All Forum Posts by: William Johnson

One of the many calls that I had today.  I am using Michael Quarles advice about getting the seller to give me their minimum.  I have had success and failure with this.  Here is the part of a phone call that I had today where I failed and, the point where I failed with this one is where I fail on the other ones and end up offering.

Me: Taking into consideration that I could basically close on the day of your choice how much would you accept as the minimum price for your building

Seller: Well listen I had it sold for 520000 last year so how much would that be minus the 4 percent commission...500000

Me: So the minimum price that you would be willing to take is 500000

Seller: There you go that is what it would be, if you are going to tell me that you will propose me something than it is up to me to accept it or refuse it.

Me: Well you just told me that your minimum is 500000 so it would be pointless for me to offer anything less than that because that is the minimum you would accept.

Seller:  Listen, you have not seen it yet, you don't know where it is.  If you are serious and the funds are there then make me an offer.

Me: How much is the mortgage on the property?

Seller: There is no mortgage it has been years since I had a mortgage.

Seller:  blahblahblahblah

Me: I am getting the impression you are more negotiable than 500000, how much are you willing to take as a minimum.

Seller:  lol listen William go see the building, if you are interested I think you know the address

Me: I have all of the information for your building but, before I take the time to make an appt to go see a property I have to know that the owner is within my range.

Seller: What is your range

Me: I have to know what your true minimum price is and then I can tell you if it is in my range.

Seller: Ah damn, what is my minimum...if I tell you my minimum is half a million you are going to say well I am not interested.

Me: That's right

Seller: What is your maximum?

Me: Well I mean (sigh) I have a maximum and I understand that you want to know it.

Seller: Tell me your maximum and I will tell you whether we can come to an agreement or not.

Me: (Giving up the battle) Alright well uh I will just pull up my calculations to give you a precise number

Seller: Sure

Me: Okay so my maximum will be below 400

Seller: Below what!

Me: Below 400

Seller: No forget about it I didn't say that I was willing to give it away.

Me: I understand

Seller: Listen this is not costing me anything and it brings me in 10000 clean each year.

Me: I understand, thanks for the call and give me a call if you are interested in selling fast with no hassle.  For the time being I have absolutely no interest in buying it for the price that you are asking.

Seller: No problem take care

Me: Byebye

My first thoughts on this interaction is that it was very weak on my part to give in and give him my maximum rather than he give me his minimum.

What does BP think about this?

I have been contacted directly by sellers who were listing their houses with agents who I had called about their homes on 5 separate occasions in the last 6 months.  Each time the difference between what the sellers were willing to accept for their homes versus what the agents had told me they were willing to accept were very different.  

This has caused me to reach the following conclusions:

1. The agents in question talk out of their *** and cannot be trusted to represent their clients best interests.

2. Use this information as a way of evaluating the truth about what agents will try to tell me so that I will not present a written offer.  

3. How many times will agents actually present an offer from a potential buyer who makes a low offer in a neutral fashion...I venture to guess that those times are few and far between.  

The conclusion for me is that agents will generally as a rule not work or co-operate with me despite the fact that I can close on my offers (although I will wholesale for as much as I can as first exit strategy).  I will cut them out of the equation by reaching sellers before they do as much as possible to simplify my life and not deal with their narrow minded view of real estate.  Not all agents are like this but IMHO they are the exception to the rule (when I become an agent I will be the exception to the rule).

 I wouldn't look upon most of the licensed real estate brokers who answered your post as un-supportive.  They gave a lot of their time and answered with honesty and with a lot of well thought out logic.  Those answers are, believe it or not more important than the positive encouragement that you will receive.  Real estate is an extremely tough industry that flushes out many more people than it keeps.  One of the first ways which is illustrated throughout this thread is the harsh contrast between the idealistic view of real estate that we imagine (and which is marketed heavily by unscrupulous gurus) and the reality of real estate.

The first hurdle to get over on the path to success is to be able to push through and to oftentimes be your own (and only) cheerleader and to be okay with it.

@Kathleen Miles As long as you make sure that there is no legal language barring you from assigning the contract for cash, and you make sure that you do proper, exhaustive due diligence than you have nothing to worry about.  If you negotiate hard, honestly and often than you will eventually land a great deal.  Wholesaling is not un-licensed real estate brokering as some have suggested on this thread.  You are acting as the negotiator for whichever company/person that you are going to assign the contract to.  There is a very fine but clear difference between a wholesaler and a buyers agent.  You opened up a can of worms by asking all the vanilla investors on Bigger Pockets to come and deflate your balloon but understand that there is a market for what you want to do and there are people who do it successfully,

Just think of yourself as an acquisition manager but, instead of for one company you are doing it for numerous companies. 

 Thank you very much.  I have listened to both of your podcast and followed your filtering questions religiously (along with my best attempts at positive and negative reinforcement with my voice).  I never know how to respond when they ask me how much I am willing to offer after I tell them that they don't qualify.  Right now I tell them that is immaterial considering how far is their minimum price is from my requirements. 

@Jeff G. Thank you for the detailed response.  One thing I am getting from the responses to this post is that my process is very important and that wholesaling requires more strategy than I realized.  How much does your mailing system cost you per month?

 @Michael Quarles Thanks for the response.

What is your followup system?

@Chip F. Thanks for the suggestion and I have listened to Michael Quarles podcast and I was following that advice and I still do with one change, if their lowest price is way higher than what I am willing to pay I have decided that I am still going to offer my amount anyways.  I think I have a better chance of at least trying to offer something (which takes another minute or two) than just letting it go and assuming that they will not accept anything lower.  It is kind of a back and forth debate as I do here a lot of people who say that they just get the seller to give them their lowest price and walk away if it is too high and my previous mentor would always offer an amount for each one.

@Chaz Reid Thanks man, excellent insight and just the kick in the pants that I needed.  I am excited about the concept of getting bored with this.  I am slowly believing in myself and getting fed up with not believing in myself, especially when success is the truly logical conclusion to my actions consistently and performed at a high enough volume.  Not succeeding makes no sense with my current actions being continued and ramped up.

Thanks a lot for the thorough responses.  Just to give you guys an idea I have made close to three hundred offers in the last 6 months. I am trying to stay in the grind but your responses are going to help me grind more intelligently. Any other suggestions?