What I discovered in my first year of investing will shock and amaze some of you. While for others, the secrets I’m about to share with you aren’t exactly secrets to you anymore.
Exactly one year ago I discovered BiggerPockets and set out on a journey to learn all I could about real estate investing, and more specifically how to find motivated sellers who needed my help in Indianapolis and get them to say ‘YES’! In the past year, my marketing efforts have produced a few diamonds in the rough, sellers that truly needed my help to sell fast, accepted my offer, and said ‘YES’ with little to no price negotiation involved.
Most experienced real estate investors have experienced this phenomenon, and in all actuality in the past year I have learned that most successful investors don’t classify this experience as a phenomenon, but rather something that happens quite regularly in their investment business.
Are some investors simply luckier than others? Just like a poker player takes a different approach than most with the cards he is dealt, successful investors take a different approach when talking to and searching for sellers who need their help.
Where as, if you’re starting out, you may be asking:
- Why do my sellers always say ‘NO’!
- Why do my sellers hang up the phone on me?
- Why do my sellers verbally threaten or abuse me?
- Why do my sellers try to sell me beef (happened to me)?
- Why are we even asking these questions when the seller’s response is out of our control?
In an effort to learn and grow my real estate investing business and yours, I reached out to 11 of the most influential contributors to the BiggerPockets blog and forums and asked them to share their secrets with me. Here is what they shared (in no particular order):
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I’ve never “gotten” anyone to say yes, Ben. Formulating this question in this way illuminates a lack of basic understanding of principals of negotiation, which are:
No one says yes to something they do not want. Therefore, it follows that you’ll never convince anyone to say yes – they must convince themselves. The way to do it is to validate the seller’s perspective and structure your proposition to fit with the general thrust of the seller’s perspective. Much, much easier said than done, but in very broad strokes there’s hardly any more to this…and this applies to sellers, buyers, and lenders. Finally, this will also help you with your girlfriend, so think on it 🙂
Ben Leybovich’s is a creative real estate investor from Lima, Ohio.
Ben’s Website: JustAskBenWhy.com
My favorite technique to get people to say yes is to let my personality shine through, rather than put on some sort of “business front.”
I try to bring my wife with me when I meet with sellers, I like to include a photo of myself and my cats/dog on letters, I mention local places when on the phone (such as a local festival or my favorite local pizza place), and I do whatever else I can to let them know I’m not “some big time investor” but I’m a local community member just like them. This one tip has worked INCREDIBLY well for me over the years – even when dealing with banks.
Brandon Tuner is the BiggerPockets.com VP of Marketing and Communications and an active real estate investor.
Brandon’s website: BiggerPockets.com
After fielding many calls and going on numerous countless appointments, I would have to say the number one thing to help get a “yes” is to build a rapport with the seller.
If you are genuinely interested in helping them and their situation it will really show and set yourself apart from the competition. Its that simple. When I go on appointments, I rarely even talk about the house that much. I know I have a good appointment when at the end of the walk through we are talking about what it was like to grow up in the home, the latest neighborhood gossip and everything else in-between. Once the seller trusts you, and if you give them a fair offer, there is little reason for them to work with anyone else but you. Beyond that, try and tailor your offer as a solution specific to their problem. For instance, do they need to close at the end of the month? Whatever it is, try and shape your answer.
Chris Feltus is a listing Realtor in Dallas and active investor within the community.
Chris’s Website: ChrisFeltus.com
When I buy rental properties or fix and flips, 90% of my deals come from the MLS.
There are a couple of ways to get sellers to accept my offers over someone else’s. The first thing I do is always act fast. I am a real estate agent and I can make an offer 2 hours after a home is listed. This doesn’t always get the deal, but sometimes it will. If there are multiple offers, which happens most of the time on great deals I make my offer the most appealing to the seller. I almost always wave my inspection, have no financing contingencies and let the seller know I will close.
Mark is Real Estate Broker and investor in Greeley, Colorado. Mark invests in long-term SFR rental homes and also does 8-15 fix and flips a year.
Mark’s Website: InvestFourMore.com
As most new investors quickly find out – the vast majority of sellers have very little flexibility with the offers they’re willing to accept.
Most of them aren’t even worth an investor’s time because the prices they’re willing to accept will completely eliminate any real opportunity for the investor to earn a profit.
For this reason – it is critically important for an investor to find and pursue the right sellers (i.e. – that small demographic of people who are highly-motivated to sell). We’re not looking for the “average seller”, we’re looking for the person whose property is causing a serious disruption to their life (financially, emotionally, physically, etc). We’re looking for sellers who are fed up and want out. A seller with this mindset will be your greatest source of opportunity because when a person is desperate to get out from under their property, they will be FAR more likely to accept a lower offer (i.e. – something an investor can actually work with). Find the sellers who are less concerned about making money and more concerned about finding an easy way out, and you’ll have a new world of opportunity in front of you.
Seth Williams is an experienced real estate land investor, commercial real estate banker, and property owner.
Seth’s Website: Retipster.com
Let me begin answering this question by first addressing something everyone knows, sellers are people.
Sellers are mothers, fathers, brothers, and sisters etc. Sellers have lived in their homes for a number of years or months and they should get what they are asking for, if they can. With that said it is important to treat each seller as if they are not a number but rather a person. I say this above because so many investors falsely believe that it is “You VS. Seller”, when in reality you can have much more profitable results by operating as “You and the Seller VS. their unwanted home”.
John Fedro has been investing in manufactured housing since 2002 and John now spends his time continuing to build his cash-flow business in multiple states while helping others enjoy the same freedom he has achieved.
John’s Website: MobileHomeInvesting.net
The number one secret to getting sellers to say yes is to be talking to the right sellers.
Of course, I’m talking about motivated sellers. I don’t care if you can negotiate like William Shatner as the Priceline Negotiator, it won’t matter if the seller isn’t motivated in any way to sell their house. The best use of all of our time is getting in front of sellers that are much more likely to say yes so that we don’t have to do any sleazy, used car salesman negotiating.
Danny Johnson is an investor in San Antonio, TX.
Danny’s Website: FlippingJunkie.com/
I believe that the secret to getting sellers to say yes is ultimately about the relationship you build with them.
People do business with other people they “know, like and trust”. In this business, some folks think we are in the house business. In reality we are in the “problem solving business”. It’s vital that you start to build that know, like, and trust relationship right from the start which is usually during that initial phone call. For this reason it’s important to appear confident when you talk to sellers.
Sharon has been investing in real estate since 1998. In January of 2008 she took the leap of closing her business to become a full time real estate investor.
Sharon’s Website: LouisvilleGalsRealEstateBlog.com/
I want to talk to a lot of people. I ask simple questions and try to get them to talk as much as possible.
Like one of my favorite instructors says “You have two ears, one mouth. You should be listening twice as much as you are talking.” A lot of new investors get overwhelmed with all the questions they think they don’t know to ask. To get a great deal on a property, I only need to ask one question; “Would you take $XXXX for your property?”
Aaron Mazzrillo is a real estate investor from the Southern California area who makes a great full time living with just 4 to 5 hours of work per day.
Aaron’s Website: AaronTheHouseBuyer.com/
Seller’s of real estate property are not like someone waiting to check-out at a convenient store, wondering, “Should I buy this pack of bubble gum or not?”
High-pressure and Zig Ziglar sales tactics rarely work on someone who is looking to sell their house. So, what does? The seller has to feel comfortable with you and/or your company. The process of getting the house under contract, sifting through title concerns, mortgages, taxes, closing costs, moving, and getting to the table to close can be a long, arduous, roller-coaster of an ordeal. We get sellers to say YES by answering their questions, being patient, being ethical, and not putting undue pressure on them to sign a contract. Otherwise, they may say YES, and then before closing tell you NO!
Jason Grote has been involved in real estate investing for 10 years, focusing primarily on fix and flips.
Jason’s Website: IBuyAustinHouses.com
All of the contributors that I featured in this post had an important impact in helping me reach my 1st year real estate investment goals. Do I know all of these contributors on a personal level? No I do not, but after discovering BiggerPockets I then had access to some of the most successful and helpful real estate investors in the world. I encourage you to reach out to these individuals, interact with them on the forums, send them a private message, visit their websites, and soak up all that you can. Perhaps one year from now you too will be writing about those members of the community that have helped you achieve your real estate investment goals.
Good luck with your sellers! Wait, I almost forgot…just like with those who succeed at poker, luck has nothing to do with it.