Epic Real Estate Investing - EPREI 008 : How to Present an Offer and Get Consent

Episode Date: July 19, 2011

Deals don't happen unless you're presenting offers, and even more importantly... deals don't happen unless your offers are getting accepted. Matt shares with you exactly how he presents his offers and gets them accepted averaging 2-3 deals a month. Get your free course in real estate at http://FreeRealEstateInvestingCourse.com Learn more about your ad choices. Visit megaphone.fm/adchoices

Epic Real Estate Investing Podcast, episode eight. You're about to meet a man that can show you how he took control of his life and financial future and how you can do the same. He's never been on TV. He's not a millionaire, and he does not know Donald Trump. He is a full-time real estate investor, newly discovered offer, and family man. He does not report to a boss. He creates his own schedule and takes his family on a few vacations every year.

He got started investing in real estate with almost no money in a really crummy credit score, and he's going to show you exactly how he did it and how he continues to do it. You will have to work. You will have to be responsible. However, laying by the beach sipping fruity drinks is a reasonable goal without further delay. Your guru. Sorry. Your guide to a better life through real estate investing. Matt Terrio.

Hello and greetings from the Epic Real Estate Investing podcast, the podcast that will show you how to create wealth through conventional and creative real estate investing, so you will have the opportunity to realistically retire in the next 10 years or less, and enjoy the good life while you're still young enough to do so. My name is Matt Terrio, author, full-time real estate investor, and family man.

If this is your first time listening to the show, you'll want to do two things. One, go back and listen to episode one to get the gist of what this show is about and why we're here. I mean, everything we discuss is going to make a whole lot more sense once you do that. And two, download the free real estate investing course, how to do deals, no money required, at free real estate investing course. It's a step-by-step course of which I reveal everything that I do, everything that I say, and everything that I use, including the documents and the contracts, to invest in real estate using no money or credit. and that's yours for free at free real estate investing course.com. Okay, so let's waste no time. We'll get right into it.

Last episode, we learned how to determine whether a property meets our criteria, meaning if it's in our area, if it's in our price range, and whether it's going to move us closer to our immediate goal of cash or cash flow. We also learned as to why we want to deal directly with the decision maker and pursue opportunities of which the sellers need to sell, as opposed to wanting to sell or has an interest in selling. I mean, that took us through level one evaluation and halfway through level two evaluation.

And in order for us to complete level two evaluation and put us in our first money-making position, we covered the basics of evaluating a property. So now what do we do with all of that information? How do we actually determine our initial opinion of value? Well, it's going to take some practice, and I'll walk you through it verbally here. If you'd like to see the visuals as well,

you may do so by downloading how to do deals, no money required at free real estate investing course.com. Again, I hope you understand that I'm not trying to over-promote that. The reason I keep mentioning it is because there's only so much that I can show you through my words. Some of the things that I'm explaining, you might not get and you're actually going to need to see it to actually get it.

And I created a video, or multiple videos, for just about everything that I'm discussing. All right, so now how do we actually determine our initial opinion of value? Well, if you have access to the multiple listing service, that will be your best source to access comparables. You can get access to the MLS in a few different ways. First, if you have a broker's license. Second, if you have a real estate salesperson license of which you have hung with a broker, and some MLS companies have what's called an affiliate membership of which you need a broker to endorse you to that company

or that board that hosts your multiple listing service. There's going to be a fee attached to that service. I don't know. I'm not sure what it is around the country, but in Southern California it's around $300 a year. And if you don't have direct access, you'll certainly want to get a cooperative and open-minded realtor on your team. They can get you access. And in most cases, if there's a possibility of business in it for them, they'll be more than happy to do so. Now, if you don't have access to the MLS, there are countless websites of which you can access basic comparable information. I used to

really dislike this particular website, but they're making great strides in becoming more user-friendly to investors, and that would be zillow.com. But there are many to choose from, and if you have a favorite, just continue to use it. Doesn't matter too much at this point. Once you've located the five lowest comparable solds in the last 90 days or so, you can take those five sold prices to a website that I set up to help you determine an initial opinion of value. And you can find that at epicanalyzer.com. Epicanalyzer.com. Now, when you log on to epicanalyzer.com, you'll have three options.

There will be one big button that reads fix and flip, a second big button that reads buy and hold, and a third that reads multifamily. For now, let's just leave the multifamily button alone, at least for this example. So if the property you want to analyze as one you intend to wholesale or flip for cash, click the fix and flip button.

If the property is one that you're going to want to use to create cash flow, click the buy and hold button. They're both relatively easy to use. In fact, they're very easy to use. Just fill in the blanks, and then you hit calculate at the bottom of the page. And epicanalyzer.com will generate a 6,000,000,

suggested maximum offer for your subject property. Now, it's not the end-all be-all number. It's not actual value. It's simply a suggested maximum offer of which takes into account all of the expenses that you're going to incur and it takes into account the profit, the amount of money that you're going to put in your pocket. And it creates what's called a suggested maximum offer

or you could also consider this your initial opinion of value. This is the maximum price of which you want to get under contract. That's all that this number is. Once you've entered all of your data and clicked calculate, if that's suggested maximum offer number seems to be a reasonable number based off of the information you collected from the seller interview, you have a decision to make. Oh, and you've completed level two evaluation at this point, by the way.

Now, you have a decision to make. If that suggested maximum offer number seems to be a reasonable number based off the information you collected from the seller interview, you have two options. You can refer the deal or you can secure the deal. your first option is to refer the deal to another investor and receive what's called a bird dog fee. Now that's investor talk for referral fee. And I'll be showing you how to create a buyer's list a little later,

so you'll always be in a position to easily refer the deal to another investor. Typically, you can expect to make anywhere from, I don't know, $250 to $1,000, depending on the deal, for your bird dog fee. This is your first opportunity to make some cash, and it requires absolutely no money out of your pocket to do so. Now, if you don't have an investor's list yet, or you don't have anybody interested, and you've followed all of these steps,

as I've described up to this point, send me an email with the information directly from epicanalyzer.com. You can send emails with all of that information right from that website. So send me that information from epicanalyzer.com, and more times than not, I can go ahead and I'll do the deal,

and I'll pay you the bird dog fee. Now, there's no guarantees, but if you follow the instructions up to this point, it shouldn't be that much of a problem. Now, although a $1,000 payday, that might be acceptable to some. I mean, a few people actually get involved in real estate investing for that type of money. They want the bigger money that real estate investing can provide.

And of course, I'm going to show you how to do that. But just know that this, right here, this is your first opportunity to make some money. And sometimes people will actually turn this strategy into a business in of itself, finding deals and referring them to other investors. But if a bird dog fee via referring the deal to another investor, I mean, if that's not your thing, I totally understand. It's certainly not my thing either. So that takes us to our second option.

Your second option is to secure the deal, to present an offer to purchase and put the property under contract with the intent of assigning or wholesaling the property. And that takes us to the P of our epic approach, present and get consent. Now, investors, especially newer investors, either get stopped at this point because they've never completed a real estate purchase agreement before and they fear the unknown. Or they don't understand how they're protected under the contract. and or most tragically, they don't understand the control and power they will acquire by putting the property under contract and how that positively impacts their negotiating position. Now, before we go over putting together an offer to purchase real estate, I must disclose that I am not a lawyer, okay? I am not providing legal advice. I mean, real estate law is not universal and it varies from state to state, oftentimes greatly.

The information I'm about to share with you is how I conduct my business, and it's presented in more of, of a theoretical nature in order to be as universally applicable as possible. So no warranties or guarantees are being offered. Please seek appropriate legal counsel before entering any real estate transaction. Now, there are multiple places you can get purchase agreements. You can get very basic agreements from stationary stores like a staples or office max. But in my opinion, they tend to be a little too generic and vague for my comfort level. But you know what?

Investors use them all the time. Or you can get purchase agreements from your local, board of realtors. But again, in my opinion, they tend to be stacked a little too deep with legal gobbly gook, that of which can be really confusing and or irrelevant as much of what is written there is to protect real estate agents and their brokers. Now, additionally, both of those sources for your purchase agreements will require a lot of handwriting on your part. And considering the amount of offers you will be writing, you'll probably want to put a system in place that will increase your efficiency as well as maximize your organization. So the best place

to get your purchase agreements is from your own certified real estate attorney. However, if placing an attorney on retainer is out of your budget or just seems to be a little over the top for you, I mean, each and every investor will have unique experiences and unique needs, the simplest place I've found to create my purchase agreements, of which are good in all 50 states, is through a service you can find at epiccontracts.com. Epiccontracts.com. There, I can easily fill out the contract online and just print. Just fill in the blanks. I think it's around $60 annually or $29 a month, but the $60 annually allows you to complete as many purchase agreements as you want within that year. And you'll have

access to contracts for a multitude of purposes, but I typically only use their real estate contracts. I mean, their real estate contracts, they're just so easy to use. I mean, you just fill in the blanks and if you ever have a question about a certain field, there's a little question mark icon next to each field to explain and offer assistance. I mean, it's really, really easy. And once your contract is complete, and don't forget your CYA clause, you'll need to present your offer to the seller. And by all means, insist on presenting the offer in person. I mean, go out of your way to make this happen. It'll be very easy to fax it or scan it or email it, but resist all temptation. There is so much room for misinterpretation in the written word and all of that hard work that

you've done up to this point, it can be lost with a simple misunderstanding or misrepresentation of your offer. I mean, you want to be in a position to present and just your offer as a fair one without accidentally introducing any objections or confrontation through miscommunication. So first, to properly present an offer, I recommend presenting at a neutral location, like a coffee shop or a restaurant. You see, by presenting an offer and conducting your negotiations at their place or yours, you know, too many distractions are present of which can introduce unnecessary and sometimes

flat out invisible hindrances and barriers, and it can break up a deal and you have no idea why it broke up. So do what you can to meet at a neutral location. Second choice, present the offer at the property itself. You'll want to position yourself on the same side of the seller when you're presenting, meaning it's not you versus the seller, it's you and the seller versus the market and the market conditions. And in how to do deals, no money required, I videotaped a role play for you of what that actually looks like, what that conversation looks like. Now, after you've presented the offer, there are three different possible scenarios. The seller can accept your offer, or the seller can reject your offer,

or the seller can counter your offer. If they accept, congratulations. You are in contract. Now, if they reject your offer, you can either move on to the next deal, or you can submit another offer. If they counter your offer, you'll want to counter back. This is where many deals are lost, by the way. Don't make the mistake of rookie investors.

Don't get emotional about deals, and don't take counteroffers personally. And don't believe counteroffers are the seller's final position either. You will counterback, always. Even if you counter back with the exact same offer you originally presented, always send a counterback. Never let the ball bounce twice in your court. Keep countering back until you get a flat-out no or you get consent. Once you're in contract, you have two options. You can now assign the contract to another investor, of which you can command a much higher fee than our previous bird dog fee.

typically anywhere from $5,000 to $20,000 is a reasonable wholesale fee. It depends on the deal though. Depends on the area as well. I include the assignment paperwork in how to do deals, no money required, everything that you're going to need. Simply complete that paperwork. It's really simple and just turn it into your escrow of choice

and they'll take it from there. Your second option is to actually go for more, more money. And we'll uncover the many areas of which you can put more money in your pocket. Now, whether you intend to flip this property or hold on to it, and we'll do that on the next episode. and we'll start learning how the money you may or may not need to close is revealed, how it's lying right under your nose and most can't even see it. Whether you need that money or not to close is relative, but it is money, your money nonetheless.

Until next time, as a very wise man once said, action speaks louder than words but not nearly as often. To your success, I'm Matt Terrio, live in the dream. Thank you for spending this time with Matt Terrio and the Epic Real Estate Investing Podcast. When you have a moot, stop by iTunes to leave your comments and let us know what you think of the show. And if you haven't done so already, get started investing today by visiting free real estate investing course.com. To access Matt's free course, how to do deals, no money required. Until next time.

To your success. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.