Cash Flow Guys Podcast

Society, as it pertains to real estate investors, has lied to us. We have been suckered into believing that a property that is for sale can be “off-market” and therefore supposedly a “good deal” Let’s apply some good old fashioned logic to this. If more than one person in a given market knows that a property is for sale, it’s “On Market” regardless who controls the transaction An off-market property is not in any way, shape or form for sale. Example: A listing broker with a “pocket listing” has something for sale that is not listed on the MLS this is not an “off-market property” because its for sale.  It cannot be off-market and for sale at the same time. Example: A wholesaler who has an assignable contract between themselves and a seller who plans to assign their rights in the contract at closing does not have an off-market property because they are trying to sell their interest in a contract that will facilitate the sale of a property. Example: A wholesaler who has a PSA who intends to double close the transaction does not have an off-market property because they are marketing it for sale.  It cannot be off-market and for sale at the same time. I find that people also focus on off-market because they think they can make better use of limited resources and therefore make their money have more buying power.  If you are price shopping and not getting seller financing there is no better way to shop than as a real cash buyer.  No cash?  You can learn how to raise money, the first step in doing that is to keep it simple and go to PrivateMoneyCrashCourse.com to learn how to raise money the easy way.   Let’s Talk About Pocket Listings: Wikipedia says the following: In the real estate industry in the United States, a pocket listing or hip pocket listing is a property where a broker holds a signed listing agreement (or contract) with the seller, whether that be an "Exclusive Right to Sell" or "Exclusive Agency" agreement or contract, but which is never advertised nor entered into a multiple listing system (MLS), or where advertising is limited for an agreed-upon period of time. The reasons for a pocket listing may vary from the need for privacy or secrecy to discrimination, and some sellers may have their own reasons for not advertising a listing in conventional ways, including wanting to sell only to certain types of people. Several legitimate marketing strategies can also lead sellers to choose pocket listings. Pocket listings can be very appealing to buyers who seek exclusive opportunities. Other legitimate reasons for a seller to decide to do a pocket listing include the potential for a faster, smoother transaction when the listing agent has buyer clients who may be interested in the property. It can reduce the need for many showings to strangers.   Perception: Many buyers think that what they are told is an “off-market” or “pocket listing” must be a great deal already.  This is FALSE.  In fact, recent studies have shown that in many cases the supposed “off-market” properties often sell for more money than properties listed in the MLS.  This is mostly because of the perception that people have. REO or foreclosures - same deal, as a matter of fact, I used to sit Bank-Owned Foreclosure open houses specifically because they received more traffic than traditional open houses did.  My signs were bright yellow with black colored font to capture your eye.  I have the word “Foreclosure” in HUGE font size to grab your attention (by the way, we call that a “hook”.) I hope that after listening to this episode you will be empowered to make batter deals and better prepared to tune out the hype and the FOMO that many buyers face when it comes to buying a rental property or any sort of real estate for that matter.      

In this episode, I track down my good friend Chris Krimitsos to discuss his groundbreaking book “Start Ugly” which you can find at CashFlowGuys.com/StartUgly This episode is quite different from any other episode I have done before, because... I “started ugly” as Chris likes to say.  Starting ugly for this episode all began with a phone call, with no expectation of an answer or any idea of the conversation about to happen. For me...starting ugly is about not putting much thought at all into the limiting belief of “what if I fail?  Instead, I have learned to think more about “what if I succeed?” The book is a parable about allowing yourself to take imperfect action in order to overcome the many roadblocks we face in getting started on a new idea. Today, my idea was to call Chris (without him knowing in advance) and begin to interview him about his book and to discuss his event multimedia conference called Podfest.  Lucky for me he answered the phone! But...what if he hadn’t answered the phone?  I mean heck... I was already recording...Would I have looked stupid to my listeners?  Perhaps they might think I was a little crazy for recording all that but life would have gone on anyway.  What about you?  Are you willing to start ugly?  Are you willing to pick up the phone and call a seller whom you have never spoken to before?  I sure wasn’t, but once I realized that the sellers wouldn’t bite it started to become a little less taxing on me. I also used to worry about looking or sounding stupid, and now I realize that most folks are too distracted to notice whatever I did to look stupid in the first place.  Listen in to this episode for lots of solid gold nuggets that Chris gives us in this interview. Fun Fact: It was Chris and his community at Podfest that is the reason the Cash Flow Guys podcast became reality.  I was slated to attend a Real Estate cruise when Chris invited me to his special event and pretty much insisted that I attend.  It was that invitation that changed my life forever. To learn more about Podfest, and grab your ticket while supplies last, go to PodfestExpo.com today  

I hear this often…”there are no deals in my market”  I call BS on that statement.  There are no deals for You because you are not doing the work to create them.  That is because you don’t have enough leads or the wrong leads.  How to you get in front of more people?  You search for problems and you convert those problems into opportunities by offering sellers a solution (instead of 75% of ARV minus repairs) Most folks only focus on trying to buy what’s for sale.  That’s cute and all but what happens when another buyer has the same idea as you?  A bidding war that’s what!  Speaking of bidding wars and auctions, who really wins those anyway...the highest bidder?  I think not, the highest bidder often overpaid. You can only pay what an asset can afford to pay and the only way to determine that is to spend time speaking with motivated sellers.  When you focus on finding problems instead of properties you will quickly realize that your deals will become much better because you are providing solutions to the seller instead of trying to be the highest bidder. In this episode, I give away a solid gold idea that will help you and a select group of people you know do ten times the deals you are now...listen in to find out what that is.  

In this episode, I dive into the summary of this series on the questions we need to be asking every seller and likely don’t.  When I ask “Is there anything else I should know about this property” I often pick up more tidbits I can use to build out an offer that will get my seller to say yes.  The reason they say yes is that they know I care about their situation and know that my offer isn’t a guess, instead it is specifically designed to meet their needs in regard to price or terms. Keep in mind that I don’t mean that sellers always say yes, quite the contrary, however, my success level of putting together profitable deals right from the start is much higher than most. Another question I ask is “Do you have any idea why the property has not sold yet?”  You’d be surprised how often I receive a very honest answer.  Having a seller go through the process of openly admitting they are priced too high goes a long way towards getting them to reduce the price themselves, without any help from me.  Additionally, they often begin to unconsciously focus on the negatives of the property, therefore mentally diminishing the property’s value.  When I experience this happening I know its time to wrap things up and get this deal inked on paper.

Any idea what the seller will do with the proceeds of the sale?  This question I guarantee that 99.999% of buyers never ask.  Why? Because if you are the type of person who is always trying to predict what will happen next it can be terrifying to ask. In this episode, I give you many reasons and methods of how to ask this question in ways that make it easy for the seller to answer.  Knowing what the seller’s plans are for their equity once a property is sold can mean a simple negotiation that results in seller financing or a lower cash offer if they need cash fast. Be careful assuming what a seller needs and wants, doing so will almost always result in you giving away more than you have to.  Instead, when the time is right, ASK this question and then use the answer to craft a great deal that will be easy for the seller to agree with. When you learn to use the seller’s answer to show them the opportunity for benefits from selling to you that no one else discussed with them you separate yourself from the herd in regard to your negotiations.  The seller believes you care about them and their problem which is demonstrated by you taking the time to learn more about their situation instead of just making lowball cash offers like everyone else. Remember this, most investors are sheep, by that I mean they follow the crowd and do and say what everyone else does.  If you are part of that flock you will waste a bunch of time being led around the prairie while the savvy investors are off in the corner making deals happen. Need more leads to practice on?  Head on over to CashFlowGuys.com/OFA to take the 30-day challenge and learn how to source more leads than you will ever need.        

In this week’s episode, we continue discussing the top 23 questions that you should be asking every seller.  Why a seller is selling can provide clues into the level of motivation a seller has.  By being able to gauge the seller’s motivation you can better access how to negotiate (or if you should even bother negotiating ) a great deal. I am a huge believer in win/win or no deal as a mantra, the only way to structure a win/win deal is to fully understand the seller’s situation so your offer will heal their pain.  A seller with no pain needs to wait for a retail buyer who falls in love with the view or the living room drapes.  You as an investor need not bother making offers to unmotivated sellers, its a complete waste of your time and their time. Asking about the acceptance of “payments for equity” instead of seller financing or seller funding is a much better way to discuss this sometimes uncomfortable topic.  Please understand that this topic does not need to be uncomfortable, yet we sometimes tend to try to predict the future thus having preconceived notions over how a seller will react.  Its these preconceived notions that result in the discomfort surrounding this line of questioning. As Larry Harbolt teaches us, “Seller’s don’t want cash, they want what the cash will do for them.”

In this episode, I continue my series on the top questions that we need to ask but rarely do.  Starting right out of the gate we arrive at repairs which is by far my favorite method for phantom negotiating a great deal. Phantom negotiating is the term I use to describe the use of psychology to impact how someone views something.  In this instance, when I engage the seller or Broker in conversation about what repairs they honestly feel are needed it changes their view of the subject property.  I ask them about the details of why they feel the repairs are needed and what they feel the cost would be. You see, when the seller mentions it, the topic is no longer taboo to them because after all, they brought it up in the first place.  That said, don’t belabor the topic because you must maintain good flow in the conversation for it to be fruitful. During the conversation, when the opportunity strikes, we can always circle back to the topic to get the answers we need or in this case to “plant the seeds”. No matter what cost the seller says (even if ridiculously low) don’t let them feel you disagree at this stage.  The point here is to let that number they spoke sink into their subconscious and do its work to reduce the seller’s impression of the value of the property. So as not to spoil the episode, you will have to listen in to learn the rest of the topics I covered this week.

This week we continue down the list of the 23 questions we must get the answers to.  Being a P.IG. is something to aspire to.  By this, I mean Professional Information Gatherer, someone who is really good at getting the facts needed to properly underwrite a deal.  As our friend Larry Harbolt says, “the good Lord gave us two ears and one mouth for a reason” which means less talking and more listening. When I make calls to find out information about properties we are interested in buying I am sure to record each and every call for my own use.  In every instance when I playback the recording I hear new information that was already told to me once, but I swear I never heard it before.  If you start doing this you will be shocked to learn how much you were told but did not hear.  There are tons of apps that allow you to record your calls, just remember that unless they recordings are for your own exclusive use, you must get the other part’s permission to record.  If the other party denies permission, you cannot make recordings to be distributed.

In this episode, we discuss the details of the primary 23 questions we need to know about every property that we consider buying.  “How,” you ask these questions will have a big impact on the answers you receive.  To make deals with sellers that make sense, we must be solving a problem which is why this process is so important.   As the saying goes, “We Get More Bees with Honey” it’s important to ask these questions in a conversational way so that the seller does not feel drilled by a wartime interrogator.  If you weave them into the conversation while remaining focused on listening to the seller’s situation, we will be better prepared to make offers that are easy for the seller to accept without much consideration.  

Ok, I’ll be the first to admit when I am wrong, and THIS Time I was wrong, I am speaking about direct mail.  The reason I have not been a huge fan of this method of marketing is that it’s generally the least effective form of marketing I see.  Although it does work to some degree, the “acceptable” engagement rates are lackluster at best. Word on the street is that an acceptable response rate on direct mail is around 2% which for me is simply unacceptable. If you have been paying attention, you have heard me say that I am studying the art of writing sales copy from people like Jim Edwards, Gary Halbert, Dan Kennedy, Eugene Schwartz to name a few.  This week I just finished Dan’s book called “The Ultimate Sales Letter” when I had an epiphany I felt I needed to share with you. I discuss this in greater detail during the episode so be sure to listen in to grab those nuggets and put them to use immediately.  After all, how many “We Buy Houses” letters or postcards are you willing to pay for? PS: A GREAT way to start learning is to grab a free copy of Jim Edwards new copybook at CashFlowGuys.com/CopyBook