As you may know I like to make the beta reading of my book open sourced so the community that will be using them can actually gain the information and request changes or additional information to be added as the book is being written.
This post is One Chapter of my coming book, “GET THE DEAL”. Which the idea has it’s origins from the live training with the same name that I have taught to thousands of real estate investors all across the country and have had time to refine the information to answer the questions most asked at those trainings. Without further ado I want to encourage you to read this chapter and leave your suggestions in the comments below!
Booking Appointments Matters Most
“If you think you can do a thing or think you can’t do a thing, you’re right.”
– Henry Ford
The level of success you have in your business is going to be directly related to what you think is possible for you. One of my favorite quotes is the one above by Henry Ford. As I mentioned a few chapters ago most of the deals I purchased early on were listed online. That doesn’t mean that I wasn’t doing a ton of different high energy tactics like cold calling and door-knocking though. My problem was that I didn’t believe that I was good enough to help the desperate and motivated sellers that I was meeting. So I kept losing every appointment I went on.
If you’ve read my first book, “Broke To A Quarter-Million” you’ll know that I had quit my full time job office job to be a full time investor and was in the process of getting my real estate license. The same month that I passed the test and received my license was also my 3 year wedding anniversary. This happened to be 2 weeks after my former wife and I filed for divorce. This divorce left me with an empty bank account, no income and living off of my little brothers charity for the next year.
I had only gotten my license as an agent as a way to check MLS. Not as a source of income. In fact my friends will remember me telling them that I hated the thought of selling houses back then. Once the divorce started, I no longer had a partner to hold up the finances and had to reconsider sales.
During this year that real estate license that was originally just supposed to be for me to have access to the local MLS, became my only source of “potential” income. I had to go from being an office “bean-counter” to a master of sales and the clock was running. I quickly became buried in credit card debt, loans to family and a shrinking self-image as a man who lost everything that I had associated with “who I was”.
Sales was not my first choice. It was my only choice and I was terrible at it. In that first year as a real estate agent I only earned $17k and was struggling financially, but I had committed to myself and to my brother that I was going to become a “master of sales”. The next year I switched the brokerage I was with to join an investor friendly brokerage. This broker owned over 300 rental units in Boston, was doing over 100 deals per year and was only a few years older than me.
Over that next 12 months he hammered into my head the importance of booking appointments and negotiating “in person”. He sent me on over 100 “motivated seller” appointments all over the state of Massachusetts. Any time he wanted someone to go on an appointment, even last minute he new I would be the first to take it.
I took every free course, read any book that mentioned sales and took appointments any chance I got. I learned as much in the appointments as I did in all of the free trainings he offered. I could see my conversion rate increasing. It started slowly at first with 20%, then 25% then 30% and by the end of my first year with him I was closing 35%-40% of every appointment I went on. That year I earned $90k just as an agent even though I was splitting my commission 50/50 on the leads he sent me.
I am so thankful for that second year as an agent, working for an investor friendly broker. It was the hardest I had ever worked in my life and I felt like I was failing more often then I was succeeding most of the time, but by June I had earned more that I used to earn in an entire year and by August I had nearly doubled that figure.
What I learned is that the most important part of real estate investing is not just being able to find motivated seller, but it was also booking appointments. Equally as important was negotiating and closing those appointments.
Action Step: If you are a licensed real estate pay close attention to this chapter and practice it. If you are a wholesaler or investor on the buy side, make sure whoever is going on your appointments has read this chapter!
This is where the rubber meets the road. If you’ve been running great marketing campaigns then people are calling you back. This is the time to book an appointment. Once you’ve gotten them hooked, you want them booked!
There is no other conversation that wants to happen. The best place to talk to the seller is at the property of interest. If you’re meeting anywhere else, you’re missing out on the big opportunity. If you’re talking over the phone and hung up without booking an appointment you have missed an opportunity. Every phone call must be aimed at booking that initial appointment.
The simplest conversation is “what is the best day/time for us to meet at the property?”, I can meet you there at 2:00 tomorrow. What’s the best day for you? If they ask you to give them the offer over the phone here is my standard response, “The only way to give you a price is by going down and taking a look at the property. So what’s the best time that will work for you?”
Whatever their objection is, always come back to, “the only way for me to give you an offer is for me to get down to the property and evaluate it in person.” What’s the best time for you? Can you do tomorrow at 2:00 o’clock? Wednesday at 2:00 o’clock? What’s the best day for you for me to come down there?” And keep aiming to book that appointment.
We run cold-calling trainings on Monday so “Tomorrow and Wednesday” have always worked for my teams, but it can be whatever day/time works for your schedule and the seller. You can check out some of our live cold-calling sessions at GualterAmarelo.com and register to join us for some hands-on training.
Forging A Strong Relationship With Motivated Sellers
As you have likely figured out, simply finding the seller is only part of the discussion. If you want to make sure that the deal goes through, you want to make them interested in working with you. Unfortunately, this can be harder for some people than it is for others. Motivated sellers will get offers from various people often. So it’s all up to you or your investor friendly real estate agent to earn their trust and respect.
A motivated seller is often someone who wants to make a quick sale, but they also don’t want to get a bad deal. So, your main objective will be all about looking to find a way to build a good relationship and find a win/win solution. For one, show empathy with their desire and motivation to sell. Make it clear that while you are getting something out of this, you don’t want them to walk away feeling like they didn’t get what they wanted.
Just because a seller is motivated does not mean they will accept whatever deal you put in front of them. A good way to make a successful relationship bloom with a seller is to build a genuine relationship with the seller on a personal level. Your mission is to make them see that you understand their goal, and that you will be working with them to help them achieve that goal.
So, let’s say that one of your sellers is looking to move on because they have lost their job and want to move to a more realistic property. They cannot afford the property, or they are unable to make payments due to other debts. Whatever the reason, they’ll be looking for a good price as they want the funds to survive. So, it becomes your job to help them get the best price possible or give them a good offer if you wish to take on the property directly.
However, if you were dealing with someone who wants to relocate due to a job offer, they might not be so focused on the price, just the time frame. Their motivation is to get out quick whilst making some kind of a win on the property sale. So, you want to approach this carefully. You want to make the sale quick, but you have to appreciate the emotional stress that your seller is going through at that point.
The main difference with a motivated seller is understanding why they want out in the first place. So, if it’s about price, then you want to help them get the best price. If it’s about speed, you want to help them get the right speed of sale. If it’s about the property being in poor condition, you want to help them achieve the best price and/or solve the condition issues before getting the sale pushed through.
I can’t stress this enough, but at all times when working with anyone you should show that you care and value them. With sellers this simple act of being a decent human being will go very far.
Show Empathy, Get Results
The main thing that you absolutely want on your side when it comes to working with any motivated home seller is an ability to help them understand what you bring to the table. You want to show them first that you understand their problem, and that you WILL find a solution. Whether it’s getting them a good price, getting a sale managed quickly, or getting them a good deal on a property that needs work, you have a lot of things to do.
Why does this matter? Because a motivated home seller will be happy to work with you again and recommend you to others. This is the main reason why you want to really push to win the trust and care of a motivated seller. As soon as they understand that you are actually helping them as much as you are helping yourself, you will have gained their trust and ultimately their business. You never know what other real estate a seller owns and could potentially sell to you.
This helps your business to grow because you become known for being an expert who helps people to solve their property problems. From a quick sale to the simple escape from a nightmare property, you want to work with your sellers to understand their motivations.
Motivated home sellers always have a good reason for making the sale, so you want to show them empathy. Appreciate the scale of the problem for them, and help them understand why it matters so much. The sooner you can do this, the more likely it is that you can start producing positive results for them.
Working with motivated home sellers is all about cultivating a relationship of mutual trust and understanding. Once you help them to see that you can do the job they want. They’ll happily use you in the future and pass your name on to others. This is how you get repeat business and referrals, all because you’ve done a good job and helped your seller out.
To Purchase Or List – That Is The Question
Have you ever wondered, “Should I bring a purchase and sale contract or should I bring a listing agreement to my appointment?” It’s a very good question and I hear it at least once when I speak with investor who have their real estate license.
Of course, you are going to want to bring a purchase and sale to every appointment, you hope that they want to sign it, and 1 out of 10 will decide that they want to accept your offer. So as an agent you should always be prepared to put in an offer for yourself.
If you have the ability to also be an agent, then you’re going to want to also bring your listing agreement. Because say they don’t accept your offer or your investor’s offer, you still have the option to go and list the property for them at a higher rate.
So make sure you bring both contracts and make sure you offer both solutions to your sellers. When you go through the conversation, you first want to start with the offer and if they decline the offer you can say, “I understand. Look, that was for an investment partner of mine. I agree that the offer is very low. Let me move review and offer you the opportunity to list the property.”
This is where you will want to explain the difference of an investor off and selling on the market. I like to use this transition/explanation, “This is where you can sell it for a higher price, but understand it’ll take 3 to 6 months as opposed to a 30-day close that this investor can provide.” Even though you may be the investor, always let them know that you have a partner. Because remember, the bank is your partner and this takes some pressure off you when negotiating.
I have read dozens of books on negotiations and been to countless seminars and trainings from my years as a real estate agent. There are hundred of different tactics out there, but the main tactic that I want you to focus on is actually a “frame” or state of mind. You must understand that you have a higher value when you are negotiating from a place of knowing your numbers or your investor’s numbers. From that point forward, all negotiations are very simple.
Either you can make the purchase work or you will transition into helping with the listing. Knowing the numbers and how to communicate them is the key to negotiating from a place of strength. When handling the objection about how low the offer is you can agree with a sentence like this, “I understand where you are coming from. I would love to get that price. You have to understand the real costs that the investor is facing, including the risk they are taking by taking on this project.” Then explain why the buyer wants to have the price at a certain value.
You will also want to explain that this is a risky business and that you want to make sure you can make a profit from the work you are going to do. After explaining the numbers and showing the investor goal to profit it helps to ask the question, “is it okay that the investor wants to earn a profit if everything goes well with the project?” You may be shocked that 90% of the time the seller is very understanding with this when you present it properly
If you don’t have your license yet and are working a full time job it is okay to send your real estate agent to go and have this conversation with them and see if they can get the deal under contract for you. It is important that your agent knows how to have this conversation and I have many trainings for agents on this subject on my website.
At the end of the day, negotiations are all about how creative you can be, how creative can you get the terms, because it’s not all about the price. Sometimes I am willing to pay more than my initial offer if the seller is willing to do seller financing with reasonable terms.
Sometimes you are getting the price to a different range. Sometimes the terms can be shifted to a different strategy. In the end your creativity could have the seller adjust and say “You know what, I don’t mind a lower price if you can do this, this and this for me.” So it’s all about finding that common ground, what does everybody really want, and sometimes they can flex on the price to make sure the deal is even better for everybody.
Negotiations are not about being sneaky or forcing somebody to do something that they don’t want to do. True negotiation comes from being clever in the sense that you are creative. By having enough tools to be able to actually help both parties better so you both come out with a win-win scenario.
The problem with most people I see in negotiations, is that they think it’s about winning for one side. They feel the better they beat the other person up, the more they’ve won. The truth is that the best negotiators on the planet are making sure both sides are winning. They do this by being extremely creative, getting involved in terms, getting involved in timelines, or by finding ways to solve problems for the seller that may be outside of the real estate itself.
Making sure that the option for a seller to do a portion of seller financing is mentioned. Many new investors assume that full seller financing is the only option, but that eliminates many of the other creative financing option available to you. Maybe they can carry 10% or 20% of the note. That now allows you the buyer to come up on price, because you won’t have to bring a down-payment to your first position lender. I’ll discuss how to negotiate seller financing later in the, “Money” section of this book.
There’s a lot of different ways for you to make the deal better by simply being an “alchemist”, by finding the gold in the deal, by seeking it out for both parties. Regardless of whether you represent yourself or another investor, if you can become a master negotiator you’ll make both parties feel like their winning.
Got The Deal! Whats Next?
Once You’ve gotten the deal under agreement, once you’ve either had a listing sign or a purchase and sale sign, it’s time for you to either start work on the project or go market it. We will discuss how to find the right contractors later in the, “People” section of this book, but for now lets discuss how to market the property.
Make sure that you’re doing your highest and best, getting that property sold for your seller. It’s your responsibility, now that they have signed either the purchase and sale contract or the listing agreement, to go and get the property into the hands of the right buyer.
If you already have a buyer in mind, perfect! If you don’t then building a buyers list is going to be a big part of your marketing strategy. We’re going to talk about how to build a buyers list in a little bit.
When it comes to marketing a property you want to make sure that you’re putting it everywhere that investment buyers could be. Get it on Facebook, on Zillow, Trulia, and of course out to your buyers list. If you’re an agent and have a listing agreement, get an MSL asap, make sure it’s all over the place and then call your buyers, text your buyers, email your buyers, make sure everybody is getting the listing.
Going to the real estate investor associations, to the local meetups, and bringing that property sheet with you. Make sure you’re getting in the local Facebook groups, for that town and the investor groups. Another great website to promote your deals on is BiggerPockets which has that largest collection of real estate investors online. There is going to be somebody who wants to buy this deal if it is priced right. So make sure you’re marketing to everybody.
Listing A Property
This is probably the easiest thing you can do if you have your real estate license. So if you’re a wholesaler, and don’t have the option, you will notice that I strongly suggest getting licensed so you have this option.
It’s the next way to build up more income, because listing the property is something you can do more than 30% of the appointments you go on. Once you’ve met a seller, understand that at some point they will sell. Make sure they sell with you! Once you’ve taken the listing, put it online, and you’re more likely to sell it for far more than an investment offer and earn the commission.
When you take a listing you have 24 hours to get it uploaded into MLS. You should upload the maximum amount of pictures allowed. Fill in all pertinent information and write up a great description that will draw in real estate buyers. Schedule an open house each week and make sure it is advertised through your local MLS. Once you have marketed the property everywhere you can, sit back and answer your phone! It’s time to earn your commission.
Most agents are aiming between a 5% and a 6% commission on the sale price. This is the percentage of money you’re going to make at the close. If the house is for $200,000, you get 6%, you’re going to make $12,000 from the sale assuming you get both sides of the deal. It then gets split with your broker depending on your agreed upon split.
However it’s divided even if you are a newer agent at a 50% split it’s a very good source of income. Especially if you have your real estate license and you’re going on appointments that you can’t agree on a low enough price to buy anyway. Make sure your listing that property and helping the seller get top dollar.
How to Find Investor Buyers & Build A Solid Buyers List
You have heard the saying, “Cash is King”. That is even more true when it comes to real estate investing. This is why a real estate investor buyers list is so crucial. While it is true that there are several ways that a real estate investor can make profits, most of them involve selling a home for profit.
If you’re in the flipping business, your buyer could be an investor buyer or a retail buyer. Here we will discuss the importance of having and creating a buyers list to generate profits faster
Truthfully, cash buyers generally simplify any real estate transaction. Cash buyers lead to faster closing times, fewer headaches, and fewer complications. The reason that cash buyers are often easier to work with is that there is no loan approval process. This can eliminate several weeks or even months off of a closing timeline when buyers are not at the mercy of lenders and their sometimes “unreasonable” requirements. Investors who can find cash buyers ready to make an offer on properties stand to generate profits quickly.
Cash buyers can be found anywhere and are not found in any single demographic or industry. In other words, anyone with cash on hand could potentially be a cash buyer. Overall, if you know where to find cash buyers, you are setting yourself up for bigger (and faster) profits.
No matter how you are finding cash buyers, you must have a list of ready buyers within your reach. Overall, your holding costs will be significantly lower if you can find cash buyers to sell your property quickly. If you are wholesaling it will decrease the amount of extensions you have to request.
An effective buyer list is one that is comprehensive and inclusive. In other words, it includes both retail prospects as well as large and small investors. As a note, your buyers list does not have to include retail buyers with good credit and down payments if you don’t want it to.
A large majority of investors are buying for long term rental profits. As such, these types of investors may not be as aggressive in finding deals. In any event, the most successful strategy with selling property includes creating creative lease purchasing and financing options for those who are credit challenged.
Additionally, recognizing and understanding that other investors have their own goals and requirements which opens up additional opportunities when you start thinking outside the box. Let’s discuss some of the ways I have found that work when seeking to build your buyers list from scratch.
Newspaper ads are a great inexpensive way to find potential investors to be on your buyers list. The key is to run one ad consistently in the same section for several weeks. Savvy investors will run ads that include things like “Credit problems? “no down payment?” or something that communicates flexible financing options that are available on your deal.
Print advertising also includes things such as your business card and your small flyers which all work to solicit prospective buyers for your buyers list
Signs commonly referred to as “bandit signs” are those that you may have seen stuck in the ground in yards or on busy street corners. These signs typically say things like “I buy houses” or “no money down houses for sale.” These signs are not just a way to find property, but just as often will attract cash buyers.
Craigslist is another way to find individuals to be on your buyers list. Craigslist is similar to a classified but is free to use. Frequently people search on Craigslist using key phrases like “no money down homes.” You have the option of attracting phone calls from the ads you post on Craigslist and adding those contacts to your buyers list.
You can attract phone calls and add people to your real estate investor buyers list from Craigslist ads, but there’s another way to build your buyers list with Craigslist. You can go on the site yourself and search for people who are running ads that they want a home with low cash down, or they want a home with a low credit score. When you find them feel free to make the first contact.
The tools mentioned above focused on finding non-investor buyers for your property. However, you can also use these same tools to find other investors as well. In any event, finding other investors requires you to “brush shoulders” with them. You want to go where they gather.
This means going to investing clubs, networking events, or even playing golf at the locations where you know prominent real estate investors hang out every weekend. Just having a conversation with other investors to see who is buying for short-term or long-term rentals, is another way to add investors to your buyers list.
Your real estate investor buyers list is one of your most valuable tools you are going to have in your alchemist toolbox or maybe it’s a treasure chest. Either way, you shouldn’t neglect it. Focus on building it, maintaining it, and using your buyers list for all your available investment opportunities!
Emailing your buyers list can be fun because they like to hear all the new deals you have going on. It is also extremely effective for selling property that you have under agreement. You want to make sure that your buyers are constantly being informed on any deals you have going. Make sure you are giving them a lot of information, running the online calculators, running the CMA, and sending that information out in a clean and attractive format. The easier it is to understand the deal the more responses you will get.
Your emails should be clean and simple so any investor can quickly look at it and decide if they like the deal. Be sure to put the bullet points up top, making sure that the next part is infographics, and at the bottom include any further information about the situation with the seller that could make this deal more attractive. This is going to give a perfect package presentation for the large-scale marketing of this deal.
You may also want to have other agents and wholesalers on your buyers list who can distribute your deals to other investors. There are the two elements to making a very powerful email to the right people.
- Making sure that you’re email is attractive/informative
- Making sure it’s a quality list of buyers who are interested in buying property in your market.
Now that you have the tools to get the maximum attention, lets discuss how to manage showing the property to prospective buyers.
Showing Property, Doing Open Houses.
Which one is better? Should I just book an appointment for everybody who wants to see the property randomly? Or should I do an open house and send all appointments to that one open house? There are a lot of different ways to schedule showings, and I lean on the side of efficiency when I make this suggestion. I am strongly of the mind that you should be sending everybody to one open house per week.
There are many reasons to push all your investors to see the property at the same time. Your time is already a good enough reason, but remember if there are tenants involved or the owner lives at the property it puts less strain on the relationship if they only have to be prepared once a week for less than an hour. Another reason is that there is an increased pressure in the investors mind when they see their competition interested. This can increase the speed of offers and increase the overall price offered.
I suggest that you do a 30-minute open house and then point all of your appointments to that 30-minute open house. In the beginning of your business, if that’s your only property, you may feel that it’s no big deal to book a bunch of appointments all over the week, but I want to warn against this. It puts a lot of undue pressure on the seller, or the tenants, when you’re bringing people into their house five, six, seven times a week. It also takes away from the impression of high interest is on the property.
When the homeowner only has to clean up the property once per week and they know they only have to leave the house for and hour, you’ll find they’re far more reasonable and they’re much easier to work with. As far as your schedule goes, showing the property once per week can really help you control your schedule so you can get back to doing your lead generation activities and find the next deal! So, make sure you set this standard of doing open houses and group showings early in your business development strategy.
In the end, the greatest marketing campaigns are only as valuable as the execution in the appointment and the more appointments booked the more opportunities you will have to close your next deal.
Whether it comes to booking appointments or negotiating a deal there will be a learning curve and you will get better with practice. Remember, “Whether you think you can or you think you can’t, Either way you are right.”