There are two types of texts I like to receive on my cell – texts from my lady telling me how amazing I am, and texts like this one that I got from the managing partner of my local wholesaling business:
“Yo. just picked up a $100,000 house for $18,000.”
Preston Ely here, telling you this story: 1) because it makes me happy to think about it again and 2) I know some of you have a hard time believing you can really get houses this cheap and this lesson will help fix that for you. And it has to do with negotiation, friends.
Keep in mind, I don’t need to wholesale houses myself personally. I have loads of students all over the nation who I partner with on wholesale deals. I do this for no other reason than to test things out and see what’s working firsthand, so that I can better guide my students/apprentices.
But I digress…
So, 2 thoughts raced through my mind as I read this fantabulous text…
1. I can’t wait to find out how we did it, so I can use that info to help my students.
2. This deal alone will pay for a surf expedition, a diamond pinky ring I’ve got my eye on, a Versace suit that I would never wear so I don’t know why I included it in the list, AND my monthly charity obligations. My life does not suck a bit.
That last thought was kind of a long thought, which was weird because I was standing around at Starbucks just thinking it, and people were trying to talk to me, but since I have A.D.D. I can’t do two things at once so I just kept staring at the tree thinking it and pretending like I’m the only person who exists on the planet. Look, a squirrel! (If you’re trying to figure out what to get me for my birthday, a big box of NORMAL would be greatly appreciated.)
Anyway…
What I want to teach you in this lesson is how we negotiated the deal, which is uber important.
The conversation went as follows (according to my biz partner, who routinely lies, but let’s just go with it anyway). My thoughts are in [brackets]:
Biz Partner: How much are you asking for the property? [Don’t EVER say “house” or “home.” There’s too much emotion tied to those words. It’s just a stupid property.]
Seller: Well, we paid $50,000 cash for it last year, but something came up and we can’t bother with it anymore. It needs a full renovation.
Biz Partner: Hhmmm. Well, here’s the problem – for us to make a modest profit on this, which is obviously the only reason we would buy a property in this condition, we couldn’t pay more than $18,000.
Seller: Silence.
Biz Partner: Hello? [It takes balls to offer something this absurdly low. Big brass balls. Get you some.]
Seller: Are you serious?
Biz Partner: Yeah.
Seller: I could do maybe $25,000.
Biz Partner: Yeah, we just can’t do that.
Seller: How about $20,000?
Biz Partner: Ma’am I’d love to do that. Heck I’d love to give you $40,000, but I just can’t. The numbers won’t let me. $18,000 is the best we can do. [Way to stand your ground. You are 100% frighteningly ruthless.]
Seller: Fine. Send me the contract.
BOOM!
How it Worked
There are a couple reasons why we went in so low and didn’t budge on the price...
For one thing, the place is gutted. It’s probably a $20,000 renovation. Maybe even $30,000. Also, my partner could “feel” that the seller would take it. He could just sense it. And that is what I like most about the whole thing…
This 7th sense of his (he has a 6th one that is really weird and totally X-rated so we can’t talk about it here) is what I want you to cultivate. It makes all the difference.
Every big wholesaler I know says the same thing – they can just feel the right number to go in at. They can tell when someone is savvy or a pushover.
The benefit of developing this sense?
Contracting $18,000 houses worth over $100,000. You could probably quit your job with this one deal alone if it was yours.
Go get yourself one.
Say Something
Got a deal story like this? Share below.
Practice your script – be prepared so you’re in control of seller calls.
Do the math – analyze the deals so you know how high and how low you should offer.
Learn the art of negotiating – it’ll make or break your deals.
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.