Cold Calling - Driving for Dollars Tips?

14 Replies

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!

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 <<insert owners name here>>?"

You get either a yes or no, either way, you could go to (or ask for their name, either way, use it liberally):

"<<insert name here>> 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 <<insert name here>>, I'll be in touch <<time/date>>

if no, then go to "I was wondering if you could help me, I'm looking for <<describe their house, or what you are looking for" do you, or does anyone you know have a property like that?" and take it from there.

If they don't want to sell, don't know anyone, or don't want to talk, thank them politely and follow up with a letter. Call them maybe every 45 days or so, especially if they are in your farm.

If you get a warm one, then make the appointment (Great, how is Tuesday at 5pm or would Wednesday be better?), or if they know of someone, get that someones name, number, address etc. and double check if you can let them know that you were referred to them by the person you were speaking with.

Calling FSBOs, expired listings ( you can get these from your friendly real estate agent), pre-foreclosures, etc. have higher success rates.

All in all, take some time to develop your scripts, practice them, and work on them with your mentor, or a buddy. Practice with the wife, S.O., or other trusted friend. Have them be nasty, ugly and rude. Learn how to handle objections. Read some books on cold calling and selling. If you have a friend who is a real estate agent, pick their brain.

Hope this gives you some direction and a few places to go. Overall you should be looking at a natural, well paced, friendly-but-businesslike conversation. You'll get there with practice and some good scripts. Eventually, you'll loose the scripts.

Good Luck!

Jim

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. Wow James that was really helpful and a totally different way for me to look at it, and makes a lot of sense.  I should be taking it one goal at a time, so my goal right now, is just to get an appointment (so far I had two, but I don't think I did well on those either) The houses were not in good condition, had tennants not paying rent, but still the guy is looking at the rehabbed house across  the street that just sold for X and things his house is worth the same amoutn, or a drop less, so when I made my offer to him it was like I totally insulted him based from his reaction.  

What would you recommend is the best way going from the appointment to making the offer?

Really appreciate the advice.

@Garrett Hogan

Hi Garrett,  I really appreciate the advice, and it make sense, I didn't know what else to say, and the person DID HAVE their guard up, either said "NO!" or hung up on me or "DON'T CALL ME AGAIN" So I definitely like that approach better, and if I was in their position I would also be way more receptive to how you said it, instead of how I said it.

As for books, I would appreciate any book you could recommend to me.

@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,

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

@James C.

Hi James, got it, something that will come with practice.  Yes I know how much I want to pay for the property, or where I am looking to be around.  I have only had a few meetings, and the number they had in their head, obviously not a realstic one, they are comparing their house to the most expensive one on the block that was fully renovated.  I went through it with them, breaking down the number to get to my offer price.

Part of the other problem I am encountering here in New York (not sure if it is the same in other places) is this.  Let's say the property to an investor is worth $1m, (that's the price investors are paying around) there are some investors that go to the owner and say "I will give you $1.3m" so it does two things, first it puts this number in the owners head, second they get a contract from the owner, so now anybody else that calls the owner - everybody else get pushed out, because the owner says "HA your offering me $1m, I have a buyer at $1.3m" or "I am not interested, I am already in contract" the buyer at $1.3 is really not going to pay $1.3, he keeps delaying the sale, delaying the sale, and back peddling to bring the owner down to $1m - I don't thinks its ethical, but it happens alot here - any advice for that?

Also - stupid question, whats a "brag book"?

And want to make sure I got it correct.

cold call - goal is onsite appointment.

appointment - make offer (want to make offer on first appointment, not come back for a second appointment to make an offer?)

Thank you for all your help!

-Isaac

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

@James C.

Hi James that really helps, I am confident in my ability to get the onsite meeting, before I was making the mistake of having the wrong approach on my cold call, which with your help I changed it and my goal is to get onsite, again I am very confident in being able to make those appointments, and having the owner want to meet me.

I know I need to work on the part where I am making them the offer and to sell me the house.  Would you recommend leaving the brag book at the first meeting? Also I know in the beginning, I am going to "mess up" alot of them, but the more offers I make the better I will get.

Really appreciate all the advice,

Isaac

@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.

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 

Hi Isaac,

You should feel confident because you speak fluent English and you are a investor.I am a broker and I am strictly from China. Being that, it’s very hard for me to communicate with my clients and convince them to decrease price or increase their offers.I recently sold a big commercial building in brooklyn and ,thanks god ,deposited a big check.It’s never easy no matter what position you are. Buyer,broker or lender. We are all on the same ship called real estate. Just keep trying and be confident to convince your target. Hope you find a great deal soon.

Rex