GET MOTIVATED SELLERS CALLING YOU!
Here is a little ditty I pulled from a recent email where I was trying to give some helpful advice to a newbie real estate investor on first things first. I think it says it all. Enjoy!
THE DADS normally tell any newbie investor that contacts us with questions about RE investing or help or whatever….just buy THE DADS a Chinese Buffet and we will talk your ears off about REI for 2 hours and help steer you in the right directions to help you get started. I extend that offer to you as well….however, I can also save you the $30…..here is what THE DADS are going to spend most of the time hammering over and over and over to you between slimy noodles:”
#1 STOP looking for “properties to buy” and START finding “motivated sellers that want to sell”! Sounds so simple, but so many newbies never do it and they end up never really getting started at all. THE DADS found that houses don’t sell, motivated sellers sell. Sure, it can work finding a property first, then digging around and spending lots of time and money looking for a person that “may” want to sell. But also, very likely, that person may NOT want to sell. They have other motivations for why that property is not for sale, even though it looks like it should be to you. THEY ARE NOT MOTIVATED TO SELL, and that is OK, but look at all that time, money and energy spent for nothing. Sure you can try to “sell” them on why they should be selling and occasionally, you may get a deal that way. But how many deals from people ready and already motivated to sell, have you missed in that time? MANY, I assure you. Instead of an occasional lead that may discuss selling their property, wouldn’t it be much much better if “every” lead you talked to wanted to sell their property. Sure every lead has different level of motivation, and more motivation is important, but at least ALL have “some” level of motivation. Then all you have to do is screen them through a filter to find the ones with the correct level of motivation. It is MUCH FASTER and WAY MORE EFFICIENT method to obtain a viable deal on a property. Let others do it that other way and reconsider THE DADS better method.
#2 Start marketing NOW, or as soon as you possibly can. Spend $200 first and build your marketing and advertising up from there over time.
GET MOTIVATED SELLERS CALLING YOU!
THE DADS spend $1,500 to $2,000/mth and THE DADS will keep spending more as we grow…..and every successful RE investor THE DADS know spends at least $1K/mth, but we all started with the first $200 and grew from there….even sometimes skipping a month if we had to, but you want to be as consistent as you can afford….any amount consistently is better than skipping months. You want to keep the water(momentum) flowing even if it trickles, but you never want it to stop, because then you have to begin priming the pump all over again to get the momentum flowing.
#3 Take the calls yourself for at least the first 500 to 1000 calls. You will not know what to say in the beginning, people will stump you with new things that you have not dealt with before, people will ask you questions you don’t know the answer to, etc—-SO WHAT!! Enjoy the journey. It seems like failure during this time, but it is only failure if you are not learning something from each call. Handling sellers is a skill that you will never learn at a seminar, a book, a tape or even if THE DADS hold your hand and be on the call with you. It is a skill that you do over and over and over until it becomes an art….and you don’t even think about it anymore. You will wake up in the middle of a call one day and have that “ahah” feeling and you will remember these words I just shared at that moment and understand. Until then, it will feel like the first time you rode a bicycle without training wheels, but worse—one with no tires on the rims. It will be tough and tricky and very bumpy too. It may be call #85, call #149, call #325 or call #965 — nobody knows and who cares? Just keep riding that bike on the bumpy wheels and keep falling down until one day you don’t fall down anymore and the bumps disappear. THE DADS recommend to follow a script of 15 to 20 specific questions. If you don’t know the right questions to ask, just go to our website: www.dadsbuyhouses.com (sorry–this biz is closed now), click the “seller form” and use the same questions THE DADS ask sellers. That is all you need to know for most deals to determine what to do or not do next, and you can always add any other question that you feel you need. Or if you think of a question later that you did not think to ask —no biggie. You can always just call the seller back to get more info. THE DADS we do it all the time when we need to, but we rarely need more than what is in that list you will find at THE DADS website seller form. I don’t know what call it was for me, but it was over 200th call for sure. I filled up a whole small notebook with leads and never did a deal. But the wealth of knowledge that 200+ calls gave me is invaluable to me and I can not even put a price on it. Just know you should just go do it.
#4 If you are still here, THE DADS can work deals together with you and split profits. THE DADS normal split arrangement with most people is you=33% and DADS=67%. THE DADS can provide all the paperwork needed for any kind of deal and over time you would be provided THE DADS paperwork for your own use without us. THE DADS do NOT usually do a formal contract, however on a handshake, THE DADS do expect to do splits with you for about 2 years to get you totally up to speed to go on your own alone. THE DADS have given this speech to 40+ newbie RE investors, and I can only think of about 4 or so that THE DADS ever saw again later and only 3 of those is still active. All 3 are part-timers with full-time jobs and they now rarely need our help anymore as they grow their business to point of quitting their jobs. Although 2 of them do regularly give us their short sale lead referrals because they don’t want the headache of doing short sale deals themselves (read yesterday’s blog) and they know we handle them better than anyone else around here and we can be trusted to pay them their split.
#5 Lastly, THE DADS don’t recommend that you expect to jump into this RE investing business “green” and still be able to financially take care of your family from the income. It’s a business, not a job. You need some source of backup income to pay bills as you grow your business. Either a spouse, or a job or something. In the beginning most profit will and should go to more marketing and covering the expense of phone bills, gasoline, office supplies, etc. It can be done, and it is a choice you have to make for yourself and your family, but THE DADS highly suggest having a backup source of money to pay for your normal living expenses, PLUS having some extra funds to pay for marketing until you start closing some deals. Also, closings are going to be pretty sporadic in the beginning. THE DADS worked those 200+ calls over a 11 months before THE DADS got our first deal from our marketing leads. Then there was several months to the next ones and so on. Even THE DADS still have an occasional time when there are few months between deals. That is why consistent marketing is so so important. It is a numbers game like all business. As you increase your marketing dollars, you increase your lead numbers and increase your deals. Once the deal income is large enough to cover the business expenses and sustain a good marketing campaign and has left over profits large enough to cover your living expenses, then you can “start” to consider doing it full time without a backup income source. However, even then, depending on types of deals you do and volume growth curve or some other aspect of your business model, you still may want to wait and stash some cash aside first. RE investing has many “gotchas” that are out of your control, law changes that can have huge negative affects and like all business, real estate goes through various cycle conditions. All of these things result in more cash needed than normally is needed. And there are usually more zeros involved since real estate is a large asset. So it is wise to be well prepared for these times, or you easily become a statistic. THE DADS have seen many RE investors come and go and we know some with large real estate holdings that have had to file bankruptcy or sell all or most of their portfolio to survive. Even some popular GURU’s have had to do this and then start over again from scratch. It is just good business sense to consider these things properly.
So, there you go. I saved you $30 and 2 hours of watching THE DADS suck on slimy noodles.
Remember, the most important thing to getting started right—
GET MOTIVATED SELLERS CALLING YOU!