Tips For Newbies - Learn How To Say "Next"
Bigger Pockets is such a great place for everyone to share their most recent experiences with Real Estate Investing (REI). And it's so exciting to see all of the great deals - and potential great deals - being discussed here every day. I often see forum posts on here from newbies who are about to score their first deal, or they have gotten their first phone call from a motivated seller. Such excitement!
Now, I don't want this to be a bummer kind of blog post, but I just wanted to put a little bit of info out there about those exciting leads and motivate sellers.
First, congrats on getting that lead or that phone call! Many newbies never even get this far. You're out there working it hard, and that hard work is about to pay off. Or is it?
What I want you to be careful of is this - becoming a "motivated buyer". You've worked so hard, read all of the blogs, listened to all of the podcasts, sent out 500 mailers, and now you have a lead! That's awesome! But slow down a bit.
You have to realize that the majority of your leads will not be deals. And you are excited and ready to get that first deal under your belt. But don't try to take a lead and make it into a deal where one may not actually exist. Take a deep breath, slow down, and really listen to that potential seller. And really take a good hard look at the numbers. Don't get caught up in the trap of thinking that goes something like this - "well, the ARV is probably 90 - 100, but maybe it will go 105....". Instead, use conservative estimates on the ARV and the repair dollars required.
In summary, not every lead is a deal. And not every deal is a good deal. Be careful out there, especially as you are just starting out, and be ready and willing to quickly move on to the next lead if that's what the numbers are saying. Just say "next" and move on. You're much better off to move on to a truly great deal than to try to make a marginal deal work. The great ones are out there too, but sometimes you have to just keep on looking.
Comments (8)
Good stuff Bryan. I usually have to take it a step further: Not every call is a lead, not every lead is a deal. Once that's internalized along with a basic trust of your marketing efforts (that is to say knowing that the phone will ring again....) that empowers you to say: "next!"
I have a buy and hold guy I work with pretty regularly who, if it's been a few months since the last acquisition, get's antsy and starts grabbing at anything. So it's not just the newbies that fall into this trap. The term Motivated Buyer hits it right on the head.
Jerry Puckett, almost 10 years ago
Great Article!!
Byron Harris, almost 10 years ago
i love it. Thank You verry good . Newer investors need to learn quickly that this is a numbers game and to not fear as there will always be another right down the road.
Account Closed, almost 10 years ago
Yes, if the numbers are not working just move on quickly to the next, there are a lot of other deals out there waiting to be gotten!
Account Closed, almost 10 years ago
Good article Bryan! Yes, one of the hardest things do is say next. Newer investors need to learn quickly that this is a numbers game and to not fear as there will always be another right down the road.
Darren Sager, almost 10 years ago
Great article Bryan.
You have to realize that a house is a house and if the numbers don't work just move on to the next one. There are thousands of them out there to check out.
I don't know ANYONE that ever did well on a deal where they stretched their criteria or decided to go with the best case numbers. Some lost their shirts and some just didn't do great, but nobody ever said "damn I am so glad I didn't stick to my guns on that one!"
Shaun Reilly, almost 10 years ago
Yep, even with good deals, it can be a great trait. But even more so with bad deals.
Bryan L., almost 10 years ago
Good article, the willingness to walk away is the best negotiating skill one can learn.
Andrew Syrios, almost 10 years ago