OfflineI believe there is one very magic ingredient that can help you to get the SELLER to work with you more often then not.
I was asked by someone: "how do you go about getting the SELLER finance SOME or ALL of the property?"
Well....there are NO certainties, but you sure can help the process along with something simple....EDUCATION. For YOU certainly, but in this case...THE SELLER may need some.
You need to be honest...Speaking to him as you would about anything to a "friend" of yours...you tell him what the qualifications are for a property to work for INVESTORS in this market.
NEVER say that you are a NEW INVESTOR.
Say that you are working with a group of OTHER Investors, and that sometimes YOU buy a property, or you pass it on to them. It makes it sound as if you are working from a Capital Base that is substantial, and filled with experience. These "OTHER" investors will be key in your teaching process.
You want them to believe that you are speaking from a position of Knowledge and Experience, and that the Information that you are about to give is not only Relevant to the property, but Accurate.
3rd person experience takes YOU out of the picture. (KEY).... You are speaking of what these "OTHER" investors are looking for. (those vultures) ya know ...the other guys.
By speaking as if YOU were an outsider to the process you take away some of the Defensiveness that would normally be present that inhibits the acceptance of NEW information. You are a NEW friend, just chatting about the market etc....
People like there houses....they don't want to believe that it may only be worth "X" today instead of yesterdays "Y"
Remember YOU are in charge here...NO ONE ELSE wants this guys house or he wouldn't be flexible, and you need to find out not only if he IS, but if you can MAKE HIM that way.
You need to explain the market to him.
Tell him about the need for LTV ratios that fit for HARD MONEY lending as a prerequisite for an INVESTOR purchase in THIS market.
The seller needs to Understand and Accept the idea that these are ratios that Investors are looking for to make a sale.
NOW you can change gears.
You need to KNOW already what the house is worth...comps.....AND figure out your MAX price BEFORE you get there.
You are coming to the table ARMED to the TEETH with information and an Offer that will make YOU money...not necessarily the seller happy.
The whole while that you are explaining The Market, LTV ratios, and what INVESTORS are paying for houses....you are keeping YOURSELF on HIS side as if you are only the messenger ...there looking at the house giving an Honest assessment of how this house "could" actually be sold given the current market cycle position.
THIS is "posturing" yourself as if it isn't necessarily YOU that will be buying HIS home.....it's one of those OTHER guys that you work with that have set THESE buying practices up....In other words....YOU ARE NOT TO BLAME.
It's those Professional Investors that you "work with" that have these Parameters and guidlines whereby a house becomes "buyable".
You are not ONLY building Rapport....you are being a friendly "teacher"....helping the Seller to understand why he NEEDS to consider the conditions that you have just layed out if HE desires to move the house.
THIS is EXACTLY where you want to bring the Seller. To a place of Understanding. A place where he drops his mental BLOCK that says "my house is worth more" Once they admit that the market IS INDEED as YOU say....you can then be creative and explain how you might make this work for BOTH of you.
Explain how you work with HML's that have LTV ratios of up to 60% for aquisition of funds. Then because you already worked up the Numbers before you came.......you will already KNOW what you have to work with.
Taking into account the Rents in the area you may find that you don't want a High interest HML loan above a certain amount. In that case explain that if the Seller can "carry" a certain amount for a year or so that HML funds could actually be aquired at a rate that would allow YOU and the INVESTORS to actually afford to rent the property out. "If we can do something like this...MR SELLER....we could make this happen quickly"
When you offer the price verbally....say something like...."Now that you understand the market a bit, I can tell you that an investor would pay...hmmm no more than X amount with the market the way it is...."
If it comes down to it ... you can ask the seller if he can carry a portion of the loan for a year with No payments or interest. If he says NO....add interest, but no payments. etc....until you get some agreement.
I think EDUCATION is the key to working with FSBO sellers. MOST have NO understanding of the market factors NOR the methods by which we aquire the funds to purchase these homes.
EDUCATION + RAPPORT = The best conditions for a purchase.
Prepare the Seller to accept your offer. It makes it easier to swallow.
TEACH THEM....AND THEY WILL SELL.....LOL
Sam
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
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Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
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Don't let EXCUSES be the nails that keep you INSIDE the box.
Hey Northwest,
Thanks for the great post! I'm still getting my spiel down when I talk to sellers. When I first talked to them, I told them I was a new investor. Big mistake. Now I always say I have investor buddies. I like the way you are using your investor buddies to set the stage for the market and the offer. I'm going to try that.
KimmyJ
Hello again Sam,
You are relatively new to this site.
Where does all of your experience, knowledge and confidence come from?
Thanks for your help and support so far!
Truly, means the world to me!
Angela
I think it's mostly the little Sales Experience that I have to begin with. The other would be Tact. I have always been good at trying to help others to understand my point of view.....The 3rd party aspect lifts the burden off my back of giving the "bad news"...I think it really allows for the acceptance of the message. I hate to mention it, but I was in Amway years ago, and we learned how to FORM people....That stands for : Friendship, Occupation, Recreation, and Message.
The first three F.O.R. are the Rapport building steps...talking about occupations, recreational activities...ie....forming a friendship....then Segwaying into the Message which is how we can make this sale happen.
Sam
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
------------------------------------------------------------------------------
Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
I've learned a lot from this thread.
I like to connect to people in any situation. Of course, I always feel like I have a genuine interest and concern for everyone too. I guess THAT could work for or against me, but I appreciate you showing how to combine it with the education part.
Thanks again,
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
I don't know much, but what I feel strongly about I will share....I hope we can all enjoy the success that Dean has shown IS possible.
Sam
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
------------------------------------------------------------------------------
Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
I luv this post !!! It has given more insight into our dealing with owners, and the way we educate them. REALLY GREAT POST !!
Thanks Grandpa.......say hi to grandma.....hope all is well...Go For it.
Sam
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
------------------------------------------------------------------------------
Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
I like this post a lot. It gives me a better understanding when dealing with FSBO! I been having a little trouble in this area. I wheel them in but the line always snaps. This was very helpful. THANKS!
"The entrepreneur always searches for change, responds to it, and exploits it as an opportunity." — Peter F. Drucker
I learned that from experience. On my second deal, I built rapport and taught the seller a couple things about tax strategies and it went great from there! That was the first deal I did myself without assistance from a Realtor or anyone for that matter... LOL! But my advice is to treat people the way you would want to be treated, with respect and kindness. Just like Sam said, that's the key.
God bless,
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Not that I disagree with your approach, it seems to be working for you and i am glad that it is. But going back to Dean's tapes on TALD he always says be honest with the seller. I don't see any harm in telling the seller that you are new to the investing game. I have talked with some owners and sellers and some have indicated that they feel like they are being intimidated when someone brings up the fact that they are with a group of investors. Hey, take it for what it is worth, we are all here to help each other. what are your thoughts?? I am always willing to learn and learn....Jan
I am in no way saying to be dishonest, rather that you should choose to speak ONLY of relavant issues. If you feel in someway that it will make the seller feel more comfortable...by all means reveal your status. It is indeed a Field Decision that you will make based on the specific situation and seller. Not ALL sellers will be impressed by your "lack" of experience. rather they ask themselves "does this person even know what they are talking about?" You may find some "professional" types will feel superior to a Newbie investor, and why would they listen to you. It is for certain a Card that must be played by you when the time is right, BUT only if necessary.
My Opinion
Sam
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
------------------------------------------------------------------------------
Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
I would NEVER reveal I was a newbie to anyone I was doing a deal with. It gives you credibility if you act like you know what you're doing, even if you don't. Think about it would YOU want to do business with someone who had NO clue what they were doing? I certainly wouldn't especially when it comes to making thousands of dollars. Would you put your business in the hands of an inexperienced partner or manager? I hope not! If I'm ever asked a question that I don't know by someone I'm doing a deal with I simply say I don't have the answer for them right now but I will get back to them with that and then I do whatever research I need to find the answer for them. It makes you look much better than saying gee I'm sorry, I'm new at this and I don't know. It's the ol' fake it til you make it mentality. NEVER portray yourself and inexperienced in anything you do. At least that's my take on it.
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Yes....That is my sentiments......Think of this......If you go into a Dept store and you ask for a specialist in Cameras....are you going to want the guy who says that he's NEW and doesn't really know much, or the guy who has worked there for several years and went to Camera School? We are in INVESTOR SCHOOL here......though you may be a freshman....you don't need to let the world know that. Like Elena said.....posture yourself, and if you don't have an answer, tell them that you need to get back to them on that, but that you WILL get the answer...etc. If YOU believe that you are credible...so will they. Your posture, and the way you speak with convey the power of the knowledge that you are gaining here. Knowledge is POWER....that power is YOURS if you take hold of it and make it yours. It's your decision to overcome your fears and convey a position of strength when dealing with sellers. If you remember that YOU are the professional, and that YOU are offering solutions to their problems.....then they will not only believe you, but sometimes agree to your terms and sign on the dotted line.
Sam
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
------------------------------------------------------------------------------
Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
You da man Sam, you know your stuff and that's why you're doing deals fresh out of the gate!!
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."