Posted by Bill K. (AZ) on March 31, 2000 at 18:16:45:
Dan,
I love the LeGrand quote you mentioned. The story goes like this…
After Ron did his first deal, he couldn’t believe how easy it was to make a few thousand dollars, and he thought it was a fluke. So, he did it again. Seeing that he could make more money in real estate than he could ever make working for someone else, he met with his boss, and said, “I’m upping MY income. Up YOURS!”
That’s one of my favorites!
Bill K. (AZ)
Pitching creative deals to motivated sellers - Posted by Ben (FL)
Posted by Ben (FL) on March 31, 2000 at 10:10:05:
It seems that 99% of the time, as I’m on the phone asking someone who’s newspaper add indicated a high level of motivation (Reduced, seller transferred, as is, make offer, etc.) about their house, I get an indication that they will be flexible, then I get up to the point where I ask them if they would consider owner financing or a Lease Option, and I lose them. I recognize that maybe they just were not motivated enough, but I also think most of it is the old “If I don’t understand, the answer is no,” problem. I’d very much appreciate suggestions on how to bring the topic up to sellers without turning them off.
One More Thing - Posted by B.L.Renfrow
Posted by B.L.Renfrow on March 31, 2000 at 13:44:23:
No question, the issue of where to find the time is ongoing. I have no wife, but I do have kids and a job, so I feel your pain too!
I just wanted to point out that what we are talking about, essentially, is salesmanship skills…you are selling yourself and your deal, no matter what it is. Some people can just naturally sell milk to a cow, get the cow to pay retail, and everybody walks away happy. Not me. Before I got into RE, my only sales experience was on e-Bay! I never even sold cookies as a kid! It does come naturally to some folks, but I don’t consider myself much of a salesman. I have listened to lots of tapes, and read books, by sales gurus. Unfortunately, I think a lot of that stuff comes across as “hard selling” and turns people off. Plus, it sounds ridiculous coming from me. But, I HAVE picked up plenty of useful tidbits which have given me new insight as to what the sellers may be thinking and how to always be thinking ahead and prepared to deal with their objections, and most importantly, how to ask for the close…because if you don’t ask, they’re hardly ever going to offer.
The sales skills are something I am working to improve continually…I am sure I’ve lost several deals simply because of my inability to “sell” my proposal effectively. No matter what kind of deal you’re presenting, it ultimately comes down to selling…whether you’re sitting across from a seller or a buyer, you have something to sell.
There are plenty of posts in the archives about salesmanship. Authors like Tom Hopkins, Zig Ziglar, and a guy with a British accent whose name escapes me right now are ones I have found especially useful. Your local library probably has a lot of that stuff, as much of the material has changed little over the years.
Brian (NY)
Re: Pitching creative deals to motivated sellers - Posted by CurtNY
Posted by CurtNY on March 31, 2000 at 12:15:23:
Ben,
REI or say hi to your wife? When I say hi to my wife she says " why aren’t you out there making us millions?" just kidding, I’m a part timer myself and have had the same problems. Great question, Brian thanks for the great response. Good Luck.
CurtNY
The Problem Is… - Posted by B.L.Renfrow
Posted by B.L.Renfrow on March 31, 2000 at 11:02:02:
…you are an unknown stranger out of the blue suggesting something with which the seller is unfamiliar OVER THE PHONE…in which case, the answer 99.87% of the time will be “NO” regardless of the seller’s level of motivation. You are absolutely correct that the confused person will always answer “no.”
The key is to use the telephone to figure out the liklihood a deal even exists. Things like where the property is located, repairs needed, how much is owed, what is the existing financing, and most importantly, why are they selling? Now usually you won’t get the “real” answer if you just come out and ask. So, you have to work it into the conversation. Something like, “So, Ms. Seller, are you buying another house, or are you leaving the area?” will usually get you a much more accurate answer than, “So why are you selling?”
Then, if you determine a deal might exist, your next step is to get yourself at the seller’s kitchen table.
Of course, you tour the property, make small talk, look at the water heater, all the while discretely asking questions and listening carefully to the answers, for clues about the seller’s motivation and what the seller NEEDS - not what they WANT. For example, most of them will WANT all cash. Many of them don’t NEED all cash, however. They might NEED debt relief, money to buy a car, to leave the area, etc.
Then, once you are sitting across from the seller at their kitchen table, you are in a better position to structure an offer which will meet their needs. For instance, if they need $20,000 next week for Grandma’s brain surgery, a lease-option proposal will be a waste of everyone’s time.
If you determine, for instance, that a lease option might solve their problem, you can approach it something like this:
You: “Ms. Seller, I am very interested in buying your house. However, as an investor, if I put my cash into every deal, it wouldn’t be long before I’d be out of cash. Does that make sense?”
Seller: “Yes, go on…”
You: “If I were able to give you your asking price, but we set it up so I will cover all your expenses, including your mortgage payment, for now, then pay you off down the road, would that be something that would work for you?”
Seller: “Welll…maybe. I’m not sure.”
You: “What I would like to do is set up a long-term rental agreement where I could buy the property a few years down the road. However, you would have none of the typical landlord problems, because I will guarantee your payments, I will maintain the house and I will deal with any problems that come up. All you have to do is cash the checks every month. Does that sound OK?”
Seller: “YES! Where do I sign?”
Obviously, that’s a bit simplified, and there are a thousand different approaches you can use, but I hope this gives you a couple ideas.
Brian (NY)
British guy is Roger Dawson (nt) - Posted by Glenn-OH
Posted by Glenn-OH on March 31, 2000 at 19:43:39:
nt
Re: The Problem Is… - Posted by Ben (FL)
Posted by Ben (FL) on March 31, 2000 at 11:45:54:
Of course (the sound of my palm striking my forehead)!!! Thanks for your help.
Ben
Re: I absolutely agree - Posted by Stacy (AZ)
Posted by Stacy (AZ) on March 31, 2000 at 11:20:11:
Brian, I was going to post the same answer, but I couldn’t have said it better than you. I can empathize with Ben, even though I’ve been speaking with sellers on the phone for over two years. Because I have a full-time job, I find that occasionally when I speak to sellers on the phone, I try to take the “lazy” way out. My REI time is so limited that I’m reluctant to waste time looking at someone’s house unless I’m pretty sure there’s a deal. But, while trying to “over-sell” on the phone, the answer will invariably end up being “No”. I’ve lost at least two deals in the past month because I was too lazy to follow through and get in front of the seller.
Determine if there’s any motivation while on the phone, then get your butt over there.
Stacy
Re: I absolutely agree - Posted by Ben (FL)
Posted by Ben (FL) on March 31, 2000 at 11:49:28:
Stacy, that’s my problem, exactly, too, although I wouldn’t call it lazy. Sometimes I feel like it’s either REI, or say “hi” to my wife once in a while.
Thanks for your help.
Ben
Re: I absolutely agree - Posted by Stacy (AZ)
Posted by Stacy (AZ) on March 31, 2000 at 12:27:10:
I hear you, brother. REI on the side has to take away time from something else. My wife is very understanding, but I do my best to keep a balance.
Hey, let’s just quit our JOBs and go full-time. Today. Whadda ya say?
(smile)
Stacy
Go for it!!! - Posted by Mark-NC
Posted by Mark-NC on March 31, 2000 at 14:51:39:
Stacy,
Sometimes thats what it take’s is to make a decision and just do it( with a plan of course). I went full time after only doing one deal a little over 3 years ago. Talk about backing yourself into a corner…whew. I did it though and I had a very successful first year doing flips. I did have some advantage I was a self employed contractor for over 20 years in some very tough economic climates so I kind of new what it was like to scramble and make things happen it wasnt anything new to me.Your always looking for a job when you are a contractor no different than looking for a deal.
Now comes the wife and family thing. The problem is, I like doing this real estate stuff so much, I spend more time with it than I ever did as a contractor, so my wife actually see’s me less. Opps, so much for that theroy of spending more time with the family by making money in real estate. I gotta work on that.
Mark
I’m in… - Posted by Fran
Posted by Fran on March 31, 2000 at 13:24:23:
I’m in for quitting…where do I sign??
Fran
I’m going for it! Mid-April will mark the day… - Posted by DanM(OR)
Posted by DanM(OR) on March 31, 2000 at 17:08:47:
I say I’m upping my income, see you later. I think that is close to what Ron says.
I simply can not afford to keep the Corporate job any longer. I have to sink or swim to, because I am literally Just Over Broke.
I have to go for it as you describe or I’ll never get my REI going. It just doesn’t work for me to do 2 full-time jobs. I can’t put my whole heart into any one of them.
I may be contacting you Mark for some insight in the near future.
Dan Matejsek
P.S. Thanks for forwarding your files about your note deal system. I have a few questions that I’ll email you later.
Re: Go for it!!! - Posted by David Alexander
Posted by David Alexander on March 31, 2000 at 16:33:52:
There’s even a solution for that.
Get rid of the wife and Kids… 
Bad Joke.
Nope, the answer is SYSTEMS, so that you can be like me and spend way too much time on the computer, hehe, while the systems keep finding you deals and putting checks into your account.
David Alexander
Good post. Reminds me of Andy DuFresne(sp?), Shawshank Redemption. - Posted by Brian Mac
Posted by Brian Mac on March 31, 2000 at 18:29:07:
“Time to get busy livin’ or get busy dyin’.” Go for it. Hopefully I’ll be right behind you.
Brian Mac