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Updated over 16 years ago, 05/30/2008
Who's That Guy Stealing All Your Deals?? :)
Have you ever wondered who's getting all of the mind blowingly profitable Real Estate deals in your community? Well I'm "That Guy"..Talking to owners in distress has really become my thing because I follow a system that none of my competition has been able to recognize.
It's quite simple actually, and I want to show you a few of my tactics so you too can be the one in town that grabs deals that all of the local investors are grabbing for.
Allow me to set the stage for you. Mrs. Johnson, a motivated seller with only 30 days until her auction, has called every single investor in town. If you had a bandit sign or an ad in the paper, you got a call from her. Every investor in town has also run the numbers on the deal to find that it's a whopper. The kind of deal that would let them put their wholesaling business on cruise control for a few months. You've received that very same call.
What do you do?
First off, "Other Investors" are irrelevant because you're going to be the one that closes the deal. For me, I like to be the first one to the house....I try to find out if she's meeting with other investors and what time, then I make sure that I'm scheduled in to be first....
A few things I would do:
1. Do research on the property and make sure you know the neighborhood comps. Print up the lowest comps that you can find...bring them with you. Print up the property appraisor's sheet on the property that you are visiting. You will look prepared and efficient.
2. Build rapport before you start even talking about the house.
3. Emphasize how you get things done quickly and easily. You're the best home buyer in your area. Let her know that she can have confidence that you'll handle everything right away and correctly. Your offer is really the best deal for her..she may get slightly higher, but they're not experts like you are.
4. If she balks at your offer, be sure to whip out those old comps and say..."I know Ms. Seller...I thought that I could pay more than that too...I really wish I could...EXCEPT...whoever bought 101 Maple Street really screwed it up for all of us. He paid so little that he brought down everyone's property value. John Doe at 202 Maple Street did the same thing..." You get the idea..make sure that you're on her team working against a greater evil. In this case the NEIGHBORS that forced you to offer such a low price....:)
5. Don't leave her with a copy of your contract EVER!!! If you leave her with an unsigned contract, she'll shop that bad boy around town so fast and every other shark will have a copy of your contract. You'll be used for leverage and you don't want that. You want to be the guy that gets the deal. I personally don't leave without a signed contract....but if you're not as ballsy as I am, you could always tell her to speak with the others and give her the courtesy of a call before she signs with anyone.
6. Make sure that you put "AND/OR Assigns" on your contract so that you can flip that contract to another investor.
Now go close that deal!
I keep telling everyone that I work with, that sales skills/deal closing skills are the most important thing an investor needs to learn. Anyone can do marketing and put a sign in the ground or mail a letter, but only the real pros can go into a sellers house and close 9 out of 10 deals.
My skills are at the top of my game right now and I never worry about my competition because of this.
Rich, you seem like a very worthy adversary, because I know neither of us would leave the sellers house without a signed contract or until they kicked us out.
RIDICULOUS! I have gotten dozens of great deals in my community and I know a lot of other successful investors that have gotten great deals here - so your claim that you are getting all of the mind blowing deals in my community (or the community of any other investor on this forum) is just ridiculous spam!
About 10 minutes ago, I received a call from an elderly woman who has a 2br, 1 ba house that she inherited. She has her own house and doesn't want to own this one, pay the taxes on it, mow the grass, worry about it being vandalized, etc. Her exact words were "I just want to be rid of it". This is the second time she's called me. The first time, I told her that I wasn't buying anything and just wasn't interested. I still am not looking for deals, but just for kicks I asked her what she needed for the house. She said she would really like $22,000, but then after a few seconds of silence (I just kept my mouth shut), she said that she would take $20,000.
If the property is in good condition, which she said it is, it is worth $52,000. I made an appointment to meet her at 10am tomorrow morning. Here's what I'm going to do. I'm going to spend 10-15 minutes looking at the property. I'm not trying to gain her confidence or become her friend, or play any other silly guru games. If I want it, I'll tell her that I will take it (for $20,000 CASH) and have her sign a contract right there on the spot. I'm not going to beat her up over the price, when I'm getting the property at 38% of market value. I'm not going to act "ballsy" as you suggested, which is ridiculous. I'm not going to refuse to leave if she doesn't want to sell. I'll just say "thanks, and give me a call if you change your mind". I'm certainly not strong-arming a little old lady to get her house!!! I will also leave an unsigned contract with her if she wants to take it to her lawyer. In fact, if she wants to do that, I'll probably just talk her into paying for the closing at her attorney's office.
All that silly guru nonsense, gimmicks, tricks, and other hogwash is not needed to get great deals. How about trying honesty and integrity - I find that works just fine!
Mike
Rich, Jason and Mike,
What methods are you using to find the people who need to sell. Bandit signs, websites, letters all of the above. For someone relatively new without a lot of money for marketing, what do you all recommend? (I am looking to buy 1-2 houses per year.
Bryan
#3 Off Topic Contributor
- Attorney
- Viera, FL
Bryan,
PA has some great cashflow. Start by finding what REOs are listed. What city are you in?
Tim
Originally posted by "MikeOH":
Mike
You hit the spot exactly. What matters at the end of the day is that everyone is happy. I know all about the competition here and I don't really care if the other guy gets the house; yeah I'll be slightly disappointed but the deals keep coming. They get theirs and I get mine. Certain players do consistently obtain more properties than others, partly due to marketing, experience level, or salesmanship. The salesmanship portion of REI is about honesty; you sell your service and exchange honest justifications of why you are making this offer. Giving an owner a few of the lowest comps in an area is COMPLETELY fake and dishonest. You know as well as I that those numbers are meaningless when evaluating any single property.
Also, I would definately leave a copy of my contract. I also had a client that wanted to take a copy to their attorney. If I didn't allow this to happen then I wouldn't have made the 10K wholesaling fee a few weeks later. What's in your contract that worries you?
As with the negotiations discussed earlier, no guru gimmicks are needed here. I have never owned a bandit sign; never sent out a letter to sellers; never done any of the fancy guru marketing. My main source of deals is word of mouth. That's how I got the house that I described in my post above for 38% of market value. The desperate seller called me after getting my name from a person she went to church with. That person at church knew that I bought properties. Just that simple.
So, my suggestion is to get out of the house and tell everyone you know and meet that you buy houses. Tell all your family members to spread the word. Tell all your friends to spread the word. Talk to people while you're in line at Lowes. Tell EVERYONE! Get the word out.
Also, join your local REIA and make friends with the SUCCESSFUL investors. You would be amazed at how many deals are passed among the successful investors (often for free). For example, I might find a property that can be bought at a big discount, but I am not buying right now. I'll call a couple of my friends at the REIA and tell them about it. They do the same thing and I've gotten many calls from REIA members who knew about a desperate seller.
You might want to put a very small classified ad in the newspaper. That ad alone should be good for 2-3 deals per year. Keep it short and simple and RUN THE AD CONTINUOUSLY (very important). The ad I ran said:
Facing Foreclosure? Need Cash Quickly? We Buy Houses xxx-xxxx
Finally, as Tim said, try to find a Realtor who is willing to really work hard finding you properties at a discount. Then be sure to compensate them properly.
Good Luck,
Mike
I like Mike's advice. Tell everyone you know, hand out business cards, talk to a realtor who understand what your looking for and will work with you, etc. If you make it known your an investor things will come back to you.
For example. . .
A friend of mine here in town found a deal recently where they had a house that needed work. They wanted to sell it but didn't want to put work into it to get it ready. A friend of theirs passed along one of my friend's business cards. He looked at the property and made a deal with them and bought the house before it even had a chance to make it on the market.
The best ways to find deals are:
1. bandit signs
2. letters
3. door knocking
4. networking like crazy (everyone should know that you are the "subject-to" guy, or the "lease option" guy. Pick your niche and get rich.
The guy who started this thread is trying to drive traffic to his website. I seen him pull the same stunt on another REI website.
Yeah if thats not a guru's sales pitch I don't know what is
Originally posted by "Primo_Coach":
1. bandit signs
2. letters
3. door knocking
4. networking like crazy (everyone should know that you are the "subject-to" guy, or the "lease option" guy. Pick your niche and get rich.
Now we know what steps the xxxx takes to mislead.
But don't look at this as bad think. Because if you are honest, and not misleading then the seller will figure out who to deal with.
P.s. "None of you guys mentioned Court Auction, and Banked Owned. Are they not as good as the above ones."
Shah,
There are a bunch of ways to find deals. I don't agree with much of anything that Primo said in his post about the "best" ways to find deals and I don't use Bandit Signs, letters, or door knocking. In addition, I don't have a niche method of buying - I will buy using whatever method is most advantageous. However, all of the ways Primo mentioned are valid methods of getting deals. Likewise, court auctions and REOs are also good ways to find deals (as you mentioned), although court auctions can be a little tricky for beginning investors.
Personally, I get most of my deals through personal contacts. I've also gotten a lot of deals through my REIA (hearing about desperate landlords).
Good Luck,
Mike
Mike makes a good point that there are many different ways to find deals. I like to keep it simple. I know a lot of folks get deals and make money on the internet but I am not tech savvy and have never tried it out.
I don't like auctions and bank properties because you have to get a loan or private money. I always try to deal with the homeowner and do a subject-to or lease option.
The most important thing is that you are MAKING MONEY, however you do your marketing and whatever method you are using to buy and sell.