world, make lots of money or both,” she wrote in a letter to her little future billionaire .

2. Is money your main motivator?

Money doesn’t tend to strongly correlate with career happiness. Sure, you might need to cross a certain financial threshold in order to make your plans a reality, but once you're past that threshold, pay level isn’t significantly tied to satisfaction, according to a study published in the Journal of Vocational Behavior.

If money is the driving factor, see whether you can make your existing project more lucrative or add a side hustle that complements rather than complicates it.

3. Are you just burned out and bored?

Into every career a little fatigue must fall. But it’s vital that entrepreneurs not confuse fatigue for a lack of passion or drive. Feeling tired doesn’t mean you should pack up your lifelong purpose and try something else.

Rather than jumping into a new field, consider trying strategies that will lessen your fatigue. Try shifting responsibility for some of the smaller or more technical tasks to someone you trust on your team. Maybe you’re feeling bored because you have become too much of an expert at your job and need to challenge yourself in a new way.

There have been moments along my own 12-year journey when I’ve doubted my dreams because I’ve been drained. The chores and disappointments of business have sometimes seemed crushing -- I didn’t want to face another tax day or another meeting.

But had I given up on my ongoing project for what I thought were greener pastures, I would have found myself still entangled in those same weeds, just in a different place.

Getting excited about new opportunities is not a bad thing -- in fact, it’s probably a sign that you’re a natural-born entrepreneur. But amid all the noise of opportunity knocking, stay tuned into the passion and talent you started with. Don’t confuse fatigue or fear with the need to move on. Make the old pasture green again by investing in it and reinvigorating it until it feels like new.

How Mike Kalis Bought Marketplace Homes for $25K and Turned it into a $20 Million Dollar Business

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 15:56:58 GMT

As published in Forbs Magazine

How Mike Kalis Bought Marketplace Homes For $25,000 And Turned It Into A $20 Million Business

Amit Chowdhry Contributor

Tech enthusiast, born in Ann Arbor and educated at Michigan State

Aug 8, 2013,10:15am EDT

Mike Kalis, the chief executive officer of Marketplace Homes , grew up in Plymouth, Michigan and graduated from Michigan State University in 2004 with a degree in business. Kalis did not have access to much money while in college so he took a job at Cottage Inn. After graduating, Kalis took a job at Pulte Homes in sales. This job made sense for Kalis because he always enjoyed researching the real estate market.

Around 2006 Kalis noticed a lot of potential clients telling him that they wanted to buy a home, but they couldn't get rid of their other home. At Pulte, Kalis put together a program that helped people get out of their other homes using a method known as "solution-based selling." This meant that if you helped solve someone's problem, they would likely become a customer. The company sold around 20 homes with this solution.

Dick Chelten founded Marketplace Homes in 2002. Chelten become one of Kalis' biggest investors and is a mentor to him. Kalis felt like this solution-based program could be much bigger so he bought the business from Chelten for $25,000. The company grew to 100 homes sold in Metro Detroit shortly after that, which is around the same time that the housing market fell 90%. Marketplace Homes is expected to do around $20 million in revenues this year.

It became immediately clear that Marketplace Homes was doing something unique by helping people get out of their old homes. The company started to grow at a rapid pace and the phone calls kept ringing. While many banks were telling people to foreclose on their properties, Marketplace Homes said that people should keep their homes and try to save their credit. Marketplace Homes allows people to buy a new construction home, while listing their old home for 1%. You can lease your home for up to 6 years.

As the demand increased, Marketplace Homes had to become extremely efficient so they heavily invested in their technology platform. Marketplace Homes expanded quickly into around 20 more markets. Last year, Marketplace Homes did around 1,100 homes with nearly $350 million in new construction sales. Some of their biggest markets includes Detroit, Atlanta, Chicago, Columbus, and Orlando.

"We're doing real estate for the masses, not the classes. This is for the people that want to get out of the $150,000 home and into a $250,000 home. It's about the cops, the teachers, and the people that work very hard. They just need some help and through no fault of their own, their house is worth less than what it was. They don't know how to become a real estate investor, but we're helping them become one. To date, we have helped over 5,000 clients become 'accidental landlords,'" Kalis told me when I was sitting in his office at the Marketplace Homes headquarters in Livonia, Michigan.

Marketplace Homes Technology

By ramping up their technology platform, Marketplace Homes has been able to automate many solutions for their customers. These automated processes includes electronic agreements, automated triggers, and home automation. One of Marketplace's new technologies is called iTour. iTour is an efficient way for sellers to show their property to the most qualified potential residents anytime, anywhere. For the home automation technology, Marketplace Homes is working with iRule , a company backed by Detroit Venture Partners.

"What we're going to be able to do is control all of the houses that we manage and we sell remotely from our office. This includes being able to unlock the house, turn on the lights, and theoretically brew you a cup of coffee as you are walking through the property," said Kalis. "The value of this to the customer is tremendous. Speed kills deals in real estate! We challenge people to call 10 real estate agents and see how many call back. Our average response time is 5 seconds because we run everything through a call center."

Kalis said that one of the driving forces behind the average response time was by a tour that Kalis' team did with OnStar. During the tour, OnStar stressed that their customer service involved life-and-death situations. Kalis said that Marketplace Homes decided to handle their call center like it was a life-and-death situation too. Marketplace Homes also does phone call recording and calculates metrics based on how quickly that staff members pick up their phone.

Subprime Mortgage Crisis

I asked Kalis how the 2008 subprime mortgage crisis affected his company. "Since new construction takes about 6 months to build a home, MarketplaceHomes lost a lot of deals. Back then, it was very common to get a loan of 100%. The builder would start on the home, but then the loans went away. Then the buyer could not close on the home. The builder would say that you contractually owe me $300,000 and the client says 'I want to give it to you, but I can't.' Marketplace Homes had to handle a lot of cancellations because people could not get financing on their homes that were half-built. We watched a lot of intelligent businesses and builders go out of business. Conversely, that is what actually helped us become successful. This became an opportunity for us to help builders save their business," Kalis told me.

Pros and Cons Of Being In The Midwest

I asked Kalis what he believes are the pros and cons of being based in the Midwest are. He said that a huge pro is the work ethic that people have in the Midwest. Kalis told me that when he visited builders in Phoenix, "'they basically said that if you are from the Midwest, we will hire you.' People show up early and have a constant drive throughout the day. People are trained very well because of the large institutions that are here here. Every time we put job listings up, we always get such great candidates. The cost of living and cost of having an office here is great also."

Marketplace Homes chief marketing officer Chintan Pathak added that when we were in college, people always explored moving to a bigger city. He said that being able to "build something in a city that is considered an underdog is indescribable."

Kalis told me that people in Detroit are very open. When they called Josh Linkner (Detroit Venture Partners), Dan Gilbert (Quicken Loans founder / Cleveland Cavaliers owner), and Steve Petruska (former COO of Pulte Homes), all of them were willing to meet without hesitation. "I don't think it is like that in many other cities. People in Detroit genuinely like to see other people do well and help out in any way they can," said Kalis.

Kalis and Pathak told me that the only con of being in the Midwest is that it gets a dark in the winter earlier in the day. Pathak told me that they compensate for that by having a lot of fun things to do in the office like skateboarding. You can learn more about the company culture in the video below:

https://youtu.be/kwJV-gajXog

Amit Chowdhry

Entrepreneur Magazine - Don't Be Afraid to be a Big Fish in a Small Pond By Mike Kalis

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 15:48:49 GMT

Don't be Afraid to be a Big Fish in a Small Pond

By Mike Kalis December 15, 2015

Opinions expressed by Entrepreneur contributors are their own.

Everyone loves a good entrepreneurial Cinderella story. We cheer for companies that start from nowhere and wind up revolutionizing entire industries.

Shutterstock.com

Unfortunately, this happens pretty infrequently. Nine out of 10 startups end up folding, and while there is a long list of factors that contribute to this jarring statistic, I believe one of the biggest reasons for failure is that founders seek to be the best at everything instead of the best at something.

My company, Marketplace Homes, launched in real estate -- a $117 billion-dollar industry . We knew we’d be a tiny minnow swimming in a gigantic body of water, so instead of attempting to be the best all-around real estate company in the entire world, we chose to be the biggest and best fish in the smallest pond we could find.

We narrowed our target market to new construction in metropolitan Detroit (our home base), and we decided our ideal clients would have homes to sell and would be moving up in housing sizes. In the blink of an eye, we went from targeting billions of people to targeting thousands -- and as a result, we were able to confidently say we were the best seller of new construction homes to move-up buyers in the metro Detroit area.

We differentiated ourselves from our crowded industry by shrinking our scope. And once we did that, it became easy to identify our greatest strengths and build upon them as we grew.

With a little deep thinking, any industry can be boiled down to very specific micro-markets and demographics. Here are three tips to help you differentiate your startup and have it stand out from the pack.

1. Identify an age range.

A great way to narrow your scope is to identify the age range of your ideal clients and adjust your offering accordingly. For example, instead of competing with the likes of Fitbit and Apple Watch, Live!y cornered the senior citizen wearable tech market by creating a smartwatch that counts steps, provides medication reminders and can call for help with the push of a button.

By zeroing in on move-up buyers, my company realized our demographic tended to be 25- to 35-year-old new parents searching for larger accommodations for their growing families. We knew our young clients would embrace tech with open arms, so we invested in a brand app for them to use.

2. Use price as a niche.

It was important for my company to determine how much money our ideal clients were looking to spend. Were they searching for million-dollar homes, or were they in the market for something less expensive? Identifying our lower price point early on was key to establishing our identity and differentiating ourselves.

A fashion startup called Everlane is making waves, because it sells stylish luxury handbags at an absurdly low price point. If these same bags were being sold elsewhere, they’d cost hundreds of dollars more. Offering affordable (but still high-quality) goods is how Everlane successfully stands out in a crowded online retail space.

3. Target familiar territory.

Premature scaling is the No. 1 cause of death for startups, so don’t just jump headfirst into an infinitely large market. Even if you have grand plans to change the world, you are much more likely to make waves by dominating a smaller demographic you know like the back of your hand.

As a lifelong Detroit resident, that’s exactly what I did with my company. Finding so much early success in our hometown boosted our brand’s recognition and paved the way for a smooth national expansion down the road.

Every startup needs to be able to say it’s the best at something. Otherwise, it faces an uphill battle proving its worth and justifying its existence. Today, every marketplace is crowded; that’s what makes differentiation such a key part of launching a modern business.

Dig deeply into the sub-genres of your industry, and don’t be afraid to splash around in the smallest puddle you can find. It worked for my company, and it will likely work for yours, too.

3 Tips to Buying 4 Homes a Month at a 25% Discount

mike@greatlakerealty.com (Mike Kalis) — Mon, 02 May 2022 15:41:35 GMT

Build to rent is worth a look

By; Mike Kalis

The real estate market has been on fire for the past few years with a shortage in housing, rampant inflation, and changes in generational housing preferences. But one thing has stayed the same– real estate continues to be a key component in investment portfolios, particularly rental properties.

But, buying a rental property during a seller’s market and increasing interest rates isn’t always easy. We’ve uncovered a few simple hacks to help interested investors buy multiple homes at 20-25% less than the going market price for a comparable property. By maximizing value and getting creative on where to cut costs, you can build up your rental portfolio at a fraction of the cost.

This article will explain why rental properties have been a proven investment and why building properties can unlock significant savings. Then we’ll get into three specific ways to build your rental portfolio– literally.

Why Renting Out Properties is a Great Investment

Real estate has been a key part of how the wealthy have become – and stayed– rich for decades. Here are a few reasons why:

● Property values are a hedge against inflation.

● Real estate is a simple vehicle to leverage your money. You only need 20% down to get the title to 100% of the property.

● With the right tenants, it’s truly passive income.

● Rental Homes creates a nice cash flow that often increases significantly with time.

● Real estate income has tons of tax benefits– meaning you will pay few or no taxes on that income.

● Properties pass through inheritance for largely untaxed generational wealth building.

Add to the list that it’s often a flexible asset that can be sold when needed (in the right market). These reasons are the basis of wealth building through owning rental properties. So let’s get into how to do it for less money to maximize your return on your investment.

How to Maximize Real Estate Investments

It may sound like magic, but making money in real estate is all about working with professionals, getting clear on what’s really possible, and focusing on value. Of course, not all builders are focused on maximizing value for rentals, but there is a predictable sweet spot that you can capitalize on.

Here’s why it’s a great time to do it:

● The housing shortage continues.

● Many Millenials either prefer to rent or can’t afford to buy a home– lots of people are looking for homes.

● Interest rates are going up, but they’re still relatively low.

So how does this all work?

Create your own version of what proven builders like DR Horton’s Express line have done. By getting land at the right price, building floor plans with the best value, and partnering with the right trades.

Why Build to Rent Instead of Buy Existing Homes?

While it’s certainly a viable investment to buy existing homes rather than building, there are a few reasons why a building can increase your ROI.

You have better control over costs. Buying property and then controlling the timeline, materials, and floor plan of your build can help you level out the market prices of existing homes.
You can customize your build to attract the best renters. The biggest fear of most landlords is having their property trashed by their tenants. You protect your investment by custom-creating a space designed to attract the most qualified renters.
You don’t have to worry about renovations. Most real estate investors trying to save money will opt for a fixer-upper. But this can land you in a money pit that doesn’t always have great ROI, not to mention the time you’re paying a mortgage without a renter in the home.

Now let’s get into three critical points to build your rentals properly so you get a 20-25% reduction in overall costs.

1. Buy Land at a Great Value

This means buying land that is at a below market price. That might mean branching out into less obvious or underdeveloped areas. You’ll be sending out tons of offers— it’s about casting a wide net. Expect a lot of “no’s,” but the yeses will pay out in spades.

There are some special considerations, too, like:

● How much work will landscaping or clearing the lot require?

● What is the proximity to existing water and sewage connection?

● What would be a reasonable property tax estimate for the area?

There’s a lot you can learn online about these things, but it never hurts to partner with real estate investment experts .

2. Work With Value Engineered Floor Plans

Again, this isn’t about striping costs entirely– it's about focusing on models that will have a great return. Floor plans that are easy to build, make sense for prospective renters, and maximize the available square footage.

Building a rental empire requires hands-on experience, humility, and the ability to say “no.” Spend time on build sites as much as possible so you can learn what it really takes to build a reliable property. Ask lots of questions of your trades and be ready to say “no” to all products that are increasing costs that a resident wouldn’t pay more for.

Remember, most vendors want to sell you the most expensive materials and appliances they can, even when cost-effective options will cover the job. Over time you’ll develop the confidence to know when a vendor is selling you something that doesn’t align with your value maximizing goals.

3. Work with Great Tradespeople

Finally, your team of builders, contractors, and tradespeople will make the difference between a great plan and a great reality.

While there are a lot of qualified contractors and tradespeople, not all of them specialize in maximizing value. For example, luxury builders will not have what you need for build to rent.

Instead, drive around the build sites of large production home building companies like DR Horton and Pulte Homes . These are the home building companies that boast a 20-25% margin, so they partner with the trades that know how to maximize value.

While at these sites, document the information of the trade’s names and phone numbers. They can often be found on the side of the trucks parked at the site. Then call them and work out your own deal.

Ready to Make Money in a Hot Market?

At Great Lakes Investments, we provide limited investment opportunities for accredited investors with strong moral values who are looking for exposure to build to rent in the hot West Michigan market. If you would like to learn more, click here .

Mike Kalis

References:

https://www.investopedia.com/articles/mortgages-real-estate/11/key-reasons-invest-real-estate.asp

https://www.mymove.com/buying-selling/guides/millennials-renting-works/

Keeping it RealEstate

When to fire a client

When to fire a client

From Bird Dog to Billionaire: A Creative Guide to Real Estate Investing - By Mike Kalis - creonline.com

From Bird Dog to Billionaire: A Creative Guide to Real Estate Investing - By Mike Kalis - www.creonline.com

From 4 Homes to 40 - How to Finance Multiple Rental Properties - By Mike Kalis SeekingAlpha.com

From 4 Homes to 40 - How to Finance Multiple Rental Properties

Don't Flyover the Flyover States - By Mike Kalis - Born2invest.com

Don't Flyover the Flyover States - By Mike Kalis

Keep your ear tuned to the market, not the glam

See past the outer trappings of the inner treasure

1. Is the asking price below the replacement cost?

2. Does the property offer more than a 10 percent cap rate?

3. Is your asking rent double your debt load?

How to Get the Best Offer on Your Home Trade-In WRITTEN BY MIKE KALIS RealtyTimes

How to Get the Best Offer on Your Home Trade - IN - By Mike Kalis

3 Times Sold Doesn't Mean Sold - By Mike Kalis Realty Times

3 Times Sold Doesn't Mean Sold

Idea Mesh - Ask Why One More Time Than Everyone Else - By Mario Schulzke in Idea Mesh Online

Ask Why One More Time Than Everyone Else

Mike Kalis - CEO of Marketplace Homes (ideamensch.com)

Ask, “Why?” I think it annoys everyone to no end, but if something doesn’t make sense to me in a meeting, I can’t stop myself from asking why until we uncover a solution that makes sense.

Where did the idea for Marketplace Homes come from?

What does your typical day look like, and how do you make it productive?

How do you bring ideas to life?

What’s one trend that really excites you?

What is one habit of yours that makes you more productive as an entrepreneur?

What was the worst job you ever had, and what did you learn from it?

If you were to start again, what would you do differently?

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

What is one strategy that has helped you grow your business?

What is one failure you had as an entrepreneur, and how did you overcome it?

What is one business idea that you’re willing to give away to our readers?

What is the best $100 you recently spent?

What software and web services do you use? What do you love about them?

What book do you recommend our community should read?

What people have influenced your thinking and might be of interest to others?

Why Entrepreneurs Thrive in Underserved Markets - By Mike Kalis - www.startups.com

Why Entrepreneurs Thrive in Underserved Markets - By Mike Kalis

The Trifecta of Unhappiness: Detroit circa 2007

Find your chance to shine.

1. It’s the talk of the town.

2. There are giants about.

3. There is a plague of happiness.

How to Reap Big Benefits from Build to Rent Investments - By Mike Kalis - www.biggerpockets.com

How to Reap Big Benefits from Build to Rent Investments - By; Mike Kalis - Biggerpockets.com

From Ozzy to Awesome - A Modern Landlords Guide to Vetting Tenants - By Mike Kalis - www.biggerpockets.com

From Ozzy to Awesome - A Modern Landlords Guide to Vetting Tenants - By Mike Kalis - www.biggerpockets.com

From Ozzy to Awesome: A Modern Landlord’s Guide to Vetting Tenants

Save 15% on New Construction Homes with No Negotiating- By Mike Kalis - www.biggerpockets.com

Save 15% on New Construction Homes With No Negotiating - By Mike Kalis - www.biggerpockets.com

Virtual Stagging - How to Make a Modest Property Look Marvelous - By Mike Kalis - RealtyTimes.com

Virtual Stagging - How to Make a Modest Property Look Marvelous - By Mike Kalis RealtyTimes.com

Less Rent Can Get You More - By Mike Kalis www.biggerpockets.com

Less Rent Can Get You More - By Mike Kalis- www.biggerpockets.com

How to Hire a Property Manager By Mike Kalis - www.biggerpockets.com

5 Questions to Ask a Property Manager

Selling Your Property Management Company - By Mike Kalis - www.buildium.com

Selling Your Property Management Company - By Mike Kalis ﻿

Selling Your Property Management Company

How to Improve Your Business’ Curb Appeal

#1: Clean (and Know) Your Books

#2: Upgrade Your Processes and Structure

#3: Prepare Your People

How to recover from a flood when you don't have insurance - By Mike Kalis - medium.com

How to recover from a flood when you don't have insurance - By Mike Kalis www.medium.com

A 3-Step Guide to Making Smart Cross-Country Investments - By Mike Kalis on www.biggerpockets.com

3-Step Guide to Making Smart Cross Country Investments - www.biggerpockets.com - Mike Kalis

Grow Through Aquisition - By Marie Liamzon - Fourandhalf.com Featuring Mike Kalis

Growth Through Acquisition - Featuring Mike Kalis

Kalis Created – 19 Markets and 3,100 Doors

The Reverse of Growth and Castle Property Management

The Challenges of Acquiring Property Management Companies

How Do Companies Like Marketplace Homes Finance Their Acquisitions?

Why Sell a Property Management Company: Fitting into Industry Shifts

How Do Companies Like Marketplace Homes Find Companies to Buy?

How Do Companies Like Marketplace Homes Integrate the Businesses They Buy?

5 Secret Hotspots in America - By Mike Kalis ThinkRealty.com

5 Secret Hotspots in America - By Mike Kalis

1| Birmingham, Alabama

The Trifecta of Unhappiness:
Detroit circa 2007

Selling Your Property Management Company - By Mike Kalis

MarketplaceHomes.com, Livonia
Revenue: $30M // Employees: 100