So I was sitting at Starbucks recently, just typing away (not very fast, mind you; I only use 2 fingers total), when my piece of crap iPhone that doesn’t work ever starts ringing…
Rrrrrrrriiiiinnngg…
Me, Preston Ely: Yeah?
Intruder: Yo! Preston! It’s me, Sam – your favorite student! I just flipped a house for a $15,000 assignment fee. I happened to be in your neighborhood, so I thought I’d call you and say ‘thank you for making me rich’ for the thousandth time in my life!
Me: I’m at Starbucks on Howard Ave. Stop by and tell me about it.
I love it when my students close deals because I learn something new… every single time. In this particular case, it was more of a reminder than anything, though. And I thought it might be helpful to you to pass it along to you, just in case you’re not doing this already.
First of all, the seller in this case was a landlord who had received a postcard from Sam – get this – literally more than a year before. This doesn’t surprise Sam at all because at the top of all his postcards, he puts the words “Save This Card!” Apparently he’s accustomed to people doing what he tells them to do.
I dig that about Sam.
And, Sam uses an answering service that literally fills out his leads sheets for him. So when he calls a seller back, he already has the comps in front of him and can negotiate on the phone if the situation warrants it.
Question you’re asking yourself: When does the situation warrant it?
Answer I’m answering for you: When the seller’s asking price is relatively close to something you’d be willing to offer based on the ARV you’ve estimated from the comps.
If the seller’s asking price is way off from where you want to be, simply fax/scan them an offer. That way, when they start cursing, you don’t have to actually hear it.
Then maybe fax/scan them another offer once every 30 days thereafter… and reduce the offer amount every single time – put a line through the offer price and write a new lower one in place of it and initial it. (We don’t do that latter part, but it just came to me, and frankly, it sounds like a genius idea. I’ll test it and see.)
Back to the story…
Sam pulls the comps in the MLS (cause he’s a Realtor for some weird reason) and determines the value is around $228,000. He calls the seller and asks how much he wants. The seller says “$80,000.”
Sam faints.
When Sam comes to, he tells the seller he’ll call him back. He then has an imaginary conversation with his non-existent business partner.
He calls the seller back and lets him know he spoke to his “business partner” (he leaves out the imaginary part) who has told him they can only do $70,000, but he says – and here’s the moral of the story…
“We will pay all your closing costs.”
Now, here’s the thing with closing costs – people think they’re way more than they actually are…
The seller probably felt that considering Sam and his “business partner” were paying all closing costs, he was still getting close to his asking price. In reality, we’re talking about maybe a $1,000 bucks or so in this situation.
So he said “okay.”
Sam marketed the deal at $85,000 net (“net” meaning – the new buyer is responsible for all closing costs), and, in his words, his “phone rang off the hook like it was 2006.”
LOL. I loved 2006. Didn’t you? Selling houses was like passing out free bricks of gold to people who loooooove bricks of gold a lot. I’m not sure who that is.
Sam could have made more money on that deal. But he doesn’t care. Because now a lot of buyers in our market consider Sam a genuine wholesaler with really good deals (unlike all the other wannabes). And they’ll pay special attention to any new properties he gets in.
The value of this cannot be overstated.
I highly suggest you aspire to be like Sam. He has the right stuff. (I mean, how could he not, with a coach like me?!)
Make it happen.
Say something
Got a cool deal story like Sam’s? Share below.
Add wording on your mailers telling people to ‘save this card’ – they often do, and you might end up with a deal from someone who got your mailer a whole year before.
Follow up on every lead and offer, repeatedly.
Learn to become a master negotiator.
Offer to pay for closing costs while you offer your lower-than-asking-price for the property – oftentimes, sellers think they’re getting a wash with the lower price and the paid closing costs.
Preston Ely
is a real estate investor, serial entrepreneur, life coach, musician and philanthropist. CEO of Real Freedom, Inc, one of the most influential internet-based information publishers in the world, owns the largest Anytime Fitness Gym in the United States, is recording a music album with Atlantic Records, sits on the board of Advocates Of Love Orphanage, and has a non-profit charity assisting the poor and oppressed in Cuba with both their physical and spiritual needs.
With over 200,000 subscribers to his email newsletter, he is rapidly fulfilling his mission on earth, which is to glorify God by setting people physically, mentally, financially, and spiritually free through his music and his message of FREEDOM. Preston is 37 years old, lives in Tampa, FL with his wife Ashley, where he spends most of his time reading, writing, and practicing mixed martial arts.