Even seasoned real estate investors can find it challenging to close a deal. But accepting two important truths of investing can help make it easier for you when a deal doesn’t close for you.
Today Matt also talks about a specific part of a deal that absolutely has to be in place to successfully close a “real deal”.
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(Voice Over): Epic Real Estate Investing Podcast Episode 25. Without further delay, your guru. Sorry. Your guide to a better life, the real estate investor, Matt Theriault.
Matt Theriault: Hello. Greetings from The Epic Real Estate Investing Podcast. The podcast that will show you how to build wealth through creative real estate investing. That’s what we will discuss today and for a long time to come so you’ll have the option to realistically retire in the next 10 years or less.
And enjoy the good life while you’re still young enough to do so. That’s why we are all here. It’s why I’m here. I hope it’s why you’re here. That’s what I want for everybody listening to me right now.
My name is Matt Theriault, author, full time real estate investor and family man. If this is your first time listening to the show. You want to do two things. First of all, welcome. Glad that you’re here but you’re going to want to go back and listen to Episode 1 for the ground rules of the show.
Two, I want you to download the Free Real Estate Investing Course – How to Do Deals, No Money Required. You can get at FreeRealEstateInvestingcourse.com.
It’s a step-by-step course of where I unveil the mystery around doing deals with no money or credit. That’s yours for free at FreeRealEstateInvestingcourse.com.
Now before we get on with today’s show, I received another great comment over at iTunes. It comes from Thomas Mountain. Thomas writes, love it and made me money. Five stars. That’s the headline.
After listening to the podcast, I made a deal today that I would have thought impossible. Real world advice that works and will make you money. Keep up the good work.
Thank you, Thomas. Thank you for the endorsement. If you could put that in video format and send it to me at EpicProfessionals.com, if you could put that in video format and share that with me and send it to me and allow me to use it.
I would show my gratitude with a lifetime membership to the Epic Pro Academy. That actually goes for anybody that’s listening. I only make this offer on this podcast by the way. This offer is not made anywhere online or offline. Just right here.
You see I received a lot of emails from my podcast listeners from those that have taken action on what I’ve put in my free real estate investing course. Inside of those emails, there are some really fantastic stories. There are great stories of success, great stories of break through and some great stories of nice paydays.
These emails cite what they’ve learned inside of my free course as to the reason for their newfound success. I love receiving these emails that makes me feel really good. It confirms what I’m doing is actually making a difference. That’s why I’m here. So I appreciate the emails.
Keep them coming but so you know if you send me your testimonial in a video format with a copy of a check that you earned as a result of what you’ve learned in my free real estate investing course. I’ll express my gratitude with a free lifetime membership to the academy.
I received one from Miguel Losa. Another from Keith Hudgeson just before we launched so thank you to you too. I really appreciate it. I hope you’re enjoying the lessons within the academy.
Okay. So that’s my offer to you all. Just a simple exchange. A win-win if you will. That brings us to today’s episode. The subject of today’s episode. You know last episode we discussed how to create win-win deals with sellers. We created five steps. What to actually say once you get inside the door of the property.
The five steps that you want to take to close the deal. If there’s a deal to get, little bit of a caveat. We’ll get to that today. So step one, you want to build rapport. Okay? Build rapport. Step two; create an upfront agreement or an upfront contract. Sometimes you will hear referred to as either or.
Step three; establish the seller’s motivation. Is there seller motivation? You have to know that. Step four, money. What does the seller actually want for the property? Step five is the terms. What are terms of which you will pay what the seller actually wants?
I’m not going to go into details on any of those steps because we did that on our last episode so if you want to go check that out. Make sure you go download that episode. But I didn’t leave you with a little bit of a cliffhanger so I’m going to address that part today.
So with regard to steps four to five, the money and the terms. How do you get to the final amount that’s going to be paid for the property? How do you get to the final terms of which that price is going to be paid?
I could give you a magic sentence or two that would bring a whole deal to a close and you have this pretty little deal all wrapped and you can take it to escrow and collect your check and you get done.
Unfortunately, it doesn’t quite work that way. I mean I could give you the greatest closing script in the world but what you’ll find out there in the real world is that the sellers don’t know they’re part of the script.
They don’t operate from a script. They’re not going to say what you think they’re going to say or what you think they’re going to say or what you hope they’re going to say. I mean up to this point, I’ve given you some really good leading questions in these steps.
And they’ve given you a good structure for the conversation with the seller. But the reality is you just never know what the seller is going to say or when the conversation will head off into an entirely new direction like they take a sharp left turn. You’d be like, whoa! What happened?
You’ll never know when that’s going to happen. It happens all the time. I mean every conversation, every negotiation; every transaction is going to be lesson in and of itself. You’ll learn something from every transaction that you couldn’t have possibly been prepared for.
When I say every transaction, I mean every transaction especially when you’re dealing with motivated sellers. Maybe you heard this before, there’s a customary answer for every real estate investing question.
I mean any question that you can possibly think of I can answer it. There’s one answer that satisfies every question. I mean I have never heard a question that which didn’t apply. You name it. What’s the property’s worth? I’ve got an answer.
What’s the best way to invest? I’ve got an answer. Is this a good deal? What should I write on the contract? What should I say to the seller? I’ve got an answer. What should I say to the buyer? I’ve got an answer.
I’ve got one. How do I narrow it on the final price in terms of a deal? It doesn’t matter what the question is. The answer is always the same. The answer is it depends. It depends. That answer “it depends” should tell you something about real estate investing. There are hundreds if not thousands.
If not countless variables at play all the time. All the time. There’s no one way to do things. There’s no one way to narrow in on price and terms and close the deal.
There is no one way to do that. You can have your own system in place. You can have your own structure. You can have what works for you. You can borrow what works for someone else but it’s all different. There’s no one way to do it.
But I’m not going to leave you hanging with it depends. Okay? I wont do that to you. We’re going to go over how to narrow in on the price and terms and close the deal.
But first not every opportunity is going to be a deal. In fact, most of the opportunities in negotiations will not turn into deals. So just accept that before ever quitting or ever saying something stupid like this real estate investing thing doesn’t work.
I hear that all the time. It drives me nuts. I mean if it didn’t work. How does it create more wealth in the world than any other vehicle or industry? It does work.
It works really, really, really well. In fact it works better than anything else. Or also it wouldn’t have produced more wealth in the world than anything else. Just know that most opportunities will not result in a deal. That’s just the nature of real estate. That has nothing to do with the system that you’re using.
It has nothing to do with you. Okay? Second, the centre of every one of these opportunities that does turn into a real deal for you will be the seller’s motivation to sell. I’ll repeat that. The centre of every real deal of foundation, the nuts and bolts, the thing that makes it happen of every real deal is the seller’s motivation to sell. If there’s no seller’s motivation, you’re paying full price baby. There’s no real deal there.
I don’t care what script you’ve got. I don’t care how much experience you’ve got. I don’t care what book you’ve read, what webinar you’ve watched, what course you take, or what podcast you listen to.
If there’s no seller’s motivation, there’s no deal. Well let me, I guess there could be a few exceptions. The first would be the seller just flat out doesn’t care. How often do you find that? Even if you did, it could be explained in a way by their motivation. They’re just that their motivation lies elsewhere so the seller’s motivation would actually be at the centre of that deal too. Wouldn’t it?
So that one doesn’t count. So I guess there are only two exceptions then. The next would be the seller’s just flat out ignorant. They don’t know any better. I supposed that you come across that every once in a while. I certainly have but at some point you being experience the real estate investor would realize that the seller doesn’t know any better.
That’s up to you whether you want to do a deal there or not. Some people have a conscience for that type of thing and some don’t. I do not. That actually leads us to the other exception. You’re being dishonest in some way.
That’s how you could put a deal together without seller motivation. You’re lying to them. You’re cheating them. Those are the exceptions. Outside of those, the centre of every real estate deal is the seller’s motivation to sell.
Okay. Got that? Good. Most opportunities will not be deals. If those that are deals will be a result a direct result of the seller’s motivation, if you understand those two dynamics, accept them and embrace them.
You’re going to save yourself a lot of frustration. If you can do that, I have hope for you. I have hope for you because it’s frustration that runs people of this business. That causes them to give up on their dreams.
Don’t want that for you so if you accept those two dynamics, that most opportunities will not be deals, and of those that are deals would be a result, a direct result of the seller’s motivation.
You can accept those. You got a shot. If there is seller motivation, now you got to do is to decide on price and terms. Here’s your decision. This is what you’re going to decide. Which one am I going to control? Are you going control the price or the terms?
That’s the decision you got to make. You got to control one or the other. You’re going to control the price or the terms if you expect to get a deal. I mean if you got control over one of those, you do have a deal. You got a real deal.
You see I buy a property in one of two ways. I recommend you start thinking this way as well because if you adhere to this, it will keep you out of trouble meaning it’s tough to lose money if you buy in one of these two ways. As long as you’re competent with your property evaluation, you really can’t lose as long as you can control one of those two aspects: the price or the terms.
See. I buy a property at my price with the seller’s terms or I buy a property at the seller’s price with my terms. Meaning if you’re going to buy at your price that means you’re going to buy at a steep discount because what are darn near the only terms most sellers understand cash, cash now.
Yep. That’s the seller’s terms most of the time. So if they want cash, their terms then I’m getting my price at a steep discount. Half off that’s a good place to start or if the seller insists on their price, you got to have to control the terms. I want the terms. I mean the terms are what? Creates wealth.
If you want to create wealth that’s really what you’re going to want to. You want to get really good at crafting your terms. You want the terms and you’re going to get the terms most of the time. That’s ok because it works out for you so it’s nice how it ends up that way.
You know not too many sellers are going to sell their property at half price. If they want my cash, that’s what they’ve got to do. You’re out to create a win-win deal not a win-lose deal so Mr. Seller, when I asked what price did you realistically want for the property, what did you say again?
$300,000. Okay. I think I could probably make that happen when I asked earlier if you would be open receiving payments for a period and being cashed out at some time down the road, you would say we could discuss it. Right?
Right. Okay. Good. So I asked you that because I purchased property in one or two ways. I either pay my price with your terms or your price with my terms. Since you want $300,000, would you like to break that up into 200 monthly payments or 100 payments?
That is one way in which it could be done. It’s one way. When I say this in my line of workshops, the hands starts shooting up in the air like sky rockets then the questions, they start coming at me but Matt when if the property is not worth $300,000?
But Matt, how do you know it would cash flow divided into 100 payments? But Matt, what is the interest rate? But Matt, what seller in the right mind would take that deal? But Matt, couldn’t you do it this way?
Oh but Matt, wouldn’t it be better this way? But Matt, what if he says this or what about the existing mortgage? Matt, what is the property is upside down?
The questions are endless. You see what I mean when I say the answer to every real estate investing question is it depends. There are too many possible variables. There isn’t one size fits all close the deal or one-size fits all ways to do real estate.
You just got to get out there and do it. You got to get out there and do something. You will never know it all. You’ll never be prepared for it all. So stop waiting for the day that you will be. As I’ve mentioned every transaction is a lesson in and of itself.
Keep investing in your real estate investing education. Keep taking action and moving at the speed of instruction. When you get to as far as you can see right now, you’ll see further when you get there.
That’s the only way to do this business. All the lights will never be green at the same time. Keep reading. Keep studying. Keep taking action. Keep collecting the real world experiences.
Keep getting good at this but get good at it by doing it. Real estate investing is a skill. It takes practice. It takes time to nurture a skill to the point where you are good at it.
Real estate has created. It has created more millionaires and billionaires than any other industry o investment vehicle. If they all did it, why not you?
The experts are saying that there’s going to be more millionaires and billionaires created in the next few years than any other time in history. If they’re going to do it why not you?
I don’t want to leave you with a big, giant raw pitch. I want to leave you with some substance. Okay? I want you to walk away form this show with most opportunities that you encounter will not end up as deals.
It might sound like a whole lot to you right now but it’s gold. That’s golden wisdom. Most opportunities that you encounter will not end up as deals. As soon as you realize that and accept it, your real estate investing experience is going to get a whole lot more fun and easier.
The deals that you do get will be a direct result out of the seller’s motivation to sell. That’s another invaluable piece of wisdom to carry with you while you’re doing your deals.
When you do start doing good at this, and you start picking up deals consistently because if you do this long enough. You do the right activities. You do it consistently. You will start picking up deals.
It might not seem like for you right now but keep doing it. It will happen. It has to. Just the way the world works. You do the right things. You do them consistently. You’re going to get the result. When you do start picking up deals consistently, it’s wise to check in every once in a while with your stats.
My own little rule of thumb, this helps put this business into perspective for a lot of people. My own little rule of thumb if I’m closing more than one out of seven deals, I’m probably paying too much for real estate.
I’m probably not getting the great deals that I think I’m getting. If you’re closing more than one out seven deals, you’re probably paying too much for real estate. So know that most of them, you’re not going to close.
If you find yourself closing too many, check in to see if you’re paying too much. That’s all I got for you today so until next time. As a very wise person once said, in theory, there’s no difference between theory and practice. In practice, there is.
Get out there and do it. To your success, I am Matt Theriault. Living the dream.
(Voice Over): Thank you for spending this time with Matt Theriault and the Epic Real Estate Investing podcast. When you have time, stop by iTunes to leave your comments and let us know what you think of this show.
And if you haven’t done so already, get started investing today by visiting FreeRealEstateInvestingCourse.com to access Matt’s free course on how to deals, no money required. Until next time. To your success, to your success, to your success.[End of Transcript]