Epic Real Estate Investing - 9 Tips to Be a Better Investor | 817

Episode Date: October 26, 2019

Real estate is a people's business and communication skills are an integral part of it. Therefore, Matt shares 11 tips to better negotiate with sellers. Tune in and find out more! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Success in real estate has nothing to do with shiny objects. It has everything to do with mastering the basics. The three pillars of real estate investing. Attract, convert, exit. Matt Terrio has been helping real estate investors do just that for more than a decade now. If you want to make money in real estate, keep listening. If you want it faster, visit R-E-I-A's.com.

here's Matt. Hello and welcome to the epic real estate investing show. I am on a layover in St. Louis Airport on my way back home. I cannot wait to get back home. But as they say, the show must go on. So if you're curious about the background noise, I can imagine that you probably aren't hearing stuff. Now you know what it is already?

But now let's get down to business. You know, here on the epic real estate investing show, we talk a lot about generating leads, which is super important, right? Because if you can't generate off-market leads, your opportunity to buy real estate at a discount, it's going to be very limited. And we talk a lot about cash flow, too, and wealth creation that real estate makes available and possible. And when consistent action on the right activities is taken, probable. I mean, it really is the final frontier where the average person has a legitimate shot of creating real wealth. And another subject frequently discussed here are the various and essentially the unlawful,

the unlimited number of creative deal structures that one can put in place to acquire real estate and to sell real estate in the interest of really just maximizing an investor's return and maximizing an investor's options. And among the number of questions that I received, I mean, a great deal of them have to do with creative deal structures, as if one knows how to put these together, they can acquire this kind of real estate, really at will, at which there is, you know, there's some truth to that For sure. Yet, it's an incomplete truth. You know, to put creative deals together, as well as putting properties under contract and deep discounts, there's a skill that deserves more attention on this show. And it's the very reason I started the ground and pound school with Jeff Garner. And the skill I'm speaking of are your negotiation skills and really your overall people skills, as this is a people business. I've said that here at least once before. And it's really the secret to the business. And the irony is, it seems the part of the business that most people just don't want to deal with or don't want to invest in themselves to develop.

And certainly there are some exceptions, but for a decade of hosting this show and interacting with you, the majority of interest lies in the latest shiny objects that generate automated leads, the latest strategy that enables you to work without working, without leaving your house, without leaving your couch even, and finding the money. A lot of interest in how you're going to find the money. wants to take the first step until they know where the money's at. And they're like, how am I going to invest in real estate if I don't have any money? It's a logical question. And everybody wants to know that answer. And how am I going to find someone to fund my deal? How do I do this if I need to pay rent in the next 23 days? You know, all those questions and interest,

they all've got really simple answers and they can all be solved relatively easy for you. but not at the expense of eliminating the interaction with people. You know, every piece of real estate that you buy or sell is going to be from or to another person. None of this business of real estate happens without interacting with people. And if that's something that you're not down for, no problems. I totally get here. But if you still want to invest in real estate, the solution is really to just have someone else do it for you. that's why we started cash flow savvy and it really is Mercedes passion she absolutely loves doing it

they go i'm not sure if that was a plane or that was thunder but uh mercedes cashful savvy savvy is really her passion and she just loves helping people through this process and she knows her stuff like nobody else and she has an amazing bedside manner and a real knack for getting the most scared timid beginner successful through the process and creating a cash-rolling real estate portfolio. So if you don't want to be belly to belly negotiating with sellers, have someone like Mercedes do it for you. That's probably the best solution for you. But if you're more of a hands-on type person and like the idea of doing it yourself, whether that's part-time or full-time, the greatest favorite that you can do for yourself is to hone your people in negotiating skills as not only will

help you purchase real estate at deeper discounts, you won't have to spend as much money on your marketing either as you'll be able to create more deal. out of less leads. So I'm just getting on this plane, and I'm about to get on this plane, leaving St. Louis. And this subject is really fresh on my mind. And I just wanted to give you nine quick tips for better negotiating with sellers. All righty. So let's just dive into it. Number one, I just jotted these down on this little bar napkin right here. And people are looking at me like, who am I talking to? Anyway, I'm talking to you. So that's all that's important. So number one, be prepared.

Know your market and know your values because it's the market that determines value, not you, and not the seller. So knowing your market and your property values are going to help you significantly in your negotiations and really prevent you from overpaying from making bad decisions based on the price that you're acquiring real estate. So that's number one. Be prepared. Number two, team up with the seller. Oh, there goes another point. They've got jets coming out of here. Like, find your jets.

Interesting. Number two, team up with a seller. So the easiest way to win a negotiation is to team up with the person that you're negotiating with. So make an ally of the person that you're negotiating with. Make your negotiations, you and the seller against the market. It's a fantastic rapport builder. And we all know that building rapport inside of a negotiation is vital and essential. And it all just kind of comes naturally if the seller feels that you're on the same side as them.

And it comes really easily when you genuinely are. So just make you and the seller, it's you two team up against the market. All right. So that's number two. Team up with the seller. Number three. Set expectations. So when meeting with the seller, before and after every meeting, before and after every meeting,

use what's called a transition agreement. Some people refer to it as an upfront contract. But we're just going to call it a transition agreement because we're going to use it before and after every single meeting. Every time there's a transition between the meeting between you and the seller. So you want to establish the purpose of the meeting in this transition agreement, the duration of the meeting, the seller's agenda, your agenda, and the expected outcome. Those are the five essential elements of the transition agreement. The purpose of the meeting, the duration of the meeting, the seller's agenda, your agenda, and the expected outcome. And when you do this before and after every meeting, what it does is it creates really clear communication.

So it eliminates all the chances of miscommunication or certainly minimizes it significantly and, you know, really minimizes the possibility of any sort of surprises, unwanted surprises specifically. It establishes trust. It demonstrates your competency. And it keeps you in control of the process moving the transaction forward to a successful conclusion. So, for example, a transition agreement might sound like this. So if you were going to show up to the front door of the cell, you might say something like, hey, thank you for your time today. I'm glad to meet you.

And so generally what happens is we take 25 to 30 minutes. We give me a tour of your property and just kind of point out any work that needs to be done or any work that you've done already. I'll ask you some questions about the property and your situation. And then if at the end, if there's a fit here, if it's what we're looking to buy, I'll go ahead and make you a cash offer. And if you say yes, that'll be awesome. We'll take the next step.

And we can close whenever you want. But if for any reason you're not interested in my offer, no is always okay. That's what the transition agreement sounds like. And I touched on all five of those essential elements of that transition agreement. And it just does wonders for the whole transaction. It maintains good rapport. It maintains trust. And it keeps you in control.

And it shows that you know what you're doing. And ironically, it shows that you know what you're doing even if you don't know what you're doing. All right. So that's number three. Set expectations. Number four, go for no. You know, the old way to sell or buy it in this instance, I guess it's buy in this instance. It's an old way to sell is to try and convince and influence the person that you're negotiating with and handle their objections in the interest of getting them to say yes. You know, in an evolved society that has been exposed to this type of negotiating for centuries, they're privy. They're hip. they see it coming. I mean, if you're going for a yes,

they see you coming from a mile away. So adopt this. Losers go for yes. Winners now go for no. So for example, every seller you talk to at some point you should ask them, you know,

have you considered just calling a realtor? So you're going for the no. So in every conversation, like I was saying, why don't you just call a realtor? See, you're going for a no there. They're not going to say, yes, that's not what you're going for. They're going for a no. They're like, no, I don't want to

call a realtor. I don't have the time. I don't want to deal with them. I don't want to pay the commission, whatever it may be. And then also, you can take that a lot deeper in multiple stages during your conversation with a seller and consider asking, why don't you just fix up yourself and sell it? That's what I'm going to do. That's how I'm going to make money off of this property. That's how you can do it too. Why don't you just do it yourself? So you're going for the no. Oh, I don't want to fix it up. I have time to do that. I don't know how to do that. Or another one would be, why don't you just stay in the property and wait for the market to catch up? That's probably your best option if you just kind of stick around and wait for the market

catch up because it will. We all know it will. Real estate always goes up. So why don't you hang out and wait? So you're going for the no. They're like, no, I got to leave now. So they're answering you no. So you're asking questions that calls the seller to say no. At least the motivated sellers will say no. To where the only answer left ultimately will be a yes. But that's not you going forth, they're just going to volunteer it and say, let's do this. All right? So that's number four, go for no. Number five, everything is okay. Regardless of the condition of a property or the situation the seller may be in, everything is okay.

It's all very common. It's never their fault. You know, most sellers that are going to be calling you, they're not, I mean, quite frankly, they're not on winning streets when they call you, right? Something's going on in their world that's disruptive. And they need to sell their house and whatever they can get from that house is either going to eliminate or at least mitigate or minimize what's going on in their world. And they can be mad or they can be embarrassed. They may be scared.

That type of disruption in someone's life, it produces all different types of emotions. And as much as they're looking for someone to buy their property fast and easily, they're also looking for some relief from the situation that they're in. you know, for example, this past week, Jeff and I, we went out on an appointment and we met with this guy that basically, it basically just bit off more than he could chew with a fix and put. He got a great deal on a property and he started to fix it up. He hired his uncle to come in and help him do the work. He's going to save some money doing it that way and help out a family member. And really, it just came down to the uncle was taking a sweet time, soaking up the budget, soaking up the clock. And we could tell that the seller was really fresh.

And our response was, oh gosh, it looks like you picked a really big project and it just turned out to be much bigger than you thought. And you thought you could save some time. You thought you could save some money by pulling in a family member. You know, this is totally common. It's totally okay. I mean, we see this all the time. It's not your fault. So let's just see if we can get you out of this.

So when we said that, when we told him it was okay, it wasn't his fault. It's totally common. We see it all the time. You can just see the relief come over the seller's face. It was almost instant. I mean, just his total body, like it transformed into this nice, peaceful existence. You can just see the stress leading his body. So that's number five.

Everything is okay. Number six, fall in love with silence. That makes a lot of people uncomfortable when nobody's talking. But you need to embrace that. You need to fall in love with it. Because when it's time to present the offer, or anytime you just really ask a difficult question, but particularly around presenting the offer, and you propose what the market is going to allow you to offer, as soon as you made that offer, just shut up, go silent.

And don't get all uncomfortable with it. Just sit there and let them process. Don't try to help them along with their thought process. Just don't say a word until they speak. The first one that speaks there typically is the loser. And if you speak first, then you're going to have to swing all the way back around and make the offer again. And then you have to, then you're face with the same situation. So if you don't like the silence, just do it once.

It's better than going through it twice. But if you fall in love with it, you're going to find amazing results inside of your negotiations. Right. Number seven, create urgency and scarcity. And, you know, you really don't have to do this until you're getting a no for your offer. Right. So if the seller is like, no, I don't think so. Or, you know, let me think about it.

That's when you really kind of go for the urgency and scarcity. And it might sound something like, okay, well, that's fine. And I understand you want to think about it is probably a good idea. But I understand that, I mean, just understand that I can only honor this offer this offer right now. Because I've got other appointments after this. I've got some more tomorrow. And if I buy one of these next houses, I'm not sure that I'll be able to come back and buy yours. So as long as you understand that, then go ahead and think about it.

But if you'd like to get this done with and, you know, maybe you prevent me from buying one of those next ones, then we can do this right now. So that's a way to create urgency and scarcity in an authentic way. Because you are going to have other appointments. And you can't buy them all. So you're being true for you're being direct. So make sure that the seller knows that because you can't buy the mall. You might not be able to honor that offer tomorrow. All right.

So that's number seven. Create urgency and scarcity. Number eight. Walk away. It's a great negotiating strategy. And if you're unable to walk away, you know, if you're unable to say to reach an agreement that works for you, you've got to walk away. If you're afraid to do that,

if you're afraid to walk away, you've already lost. You need agreeable sellers to do deals, but you don't need any one seller. This is where a good lead mission comes into play because there will always be more sellers to talk to. And if your lead generation is flowing, and you know you've got more leads to talk to,

you know you've got more opportunities and appointments coming up, it's much easier to walk away. You don't sit there and hold on with all your heart. and your might trying to hold on to this one-seller leave. And you get to that point, if you're afraid to walk away, more times than not, you make bad decisions. Ready?

So walk away. If it's not a good one, walk away. Number nine, I love this one. It's my favorite one. And it's everybody's least favorite. That's to practice. Just practice it like you would any other skill. Negotiating, it's a skill.

And it's a skill just like playing the guitar or riding the bike or something as simple as tying your shoe. meaning you weren't born knowing how to do any of those things, and you weren't born knowing how to negotiate. It's developed with a massive repetition until it becomes second nature just like any of those others. And you can probably get on a bike. I mean, shoot, I got on, what was it? Last week, two weeks ago, I caught on a bike. It's probably the first time I've been on a bike in like 10 years. And I wrote it just fine.

It was a little wobbly, but I didn't fall down. So negotiating, it's just like that. It's a skill like that that once you practice, practice, practice. and you develop that skill, it's never going to leave you. And quite honestly, you're going to practice one way or the other. So you get to decide whether you practice with your friends, family, and associates, or if you practice with live seller leads. And you're going to practice one way or the other.

You just get to choose who you practice with. And one of those options is much more expensive than the other. But that's up to you. All right? So now you know, now just go out and do what you know. Got it? All right, that's it for today. God bless and tool success.

I'm Matt Terrio. live in the dream. Yeah, yeah, we got the cash flow. Huh. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. You didn't know, home world, we got the cash flow. This podcast is a part of the C-suite Radio Network.

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