There are no magic pickup lines

[Jason Malabute]

I apologize for my metaphor, but I’ noticed finding a motivated seller is like asking a girl out that you really like. When guys are inexperienced in courtship they think there’s a magic slick “pick up line” that will make the girl fall in love with them . I hate to bring you guys bad news, but if she doesn’t like you there’s absolutely no one liner you can say that will make her fall in love you. She’s gotta be looking for whatever you’re looking for as well. It’s either she’s into you or she’s not. I had this same misconception when first starting to look for my first apartment deal. I thought I can say something slick that will make any property owner suddenly want to sell their property to me 30-40% below market. I thought as long as I persist the seller will eventually sell at my desired entry price. I was sadly mistaken. What I didn’t understand was that THERE HAS TO BE MOTIVATION FROM THE SELLER FOR THEM TO SELL UNDER MARKET. I’ve grown to learn that there a few “triggers” to look for when identifying a “motivated seller “ : 1) they inherited the property 2) they moved out of state 3) code violations 4) owes back taxes 5) steady low occupancy (below 85% ), etc. Another good rule of thumb in determining if you have a motivated seller is if the agreed offer price is 5% of average rent times a thousand per unit . So for example, if the average rent is $700 you should be paying $35k per unit for the deal to work. If the seller wants to sell at “the right price “ or at/ above market just move on. Still follow up a month later because you never know, but be realistic and know it’s probably not gonna happen. As an entrepreneur, I’ve learned to focus 80% of my efforts on the 20% where you’ll find most of your results (aka motivated sellers). To end my point, I locked in a phone appointment with an apartment owner who is considering of selling his 8 unit for $2.5M. A few months ago I would have been very excited to get this “lead” but now I know it’s probably not a deal, but I’m still going to show up to the appointment because it’s the professional thing to do.

[Evan Polaski]

@Jason Malabute, more people need to understand this.  The calls ebb and flow, but I used to get consistent calls on a few of my properties specifically.  They would always come from people that saw I paid next to nothing in the last recession, with some line of "we would love to buy your property, all cash, are you interested?"  Well, yes I am an investor, so I am always interested, I would think.  Then they would either ask me to name my price (I would give them fair market value) or give me a price that is so far below market value.  

Magically, no one ever took me up on it.  The point being, I was not a motivated seller.  The property cash flowed great, and I knew what it was worth. This whole business is built on relationships.  Yes, it is a numbers game as well, but long term success comes from relationships, not taking advantage of someone one time, because you caught them in a weak moment.

I think it is great you are taking the meeting.  This meeting will likely open way more doors for you than buying his property will.