Cold Calling - Driving for Dollars Tips?

Question

I am new to investing, I have been driving for dollars and putting together my own list of properties to go after in the areas I want to invest in.  I have been calling these property owners and I feel like my call is weak.  I want to know if somebody could give me some tips - I am thinking I am going about this totally the wrong way.

This is usually how the calls go

Owner "Hello"

Me "Hello (name)"

Owner "Yes can I help you" "or what is this about"

Me "I am a local investor in the area and I saw your property, I wanted to know if you were thinking of selling it?" or i say "would you consider an all cash offer"

Owner "no"

Any advice/tips would be GREATLY appreciated!

James C. · Answer

Isaac, Before we get started, pure cold calling is probably a 100 to 1 ratio or so. 100 calls gets you an appointment. Next, congrats for DFD and Calling, at least you are doing something. Congrats #2 for figuring you are not doing it the best way and Congrats #3 for recognizing you need help. Your goal, and only goal when calling is getting to see the property inside. Your script should be set up for getting an appointment. You can't close a deal over the phone when you have no rapport. You need to discover what the seller wants, and that means having a conversation. I find flow charting is a good way to figure out your path... if you are cold calling you might want to open with: "Hi, Is this <>?" You get either a yes or no, either way, you could go to (or ask for their name, either way, use it liberally): "<> Have I caught you at a bad time?" Yes or no, if yes, then "sorry to disturb you, can I call you back in an hour, or would tomorrow night at 6pm be better?" "Thank you <>, I'll be in touch <> if no, then go to "I was wondering if you could help me, I'm looking for <

Garrett Hogan · Answer

Issac,

That's great that you have taken action and started cold calling. In any cold call situation, I would not recommend asking them right off the bat if they want an all-cash offer for their house. That immediately puts the conversation on edge and the seller on guard. If somebody feels like you're going to low ball them, then their guard will be up and they wont be responsive.

Instead, I would encourage you to take a softer approach and try to build a little bit of rapport with the sellers to warm them up a bit. " Hi Mr. Seller, I am looking to buy a house in your neighborhood. I absolutely love the park that's at the end of the street, I take my daughter there all the time, I'm curious about your plans for the property and If you've ever considered selling"

There are a number of great books on sales techniques. Id recommend reading a few of those to really hone your skills.

James C. · Answer

Isaac,

If that's the game being played, and you don't want to play that game, change the game.

There are only two possibilities

1) they really are u/c (signed, written, contact) for 1.3M or they aren't  (anything else).

If it's #1, have them whip out the contract and you can read through it to see what it is. Check dates, weasel clauses,  everything in it so you get a picture of what is going on with the sale. Quiz the seller about anything whose date has passed (inspections, finance contingency, deposits going hard, etc.), and if those have been released in writing. Don't bash the opposition,  just simply ask questions  (politely), that will sow enough doubt. What you are looking for are contract issues that the seller can use to their advantage to close the deal.  You can then suggest that they should call an attorney  (and you happen to have a list of capable attorneys in your brag book that will do a free 1/2 hour consultation) to talk about specific performance and helping them get their money.  This is just one approach of many possible,  all of which center around helping the seller.

Why would you take the time to do this?  Because it does a few things for you. It exposes you to different contracts and ways of writing them. It forces you to overcome objections by making you get information and then using that information to overcome the objections.  It gives you a window into the other guys process. It builds credibility with the seller. It does a whole lot of other things as well. Maybe, the seller wants to, or can be enticed to place that cash with you, so they earn interest on it. That could be better than a sale. You get the idea.

Ultimately you want to set yourself  up as the credible go to person that can get the deal done. Write a backup offer if you can (you'll have to learn how). Stay in touch with the seller. If the first deal falls through, or the seller gets irritated, or the price drops below yours, then you want to be the next call the seller makes. If it closes, stay in touch and put them on your list as a potential investor (watch the rules!).

The brag book is a 3 ring binder of references, things about you, deals you've done, charity work etc. it's designed to showcase that you are a knowledgeable, trustworthy, all around good doobie and YOU ARE DA MAN for the job. It also serves as an excuse for the second visit.

There are advantages and disadvantages to both the one and two visit approaches. One visit advantages: Quick, easy, in-and out, have your answer in one shot. Disadvantages: Not enough time to build rapport, not enough time to adjust ideas, comps, or approach if you find something different than you anticipated. Two Stop advantages: Ability to build rapport, ability for seller to call references, ability to leave brag book, ability to see property and get info before comping, time for strategy development. Disadvantages: Seller changes mind, another person scoops you between appointments 1&2, Seller won't set second appointment. The brag book helps with these. If a seller changes their minds, then they weren't a really viable candidate anyway.

The cold call primary is to get an appointment. The appointment is primarily to make an offer, if the property fits your criteria. If you don't get the appointment, or don't get the offer accepted, get something to make it a warm call next time. Things like permission to send emails, fliers, newsletters, to call again, to add them to some other value added thing you do. Whatever it is, make sure you DO IT! You never know when the seller will flip to wanting to sell, or refer you to someone who does. Stay in touch.

Part 2: If they aren't under contract, sign them up. If they balk because you are offering 1M and they have been told 1.3M, then pull the Cuba Gooding Jr. "Show me the money" card. Because everyone knows that Cash talks and the other stuff walks. Obviously, the other guy offering 1.3M is not trustworthy because he is unwilling to put the cash on the table and you are. Would they rather dream about doing something with 1.3M or actually be able to invest 1.0M and earn 8% (with you)? Figure out, with the seller, how long it would take to recoup the 300K difference, if the 300k doesn't exist (never), or if theoretically it did (3 years, 9 months). Suggest that they will probably wait that amount of time and longer for the other guy.

Despite all this, you might still end up without a contract, just make sure you get a chance to be the water on the sellers stone... you will most likely win.

Hope this helps.

Good Luck!

Jim

Isaac El · Answer

@James C.

Hi James - wanted to give you an update, been using your approach and getting MUCH better results, I still need to work on it.  Greatly appreciate the advice.

Isaac El · Answer

@Hua Qiu

Hi Rex - you are right, and thank you so much for the motivation.

James C. · Answer

Isaac,

Glad things are going better!

Going from the appointment to the offer is fairly easy.  You can do it one of two ways, one is to do all the work up front, without seeing the property and coming up with comparables and a number, the second is to do a walk through of the property and then come up with your comparables, and a number. The second requires an additional appointment, so it can be a potential source of loosing a deal. If you leave a "brag book", that showcases your benefits, process etc. then you have to come back and speak with the seller.

In general, you should do all your due diligence (comparables, estimated repair costs, numbers, etc. ) before presenting to the seller. Your job at that point is to get them to agree that you know what you are talking about. Get them to agree on small things, keep them saying yes, and then lead them right into signing up with you. If they balk, take them right back through the cycle. Remember your ABCs... Always Be Closing. Ask for the deal. This takes a bit of practice. You can practice with your mentor, spouse S.O., friend. As above, have them be mean and nasty, you'll be better prepared for those tough sellers. It's a growing process, but the more you do it, the easier it gets, and the better you become.

Good Luck!

Jim

Isaac El · Answer

@James C.

Thanks James, going to put the plan into action and will report back on results, really appreciate the pointers.

-Isaac

James C. · Answer

Isaac,

The high level order of events;

Cold call, set appointment #1 (walk through), go to walk through  (leave brag book, take notes, get as much information from the seller as possible, get photos/videos of proprty, set appointment #2), go back do due diligence (comparables, title search, presentation etc.), return for appointment #2 (present findings, overcome objections, sign deal up).

When I say sign the deal up, I mean put it under contract right then and there. There is a standard NY contract for the purchase and sale of Real Estate that you can either fill out and present on paper, or better have them sign electronically. You set this up between appointments 1& 2 as part of your due diligence. You then present this as part of your presentation as a closing technique.

Good Luck!

Jim

Isaac El · Answer

@James C.

also in part 2 - when you say put the money on the table, is the best way to do that "give me your email address and I want to send you my offer in writing" and then I email them a professional email offering them $1m? or do I take it a step further and tell my attorney to email them with the offer for $1m, copying me on the email to the owner?

I agree with you that the money talks.

Cold Calling - Driving for Dollars Tips?

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