In the fourth of her five-part series, financial expert Danielle Hoston offers practical tips for life and wealth.
"Wisdom is the reward you get for a lifetime of listening when you'd have preferred to talk." - Doug Larson
Financial expert Danielle Hoston: One of my favorite clients ever has been Mr. Wilson. There was a time, however, that I wasn't one of his favorite brokers. When I first began my career, he was one of the most active buyers in my farm. I must have called him with every listing I ever had just to demonstrate my outstanding market prowess, but he was hardly impressed. My deals were simply not good enough. He was direct, gruff, and difficult to please.
Obviously, earning his business was a great accomplishment in my career, but there was a time that I almost lost him permanently.
The first time I met Mr. Wilson was when I found a property advertised in the LA Times that fit his nearly impossible requirements -- at least twenty-five percent below market. After a brief conversation about the property, he agreed to meet me for a physical inspection that Saturday morning. I arranged the walk-through with the listing agent who told me he would not be able to meet us at the property and would leave the keys with the manager. This should have been a sign, but I was too excited about the prospect of doing business with Mr. Wilson to notice.
The first unit we inspected was the very definition of a nightmare. The evicted tenant had decided in a last moment of vengeance to leave all of the faucets on in the unit and destroy the apartment with a massive flood. The floorboards were so damaged that the front door was barely able to be opened. The apartment reeked of many disgusting smells but none were as foul as the feces in the closet. This was the worst unit, but the other units weren't much of an improvement. Among many small problems, there were irate tenants, plumbing problems, and a dangerous garage. I made a few nervous jokes and offered to buy lunch for Mr. Wilson and his lovely wife in order to make up for wasting their time on this horrific building. He agreed to join me for lunch but refused to allow me to pay. Much to my surprise, he liked what he saw at the building. We closed escrow forty-five days later.
Over time, I learned why Mr. Wilson preferred distressed properties. His expertise as a contractor allowed him to capitalize on investments in disrepair by negotiating a price significantly below market. And so it went ... I found them. He bought them. We closed three separate transactions in less than six months. Needless to say, I was thrilled when he informed me that he planned to sell ten of his properties on the open market. I called him repeatedly to set up meetings to review the numbers and he always brushed me off. One day, the shoe dropped ...
"I would never sell my properties with you," he informed me.
I felt a kick in my gut. "Why not, Mr. Wilson? Did I do something wrong?" I asked.
"You didn't care about the rent money that went to the seller after we closed escrow on that last transaction," he replied. He hung up shortly thereafter. I was shocked. Actually, I was outraged. We had discussed the rent money. I had made several calls to both the agent and the seller and had come up with a resolution. I instructed his assistant on the course of action necessary and he promised to follow up. It never happened. Obviously, it was my mistake for not following up, but I never anticipated that it could cost me one of my best clients... I went to my mentor, Jonathan, for help.
After a brief lecture reprimanding for leaving such an important task in an assistant's hand, Jonathan had one simple answer. He told me to write a check for the rents that went to previous seller and an apology letter. I had made a mistake and now I had to mitigate damages. He was right, but I had $4,000 in the bank and the rents were about $2,500. I kicked myself for not following up, but $2,500 was a small price to pay to restore the relationship. I could hardly afford it at the time but I needed to do the right thing. My mistake might have already cost me the ten listings, but it wasn't going to cost me the next potential transaction with Mr. Wilson.
When I arrived at Mr. Wilson's office, I handed him the letter. He opened the envelope and saw the check. I doubt he even read the letter. Mr. Wilson then told me a story about why he loves the game of golf. He loved the game of golf because of its emphasis on integrity. He thanked me for demonstrating my own integrity and then abruptly informed me that he would list all of the properties he wanted to sell as long as I could have all of the proposals completed over the weekend. I worked over 30 hours in the next three days and listed the first seven the following Monday. After signing the listing agreements, he returned my $2,500 check to me un-cashed. It still hangs on my wall today as a reminder of maintaining integrity.
The beauty of being coachable lies in allowing another's hindsight to become your foresight. If I had ignored the advice of my coach, I would have undoubtedly lost the listings and any future business with Mr. Wilson. Over the years, Mr. Wilson has also become a coach and mentor to me in the field of creative financing and repairing distressed buildings. This knowledge has allowed me to structure deals and advise other clients. I have also become a more effective coach with the agents I mentor. In order to be successful, you need the coach and the ability to be coached ... one without the other is worthless.
|Danielle Hoston is a business and finance expert with Hoston and Associates. She is the mom of one and resides in Los Angeles.|