Remember that awful, gut-wrenching feeling you got right before giving a speech or presentation in front of all your peers in school?
Maybe you enjoyed that type of thing (dang it, you brave people!), but – for most of us – stage fright when talking in front of people was and still is a very real terror.
As a real estate investor, this is especially true when making offers on properties.
Hey there, Moguls, Steph Davis here and today, I want you to know this: Making offers is a common fear that many wholesalers have... so you are NOT alone!
When I was just getting started, I was absolutely terrified to talk to sellers. (Really, I’m not exaggerating.)
Case in point: My first few months of wholesaling, I did a lot of direct mail marketing (letters, postcards, etc.) so I wouldn’t have to talk to sellers. Then when the phone calls started coming in, I didn’t even answer because I was scared to talk to them – so I just let my phone go to voicemail every time. And I didn’t even call the people back! Who does that?!
I then had a self-imposed “intervention” and realized that I was putting money into this marketing, and I couldn’t afford to be a scaredy cat anymore.
So, if you’re anything like I was, and you struggle with anxiety when it comes to making offers on properties... let me offer a few basic tips for handling your nervousness:
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Remember, it’s normal to be nervous – this will get better with practice
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You don’t have to make an offer on the initial call – don’t put that pressure on yourself if you don’t feel comfortable
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Let the seller know that you simply need to gather some info, and then say that you will call them back after you have a chance to collect your thoughts and do your due diligence
Hello... It’s Me: The Initial Phone Call
When you’re on the initial phone call, here are some of the basic details you should focus on collecting from the seller:
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Property’s address
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# of beds/baths
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Square footage
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Repairs needed/property condition (of course, you will eventually verify this when you see the property in person)
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Vacant or occupied
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Tenant info and lease amount (if applicable)
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Reason for selling – determine their level of motivation
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Timeline for selling – how fast do they want to sell?
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Asking price – look for prices that are below market value, as this indicates motivation
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Mortgage balance – knowing this can save you time because you’ll have a better understanding of the minimum price a seller would be willing to accept, in order to not lose money on the property
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Anything else a potential buyer should know
Next Steps
Once you gather all the basic information on the property, let the seller know that you will take some time to do your diligence and will call them back soon.
Of course, you want to make sure that you call them back in a timely manner, especially if you’re dealing with a motivated seller. If you take a week to get back to them, another wholesaler might beat you to the punch.
Because I want to give you a thorough understanding of this next step in the negotiation process, I’ll continue this conversation in my next lesson. I’ll tell you about my method of due diligence (i.e. what and how to research) before making an offer. I’ll also give you some examples of how to check recent comps, what to say during your follow-up phone call with the seller, and more. So stay tuned for that!
I do have one more thought for today, though…
Mindfulness for Motivation
I want to tell you a story that illustrates how to determine a seller’s level of motivation.
When I was getting started as an investor, the very first motivated seller I talked to had a mother who was suffering from cancer. So the mother moved in with the daughter, and the daughter took care of her mother for several years. Eventually, the mother passed away in the home.
I had sent the daughter a postcard in the mail (obviously I was totally unaware of the situation) and the daughter called me. She was desperate to get out of that house, the poor thing – and that’s when I realized exactly what a highly motivated seller is. That home actually ended up being my very first property deal.
So remember, there’s a lot of learning as we go.
The Only Thing to Fear Is Fear Itself
What do you do to help get yourself “pumped up” for initial phone calls with sellers? Let me know your tips for reducing nervousness below.
Practice makes perfect. It never hurts to run through a “practice” phone call with a trusted friend or another real estate investor. Just hearing yourself talking out loud will help boost your confidence when it’s time for the real deal.
Jot that down. When making initial phone calls to sellers, keep your checklist of items to ask about right in front of you. Avoid making initial phone calls while driving or when you don’t have a pen and paper with you. This way, you will stay on track and be able to take down some quick notes about the property.
Be prompt. If you tell a seller that you’ll follow up soon, keep your word. Even if the property deal doesn’t work out – it’s important to establish a trustworthy and professional reputation for yourself.
Steph Davis
started wholesaling in October of 2006. At the time, she had been stuck at a job bartending for the past 10+ years. She was broke and miserable, and desperately wanted out of the bar scene, which I had been stuck in for the last 10+ years.
She ended up closing four wholesale deals by the end of 2006.
Since then, she's closed more deals than she can count, has written two best selling wholesaling courses (Flip This REO and The Cash Buyer Ninja) and continues to teach others how to wholesale with videos, interviews, and as much useful information as she possibly can, because she knows what it’s like to be a broke beginner, struggling to get that first deal.