The most significant challenge that many people face when they start investing in real estate is their own lack of confidence when it comes time to talk to motivated sellers. They may be gung-ho about doing their marketing, but when it actually starts to work and the phone begins to ring, many are scared to pick it up. They may be scared of botching the deal or looking silly or they may even be afraid of the seller themselves. But what all of this truly comes down to is a fear of the unknown.
Investing in real estate can be an intimidating trade to go into, but any endeavor that results in the kind of significant financial payoff that real estate investing does is bound to be challenging for a beginner. Because, honestly, if there wasn’t any challenge involved, everyone in the country would be doing it and enjoying their financial freedom, wouldn’t they?
The fact is, the only way to conquer this fear is to face it. But if you are armed with a simple process to follow, coming to terms with this fear will not be nearly as gigantic an obstacle as many novice investors think it will be.
On today’s show, Matt tells you about his simple 3-step process that enables you to separate the suspects from the prospects. As a result, you’ll have more time to spend on what’s important — speaking to truly motivated sellers and making income from real estate investing.
Even if you don’t have much credit, money, or experience (or if you don’t have any at all), you can still get started as a real estate investor now by downloading Matt’s free course at https://www.FreeRealEstateInvestingCourse.com.
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(Voice Over): Without further delay, your guru, umm ugh sorry. Your guide to a better life through real estate investing. Matt Theriault.
Matthew Theriault: Hello and greetings from the Real Estate Investing podcast. This is episode number 39.
This is the podcast that will show you how to build wealth through creative real estate investing so you’ll have the option to realistically retire in the next 10 years or less. Enjoy the good life while you’re still young enough to do so.
My name is Matt Theriault. Author, full time real estate investor and family man. If this is your first time listening to the show, welcome. Glad you’re here. Now, you’re going to want to do two things.
First, I want you to go back and listen to episode 1 for the ground rules of the show. And two, download the Free Real Estate Investing course, “How To Do Deals No Money Required”.
You can get that for free at freerealestateinvestingcourse.com. It’s a step-by-step course of where I unveil the mystery around doing deals with no money or credit.
I mean, to this point, my investing career, I’ve implemented 12 different strategies of investing in real estate using none or very little of my own money.
I’ve yet to use one point of my own credit score and inside this free course, I give you the first two strategies. The first two of which are, they’re easiest too.
They are the actually, they are the two that can generate the quickest success for you as well. You can get them for free at https://freerealestateinvestingcourse.com.
All right. So a couple of episodes ago, we discussed why your yellow letters aren’t working. And if you missed that episode, you’re going to want to go back and listen to it. I think it’s, yes Episode 37. Episode 37.
Because it’s not just why your yellow letters aren’t working, it’s really why all of your lead generation isn’t working. I mean it’s probably one of the more important episodes that I think I’ve really ever recorded. I got a lot of great feedback. I went back and listened to it again myself.
I’ve just, I said it exactly how I wanted to say it. As the engine that runs your entire business is your, it’s your lead generation. So if you’re not generating leads, you’re not finding deals. If you’re not finding deals, you’re not writing offers.
And if you’re not writing offers, you’re not investing in real estate but it begins with your lead generation. So go back and listen to that episode you missed. Okay?
If you did listen to it, I mean it probably wouldn’t be a bad idea to listen to it again with this perspective inside of a new context. You know this one of the more common questions I get is where do you find deals?
I hear that all the time or what’s the best way to find deals? Or what’s the fastest way to find deals? Or what list should I send my yellow letters to? Or what website should I advertise my deals on? Or what type of planning page should I do?
I get all that “where to find deals?” is probably the most common question I get. It’s understandable because probably one of the more challenging parts of this business. You know, but there is only one way to get motivated sellers to call you?
There is only one way to get them to call you. That is to keep a steady and consistent message in front of them. Okay?
That’s how you get motivated sellers to call you to give a steady and consistent message in front of them. For the greatest results, you want your message to be everywhere. Those motivated sellers are everywhere.
You know when your message is everywhere, that’s when you generate leads. So if you feel your message is everywhere and you’re still not getting the results you want. That’s why you want to go back and listen to episode 37.
All right? So I’m going to assume for the rest of this episode that you have listened to Episode 37. Or you’re going to listen and I’m going to want to assume that you’re going to move at the speed of instructions. It’s so important.
Your phone is ringing. Right? You’re talking to motivated sellers and you’re analyzing deals. The next question that I frequently get is how do you know when you’ve found a good deal? How do you know good deals from bad deals? Or how do you know good deals from great deals? Or how do you know deals from no deals?
Well what tends to discourage and derail investors more times than not is that they chase too many leads that look like deals but they’re not. And it’s very easy to do especially when you’re new.
Then especially when you’re marketing and all the marketing that you’re doing you’ve got your message out there in front of motivated sellers when all of that is working and the phone is actually ringing.
I mean that’s an exciting time especially if you ever experience that before it’s exciting when your lead generation is really coming together and the phone is ringing. It’s easy to chase every suspect that you encounter. And you will encounter them.
Suspects, lots of suspects as opposed to prospects. There’s a difference. You know and until you get some experience under your belt, it can be tough to sort those suspects from the prospects to be able to tell the difference.
I mean even with experience, sometimes it can be tricky. Now although there is no fool proof way to avoid wasting time with the suspects, there is a way to avoid wasting a lot of time. That’s called qualifying your leads.
All right? So let’s go over how to qualify your leads when they call you? All right? So you got your website up, you’ve got your little ads out there.
You got your online ads., your offline ads. You got your business cards. You’ve got your flyers. You even got your road side signs. You got all of your marketing working.
They call you. How do you qualify them? How do you separate the suspects from the prospects? Well I’ve narrowed down. It only takes three simple questions. I’ve talked to different people and I’ve heard different approaches.
Some people sit with it on a big, giant, long script by the phone. I think you didn’t really do it with just three simple questions.
All right? It’s like, it goes like this, the phone rings and when you answer, the seller on the other end will say something like long lines, “Hey, I saw your ads,” “I got your yellow letter, or “I saw your ugly yellow sign on the side of the road” at a very relaxed manner. It’s you know it’s no big deal to you. Right?
You’ll say,” Great, cool.” Now we got your situation. That’s the first thing you say. Tell me about your situation. All right? And after you say that, just be quiet and listen. That’s all you got to do.
Tell me about your situation. Be quiet and listen. Remember your people skills. You got to listen more than you speak especially if you’re on this process. And when you do speak, you want to be asking questions.
That’s what you’re going to do when you do speak. You ask questions. Now when they’re done telling you their situation, you’re next question is what do you want to have happen?
That’s the question. What do you want to have happen? And again, listen. Great. What do you want to have happen? And if you listened and heard them out with the first question, they’ll tell you exactly what they want to have happen?
And why will they tell you? Well they’re going to tell you because they’re starting to like you. How is that so? There are just two questions. They’re starting to like you. Now I mean it’s funny sometimes how it plays out.
I mean you just listen to their situation and you showed interest in their situation. And because you were interested, to them you are now interesting. That’s how you get people to be interested in you.
You need to be interested in them. And because you were interested in them, to them you are interesting. And people like interesting people. Get it? See how that works?
Now their answer to this question, what do you want to have happen? This is the information that you need to start figuring out how you’re going to create a win-win scenario out of this transaction. If they indeed turn out to have enough motivation itself. All right?
The answer to this question is going to give you the ammunition that you need to start creating or crafting a win-win solution. The better you get at getting motivated sellers what they want, the more often you would what you want.
So after they’ve told you what they want to have happen so now you know what they want to have happen. You don’t need to have the solution yet but now you know what they want to have happen.
Your next question is going to be, if we were able to come to an agreement, how soon would you want to sell? If we were able to come to an agreement, how soon would you want to sell? That’s the third question.
And this question right here is going to separate the suspect’s from the prospects. Most of the time. You see with this question is where you’re listening for motivation. It’s where you’re listening for urgency.
I mean we would want to hear, I want to sell ASAP. I mean we want to hear, I want to sell today. Those are the type of things you’re listening for or even better.
We want to hear, I want to sell yesterday. And if you hear any of those or anything of the sort, you may have a real prospect.
Okay? Anything other than that is likely a suspect. But when you think of something to that demonstrates urgency, you may have a real prospect.
But again, if you don’t hear nay urgency in their words or their voice, you want to be real cautious with regard to how much time you’re going to spend with this person.
I mean you can probe a little bit further if you want, I mean you got them on your phone but remember you’re looking for sellers that need to sell. There are a lot of people out there that want to sell.
There are a lot of people out there that will consider selling but you don’t want to deal with them. That’s not who you are looking for. You’re a real estate investor and real estate investors look for deals.
The deals come from the people who need to sell. That’s where your time is best spent because that’s where the deals are. Those are your prospects.
And when you find those and only when you find those, do I recommend setting an appointment to meet the seller in person and visit the property. Only when you find those do I recommend setting that appointment. They actually go meet them in person and visit the property.
Here’s why, you see, you’ll get a very high number of suspects calling you from your marketing. If you done any marketing, you already know that. You’ve got a lot of people that have called you that weren’t even remotely motivated. Suspects.
So, these three questions that I just gave you will do most of your sorting for you. Sorting the suspects from the prospects. That is your first goal when prospecting. Is to sort the source of suspects from the prospects. Leave the suspects alone. Don’t waste your time.
A lot of people getting all your day’s worth of time sucked up by spending your time with them. You got stuff to do. Your time is better spent elsewhere.
Now, your second goal when prospecting is to establish whether there is a real deal to be had or not. You got a prospect. Now, is there a real deal here or not? Let us move on or should I stick around?
So, how do you know which deals are real deals? Well, here’s how you know the deals from the real deals. It’s a simple 3 step test. Keep it simple. One, two, three. One, two, three.
First, is this what you’re looking for? Is the property of this motivated seller has, this prospect, is it even what you’re looking for? Does the property fit the criteria that you have set for yourself?
Meaning, does it produce cash or cash flow? Maybe you’re an investor that needs cash and you want to go fix a flipper wholesale. Is this a good viable property for that?
Or maybe you’ve got some cash and you just want to start converting it into cash flow. Is this property a good candidate for making cash flow, creating cash flow for you?
Is it in your defined area? Is this the type of property you’re looking for? Is it in the price range in which you are looking? Does it fit your criteria? All of those things comprise your criteria. So that’s first. Does the property fit your criteria.
Second, is there motivation on the seller’s part. Does the seller truly need to sell? Does the seller truly need to sell? Because it will be the seller’s reason for selling with the perceived time crunch within which to do it. It will be that reason more than any other factor that will help you get a real deal.
So first, is the property fit your criteria. Second, is there legitimate motivation there for that seller to sell. I mean, this is going to be your mantra right here. As this mantra can save you hours and hours of deliberating whether you have a deal or not. Your mantra is the foundation of a real deal is the seller’s motivation to sell.
The foundation of a real deal is the seller’s motivation to sell. Got it? The foundation. What it is all built on, what a real deal is built on. It’s built on the seller’s motivation to sell.
Your job is to find out why the seller is selling. Why is that important? Well, because the foundation of a real deal is the seller’s motivation to sell. The reason why they are selling. Typically, you’ll have to ask the seller many times before you get the real answer.
There are a lot of reasons for that. I mean, some are trying to keep up their negotiating phase and they don’t want to give their house away. Others might be embarrassed to reveal why and others might just not feel comfortable with you yet.
So your going to have to ask several times before you get that real answer. The answer that you get the first time you ask why they are selling is typically just the tip of the iceberg.
You know, 90% of that real reason lies hidden below the surface but just keep asking. If it is a motivated seller to which you are speaking, you will eventually get your answer. All right?
Now, third. It first was, is the property your criteria? Second, Is there truly seller motivation there? Now third, and this is the final test of distinguishing a deal from a real deal, what are the price and terms? Okay, pretty basic.
What are the price and terms? To consistently get a real deal after real deal and reach the goal that you have set yourself, you must always be controlling one or the other. Got it?
You must be always controlling either the price or be controlling the terms. Sometimes you get both but not necessary. You only need the price or the terms. You’ll buy property and only one of two ways.
You either pay your price with their terms or you pay their price with your terms. Did I say it right? You either pay your price with their terms or you pay their price with your terms.
What that means is, to make a profit on a deal, you need to either purchase the property for your price at a steep discount and their discount, which is typically cash, that’s what they want.
Or you’ll pay their price and it doesn’t really matter what their price is, I’ll explain in great details on what I mean by that in an immediate coming episodes, but you’ll pay their price with your flexible terms.
As long as you can control one, you’ve got a real deal. If you pass the first two phases, if it’s the type of property you are looking for and their seller’s motivation, as long as you can control the price or terms, now you got a real deal.
I’ll repeat that because with this mindset that you will reach your goals and create your fortune where you’ll financial freedom.
As long as you can control the one, the price or the terms, you got a real deal. In very often, this will happen for you, if the deal passes those first two tests. You’re going to get the control of the one or the other.
So, one is this what you are looking for? Two, is their seller motivation? If you get a yes to those two questions, you will typically be able to get your price or your terms which defines a real deal.
So, next episode, what we’re going to do is we’re going to go over property analysis. That might sound boring to some of you and might sound really exciting to others but I want to go over property analysis because this is part of the business in which many investors are guilty. They’re guilty of bad property analysis. It’s probably the biggest reason investors lose money.
They didn’t analyze correctly. I want to go over that. It’s just really a big deal because what if you do get control of the property and you get the price or your terms and this is a real deal and you just found out that this is going to go your way. You’re going to get the price of the terms.
Well, you better pick the right price. Conversely, if you get control over the terms on your real deal, you better pick the right terms. That’s what good property analysis does for you. It reveals the right price. It reveals the right terms.
So, we’re going to cover all of that in the next episode. That’s all I got for you today so until next time. As a very wise person once said, “the great aim of education is not knowledge but action.” 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 do deals, no money required. Until next time. To your success, to your success, to your success.