Epic Real Estate Investing - How to Find Deeply Discounted Properties | Episode 117

Episode Date: August 18, 2014

It’s the goal of any investor: buy low and sell high.  So as a real estate investor, how do you find deeply discounted properties that you can profit from?  It's a common question from our Epic listeners, and today Matt is breaking it down.   In the most straightforward way possible, Matt shares not only how to find deeply discounted properties, but an easy method for how to get those deep discounts even deeper!  Enjoy! ------------------------- Download Matt's free real estate investing course "How to Do Deals | No Money Required" at FreeRealEstateInvestingCourse.com or text FreeCourse to 55678 "Click" what interests you most:  Education Properties Income   Coaching   Learn more about your ad choices. Visit megaphone.fm/adchoices

Broadcasting from Terrio Studios in Glendale, California. It's time for Epic Real Estate Investing with Matt Terrio. Hello, and welcome. Welcome to another episode of Epic Real Estate Investing. If this is your first time listening to the show, welcome. Super happy that you're here. This is the place where I teach people how to escape the rat race by investing in real estate. And, you know, if I were to do it all over again, I'd do it exactly the same way, and I do it exactly the same way, whether I had money and credit to work with or not.

You see, while I was getting started, while I was finding my way, I stumbled upon 12 different strategies that just kind of carried me through. These 12 different strategies of investing in real estate, they required little to no money. And in hindsight, you know, being forced to get started that way, being forced to invest with little to no money or credit, I believe that made me a much better, investor in the long run. And I mean, just for example, I mean, even though I have money now, why should I use it if I know how to do it without it, right? That's why I believe it made me a better investor. And I want to make you a better investor as well. So what I did is I put the first two strategies, the two of which I believe are the easiest and the fastest strategies to a paycheck. I've put them into a free course just for you. And you can access that course at free

real estate investing course.com. Or if you're listening on via your smartphone, you're not in front of a computer right now, you can just go ahead and text free course to 55678 and you'll get the course right there on your phone just like that. Okay? That's free course. That's all one word. There's no space in between free and course.

Text that to 55678 and the course is yours. Alrighty. So a little hyped up. I just got back yesterday from a week long trip in Tampa. Tampa, Florida. And what I was doing there, I was connecting with 70 plus of the most successful real estate investors in the entire country. And, you know, anytime that you can connect with a bunch of like-minded people, it just

always kind of turns out to be a good thing. When you're around people like you, it's cool. It's just a, you know, sometimes this world of entrepreneurship, the world of real estate investing, it can be a lonely world. And just to be able to associate with people that. that are just as crazy as you are, you know, it confirms that you actually aren't crazy. And so that's very comforting. And, you know, I got to meet tons of great people.

I got to meet actually Jason Hartman of the Creating Wealth podcast. Awesome, dude. I really liked him. We had lunch and we talked a lot. And it looks like he and I will be working together in the near future in some capacity. Not totally sure yet, but we're going to talk. And so I'm very much looking forward to that. And then I met some other really great people of which it looks like I'll be able to

help them and I met some other folks that will be able to help me in my challenged area. So just overall, a really great week. All righty. So, but I am glad to be back. I love traveling, but sometimes, I mean, I was gone for a whole week. That's a long time to be away from home and missed my, missed my son and just kind of missed home life and being able to relax, you know. And so I'm back to work. And I love it. And by the way, on emails, speaking of back to work, you know, the inbox is kind of the first thing that catches your attention when you get back. And I am so far backed up. I have been for quite a while.

I have so many emails from you that I have yet to get to. And I'll do my best to eventually get to them. But I can't make any promises. I just want to say that because if you've sent me an email and perhaps you've been accustomed to getting responses from me and now you're not getting them or if you're brand new to the show or recently within the last six months or so and you haven't received a response, I'm not ignoring. you, not by any means. It's just that there are just too many. There's too many emails. And I want to get back to each and every one of you, as I've made it a habit to do for the last several years, those that you've been listening for a while, you know I respond. But I just physically can't anymore. I can't do that and maintain my own business at the same time. I hope you understand.

And having said that, though, your best chance at getting a response from me is just by getting to the point, getting to the point and keeping your question short, short and simple. I get too many that are four, five, six, or seven paragraphs of backstory before ever asking the question. And I just don't have time to read those. I would love to, but I just, I can't. Okay. So, sorry about that.

But if you do ask me a question, a short and simple one, there's a better chance that you'll get a response for me. Not guaranteed, but a better chance. You know, I got a short one right from Donnie. Trana, I think is his last name. I got that question while I was traveling. It was really easy for me to get back to you and is very easy to read and answer. So Donnie asked me, hey, I heard on the podcast recently that you are planning on updating

the free real estate investing course, was wondering if you had any idea about when it will be updated. It sounds exciting. Can't wait. Thanks, Donnie. See, that's a question I can handle. It takes me less than 10 seconds to read and it takes me less than 10 seconds to answer. So, Donnie, thank you for asking.

And yes, I have completed a new version of. the free course updated for today's market with some new best practices and new resources and it is done well at least my part is done i finished recording it i finished putting it together now i'm just waiting on the post production team to do their part so it looks like we'll be live with that no later than september 15th i'm working on getting that to you much sooner but it's much easier for me to estimate later and release earlier than it is the opposite so donnie september 15th all right so there you go another question I received short and sweet. Actually, it came in the form of a tweet to cash flow savvy.

That's why Twitter's probably so popular because it limits your response to 140 characters. And I got this from John Tyler, Realtor, at John Tyler, realtor, and he tweeted, I can't find the info for the Grub and Grow Rich event in Atlanta. Can you help me out with the link? So, yes, John, I can. The date for that event is October 16th. However, we're doing another Grub and Grow Rich event in Long Beach, September 10th. So that's about a month before the Atlanta event. And right now the link,

the grub and grow rich.com link that goes to the Long Beach event just because it's first. Because of the system that we're using to host these events, I'm unable to forward that link to both places at the same time so you have access. But we are creating a page on the cash flow savvy website that will show all event dates. So that should be done within just a few days. So in a few days, just go back to grub and grow rich.com, do that again, and you should be redirected to the corresponding page on the cash flow savvy website. And you can access and register for the Atlanta event there. All righty?

So thanks for asking then, John. Now, big announcement. I've got a really big announcement for you. Over at epic wholesalers, epic wholesalers. Epicholsailers.com. I mean, it's so new that I haven't even had a chance to update the info on the website yet. but this info does go into effect immediately, immediately, okay, effective immediately. I've recently added a few new big buyers to my private buyers list of which what that does

is it significantly expands the territories of which my list will now buy from. So in addition to what's already listed on the epic wholesalers.com website, territories of which they are ready to pull the trigger and buy ASAP also you can add to that list are Texas Louisiana North Carolina Tennessee Georgia South Carolina Alabama Alabama and all parts of Ohio now within those states they are looking for this is very important you might want to write this down if or it'll be on the website shortly in a few days they are looking for single family residents only, only SFRs, okay? Minimum three bed, one bath, at least 800 square feet with a central heating system.

That's important. If it doesn't have a central heating system, you need to indicate that so they can factor that into their estimated repairs. Okay, so central heating system is important to them. It must be located within 60 miles of any major metropolitan area, any major city, town, or village with at least 10,000 residents. So that's pretty big. That's most areas in those states. Okay, so that's pretty large area. And it must be priced between $20,000 to $70,000.

That's the price point they're looking for. So they're looking for that blue-collar neighborhood, okay? Let's try and stay out of the war zones, but let's find those nice people living in those blue-collar neighborhoods priced between those $20,000 to $70,000. Okay. Now, a few more things. The property must comply with all applicable legal requirements,

including building, zoning, environmental, occupancy, habitability. That's a big word. Lots of syllables in that one. So they've got to make sure you can live in it safely. And it's to code. Okay, so that's really important. So no funky add-on, stuff like that.

The property must have the right of access to paved public roads, served by water, sewer, septic, and all public utilities. So no tree houses. Okay? And then the property must be free from material structural defects, severe termite damage, pest and rodent infestation. They don't want the bugs or the rats, all right? So that's their criteria.

And here's one thing. One thing that's actually a must. And this one is non-negotiable. And I say this on the registration video of the epic wholesalers.com, that video that's right there on the website. And I say it in the details of the buying criteria. It's written down as well in a couple places on the website. And I've said it here.

several times on the show for a property to even get consideration to be distributed to my list, to even get considered, you must have it under contract. No shortcuts, okay? You got to do the work. That's the only way I can comfortably and confidently present it to my list, okay? So you must have it under contract. Not sure what that, we're aware of the, it's been such a difficult point to get across, but the property, you know, if it's a friend of a friends or a really close friends or your cousins or your parents, whatever.

That doesn't fly. Even if it is your cousins or your really close friends, you know the guy really well, you know the lady really well. The property must be under contract. Okay, no if-ands or buts there. So if that looks like something you want to tap into, if you're not registered over at Epic Coal Sailors, and you've got properties under contract that you want to sell and you're open to a quick all-cash closing, go check it out, okay? since launching Epiccoelsailers.com, I've been able to help so many of you get started and get

into your first, second, third paycheck. Some of you just made a business out of borrowing my buyer's list over there. I'm fairly certain we've purchased more than 100 properties from the Epic community within the last year. So if you don't have a buyer's list of your own, you can borrow mine until you do. All righty. So go to Epiccollaselers.com for details. And let's see what else. Got another email, a great email from Eddie Bales and Eddie Wright's. that, I just listen to five habits that guarantee your real estate investing success. That would be episode 116. That was our last episode, last Monday.

I'm a real estate agent and an investor, quote, or in parentheses, it's got wannabe investor. I've listened to many podcasts and watch videos on real estate investing, including yours. I'm always thankful for the information expertise provided in your podcast and videos. I'm writing today to specifically thank you for episode 116. This is the most concise and formative podcast that I have heard. You summarized how to be successful as an investor in just 34 minutes. Thanks for the best real estate investing podcast ever. Best regards, Eddie.

P.S. I listened via Stitcher. Otherwise, I would have left this as a review on iTunes. Well, thank you very much, Eddie. Thanks for that. That's an easy email for me to respond to. Thank you. Thank you very much. I'm glad you got something out of that.

I didn't realize that's exactly what it said, but you never know how it's going to land for people. and I'm glad that that was a help to you. If you missed episode 116, it is still there. You can go back and get it. That's the last Monday. Oh, and if you do listen via Stitcher, you can leave reviews at Stitcher as well.

They accept those as well, so that would be great help too. All right, Aisa, thanks again. If you want, you can just go copy and paste that right over there. I'd really appreciate it. So now, let's talk about the subject of today. Let's talk about how to buy deeply discounted property and sell it for a profit even,

using none of your own money or credit, even that. Okay, we're going to cover all that. And I also want to cover as to why people will always sell you property at a discount, regardless of what the market is doing. And I also want to cover why anyone would sell you their property at a deep discount when they could sell easily, you know, they could just call a realtor and just list it with them and get close to fair market value relatively quickly, right? I mean, why would anyone sell you their property at a deep discount when they can just call a realtor?

I get that question all the time, so we're going to answer that today. So let's answer this how to buy deeply discounted property by starting at the beginning. Let's just break it down really simple. Let's go back and let's explain this like, you know, like a fifth grader would understand it. Okay? Start at the beginning. So you begin the process as the buyer slash investor. Okay, you are a buyer.

You are looking for a property to buy. That's what makes you a buyer. And you are also an investor. You are specifically looking for a property to buy that will eventually result in a profit for you. Okay. So the buying process is where investors make their money. They make that our money during the buyer's process. They make it right there at the beginning.

Okay. And you may have heard that expression before. You make your money when you buy. You make your money when you buy real estate. You've heard that before. Maybe you've heard the second part. Maybe you haven't. It's not as commonly referenced.

So you make your money when you buy real estate. real estate and you get paid when you sell it. Okay? You get paid when you sell it, but you make your money on the front end. You make your money when you buy. It prevents you from getting lost in the semantics of this expression that there's one basic principle you need to know. Buy low.

Okay? Buy low. The lower you buy, the more money you make. Keep it simple. Keep it really simple. Buy low. That's the initial objective. So how low?

What is low? Well, buy lower than your expected sale price. Okay, buy lower than what you can sell it for. Very simple. You know, the difference between what you buy it for and what you can sell it for, that's referred to as equity. That's the spread. What you bought it for and the amount that what you sell it for, that part in between that's called equity. And when you do actually sell the property, that equity manifests itself into profit.

Okay, money. Now, the profit is for you to keep. That's how you make your money as an investment. I told you we're going to keep this really simple. So just buy low, sell high. That's your job. It's the very definition of an investor. I told you this was going to be simple, okay?

And if you're in fifth grade, hopefully you're following me. Buy low, sell high. So now that we're clear on that, let's move on. The real work begins when you start looking for a property that you can buy for a price that's lower than what someone is willing to pay for it. Okay? That's when the real work begins. The question that I mentioned earlier, that always comes up for a new investor,

is, why would anyone sell their property to me at a low price if they can sell it on the open market at a higher price? Okay? Perhaps you've thought of that before. Like, why would they even do that? I certainly wouldn't. Why would they? Okay?

So here's the answer. Not just anyone will sell you their property at a discount. Okay? It's not everyone. Not everyone will. Not anyone will. Okay? Most property owners actually,

will not. They won't. But you are not looking for most property owners. Got it? You're not looking for them. You are looking for property owners who are experiencing some sort of life challenge or adversity that selling their property will solve or alleviate. Got it? That's who you're looking for. The people that won't sell you their property to discount, you're not looking for them. You're looking for the people that will. And what causes them to sell their property to you at a discount is some sort of life challenge or adversity that selling their property is going to solve for them. It's going to alleviate that stress for them. So in short, you're looking for property owners with problems like job loss, that type of problem, job relocation, divorce, late mortgage payments, delinquent property taxes.

They're retiring. They're getting out of the business. Or they've got a distressed property or properties. You know, they got it, they're sick or that someone just died and they inherited the property or any number of things that life may throw at a person that can cause some sort of financial distress. It's pretty simple. Okay, just look for people with problems. You're going to buy low, sell high, and you're going to do that with people that have problems. All right? So, like I said, previously that your job as an investor is to buy low and sell high. That is true. Don't lose sight of ever, okay, you're not going to be in business very long if you're buying high and selling low. Okay, you want to buy low and sell high. But now, I want you to think of your job as an investor

in a more empowering light. Think of yourself as a problem solver. You are a problem solver. That's how the most successful millionaire real estate investors think of themselves. If you maintain a mindset that you are a problem solver, many of the challenges you will face in this business, won't necessarily be challenges, maybe inconveniences, but they won't be challenges. If you keep it at front of mind that you are a problem solver, answers seem to just magically appear, some quicker than others, but they appear because you are a problem solver. That's what you're taking on. It is your job to help property owners solve their life problems.

And there are three reasons for this, okay? There's three reasons you want to help people solve their problems. One, people with means should help people with their life problems. It's noble, okay? It feels good. It's the right thing to do. It's how people should treat each other. All right, so that's number one.

Number two, life problems, they happen every day. There was another one. Did you feel it? There was another problem. Just happened out there in the world somewhere. There will never be a shortage of opportunity to help people, okay? Life problems that happen every day to people. Three, property owners with problems will exchange their equity

for peace of mind all day, every day, and twice on Sunday. All right? And this is key. This is key to getting deeply discounted properties. So I'm going to repeat it. Property owners with problems will exchange their equity for peace of mind. They will give you equity. They will sell you a property at a discount.

They'll give you equity in exchange. for you solving their problems, for giving them peace of mind. Got it? If you don't, I can make it even simple. Okay, let me break it down. People experience problems every day. You solve people's problems. People will give you equity to solve their problems.

Got it? Happens every day. That means there will never be a shortage of opportunity for you to acquire equity. Regardless of market conditions, they'll never be a shortage. shortage in that opportunity. There's no such thing as good markets or bad markets. There are only up markets and there are down markets and you can profit from both. Relatively speaking, there's always a low price at which to buy and a high price at which to sell. Always. Don't let the market conditions or the media influence your decision on whether to invest

or not. As long as you can solve the problems of property owners, they will always give you equity in exchange. Got it? Now, the strategy of how you cash in that equity, that might differ with the fluctuations of the market, but property owners will always give up equity to the person, you, the investor, who can make their problems and stresses disappear. Got it? So embrace the concept of exchanging equity for peace of mind, and you and your family will never go without, not financially. Got it? So as the real estate investor, your mission is to find property owners with problems. From this point forward, I'm going to refer to these property owners with problems as motivated sellers.

You've likely heard the term motivated sellers before. Well, that's what it means. Their motivation comes from their problems. You know, motivation has a positive connotation in our nomenclature, in our vocabulary. But when it comes to motivated sellers, their motivation comes from a different place, not a good place. It comes from their problems, okay? Now, you will connect with motivated sellers in one of two ways. You will either initiate the contact or they will. Okay? You either going to hunt for motivated sellers or you are going to fish for them and allow them to contact you first, all right?

So I've gone over the specifics of how to do this step by step in so many past episodes, and I go over it visually inside the free course. I go over it there step by step, and I share even more details in the new version of the free course. So I'm not going to do that here. I'm just kind of laying out how to find these deeply discounted properties. And I want to do it from just the absolute basics. So this question is never answered again. So there's no misinterpretation or misunderstanding.

Okay. So once you've found and made contact with a motivated seller, you will have a conversation to determine whether or not a fair exchange of equity for peace of mind. can be made. Okay? If not, if there is no room for an exchange, if your, if your solution isn't going to provide them peace of mind, so they'll give you their equity. If not, you're just going to part ways, and then you'll make contact with the next

motivated seller to see if you can solve their problem. Okay? By the way, most of the conversations that you have had with motivated sellers and that, or that you will have, will not result in a deal. It's not. most of those conversations will not result in a deal, and that's perfectly okay. You simply move on to the next motivated seller, and to the next, and to the next, and eventually, you will meet a seller with enough motivation where a deal can happen.

Keep this in mind because it's key to your mental state and ability to persevere. The foundation of every deal lies within the seller's motivation to sell. Simple. So, if you couldn't make a deal, the sales. seller didn't have enough motivation for you because the foundation of every deal lies within the seller's motivation to sell no deal huh that's okay there just wasn't enough motivation for you don't worry though you will find someone they are out there in abundance problems are happening every single day to people they are happening every single day now when you do find that motivated

seller, you will come to an agreement on price and terms, and you will put the price and terms in writing on what's called a purchase agreement. Okay, it's just a contract between the buyer and the seller. And the details of that agreement will include your name, the buyer, the seller's name, that's the owner of the property, the purchase price, and then the terms of the purchase. And once you and the seller have signed the contract, you will take that contract to a third-party intermediary. Now, depending on what state you live in, that intermediary could be an escrow company.

a title company or an attorney, they'll perform essentially the same duty. And their duty is to make sure that the transaction is conducted fairly, transparently, and legally. They're a third part of the transaction. Okay? They're an objective party. They're there to make sure everything goes down right, how everyone agreed to it and how everybody understands it. All right. So I like to call this period while we're in escrow, while we're trying to, uh, while we're

going to close before we close this deal. call this period the problem solving period. The problem to which I'm referring here, though, is it's not necessarily the seller's problem. I'm referring more specifically to the property's problems. Now, this problem solving period, which is formally called the escrow period, can take as little time as just a few days, maybe a day or two, or up to six months or even more. Okay? The escrow period will vary from deal to deal and is agreed to up front between the buyer and the seller, and it'll be noted in the purchase agreement as part of the terms. Now, here's what many people don't understand.

You see, when you and the seller signed the purchase agreement, what that did was it transferred certain rights from the seller to you, the buyer. Okay? Just by entering the contract, now that you have an agreement with a seller, you, the buyer, have some rights to the property. And these rights are called equitable rights. And one of your equitable rights is the right to inspect every aspect of the property. You have the right to do that before you close, before you finalize the sale,

before you finalize the exchange. All right? So you have the right to inspect every aspect of the property, the foundation, the physical structure, the legal history, the neighborhood, the school system, you know, you name it. and everything. Now, you have the right to inspect every aspect of the property that could directly or indirectly affect the property's value. Again, once you and the seller have entered in the purchase agreement, you have the right

to inspect the property for a defined period. And we call the inspections during this period. We call that due diligence. And you're going to hear that term a lot. If you haven't heard it already, you're going to hear that term a lot in this business, due diligence. And it sounds terribly official, but don't let us scare you. It's just a fancy legal phrase for inspection or investigation.

Okay. So once your inspection period is complete, you have three options. Okay, you've inspected the whole property and now what, right? You're in the middle of escrow. You're done looking at the property and looking at everything. You looked at the ceilings and you looked at the foundation. You looked at the title. You looked at the school system and checked out the crime rates or whatever you did.

You inspected every part that was important to you. You now have three options. Okay? option number one you can cancel the contract and walk away if you don't like what you found okay that's how if you got a good contract that one i give you what give you in the free course you can cancel the contract and walk away if you don't like what you found okay just walk away two you can follow through and complete the transaction that's your second option or three you can go back to the seller for a second round of negotiating

I don't talk about that, but let's talk about option two. If you chose option two, then it's time to buy the property now. Okay? Whoa, whoa, Matt, I didn't think I needed any money for this approach, right? How can I buy this property if I don't have the money to do it? Well, if that's what you're thinking, it's okay. Relax. You see, up to this point, have you needed any money to buy this property?

No, you haven't, have you? I mean, up to this point, just about every real estate transaction looks relatively the same. You found the deal, right? You put it under contract, and you completed your due diligence. When were you asked for money? Have you needed any money yet? You haven't, have you? What a lot of people don't understand.

They think they have to have the money before they take those first three steps. No, you haven't needed any money up to this point. Now, once you get to this point, though, this stage is where your exit strategy comes into play. Okay? You know, remember those equitable rights you received when you enter the contract. When you enter the contract with a seller, you got those equitable rights we talked about, and one was to inspect the property. Well, another one of those rights is the right to market the property.

You see, as soon as you get assigned purchase agreement from the seller, you will immediately start looking for someone else to buy the property. Okay? You're going to immediately start looking for someone else to buy the property, even before you could start at your due diligence. You're going to look for somebody to buy the property. So the no money required that statement. It's not entirely true.

You'll almost always need money to buy a property, but it never has to be your money. No one said it had to be your money. You see, when you find a buyer for the property, you're going to use their money to buy it. It could look something like this. Let's say the price on the purchase agreement is $100,000. And $100,000, that's what you've agreed to pay the seller for their property. But while you were conducting your due diligence, you found another buyer, whether it was on by posting a classified ad or you found it over at epic wholesalers, wherever it may be, a buyer beside yourself who is willing to pay $110,000 for the property. You have an under contract for $100,000.

You found a buyer willing to pay $110,000 for it, $10,000 more than what you paid for it. Well, see, then you would then introduce that buyer to your third party in a mediary, your closing agent, and you'd use their money, the new buyer's money, you'd use their $110,000 to pay the seller. And you get to keep what's left over, the $10,000 in between. Okay? That's a typical wholesale deal, and that's one of the strategies I show you exactly how to do in the free course.

Okay? So that's the anatomy of that deal. And that's how you do it, how you find the deeply discounted property and how you do it and make money off it without using your own money or your own credit. No banks wherever even are mentioned here. You don't need the banks. Okay? So you just, while you put the property under contract and the first thing you do once it's

under contract, you'll start looking for a new buyer. And then you conduct your due diligence. And once your due diligence is complete, now you have the option to do you if you want to move forward or not well if you got to that point and you haven't found a new buyer then you cancel the contract and you walk away no risk you don't need any money up to that point okay so that's how you do this how you find deeply discounted properties and do it and make money doing using none of your own money or none of your own credit now let's back up a little bit let's say let's find a deeper discounted property how about that let's back up let's say when you

completed your due diligence you didn't like what you found Maybe you even have a buyer ready, but she didn't like what you found in the due diligence. You know, there was something in there that was like, wow, this is a surprise. But it wasn't enough to kill the deal, right? You might have just found something that's going to take some additional money to fix. No big deal, right? At this point, though, you still have the same options. You can cancel the contract and walk away.

You don't want to put up the money to pay for that. Or you can go back to the seller and ask them to share in the newly found liability. I love this phrasing. Share in the newly found liability. It sounds so much nicer than I need you to lower your price, right? So let's say you found a significant issue with the electrical and the property, just for example. And let's say the electrical, it wasn't in code and it presented a potential fire hazard. Okay, so your conversation with the seller might go something like this. Mr. Seller, I've just completed my due diligence and it looks like the property definitely will. work for either me or one of my partners. However, there is one issue with the electricity that the inspector found and a contractor was able to confirm. The cost for repairing this issue has put your property a little bit beyond what the market will allow. So here's what the contractor estimated the repairs at. And for me to move forward and help you out of your situation, I'll need you to share with me in this newly found liability. Are you open to reducing the purchase price by this amount

plus labor and a 10% buffer for any incidentals. Are you open to it? There. That's very simple. It's friendly and it's an effective method for asking for an even deeper discount, getting an even deeper discount of property. But let's go over that really quickly. It's more than just asking, okay?

Many of the words and phrasing that I used are very deliberate. Okay, it starts with Mr. Seller. I've just completed my due diligence and it looks like the property definitely will work for either me or one of my partners. Now I used, and it looks like the property definitely will work. I'd said that it looks like it will definitely work to give the seller some confidence that the deal is probably still going to happen. It's going to be on a condition, of course, but it's probably still going to happen.

I don't want to scare them too much. I just want to raise some concern, okay? There's going to be a condition. And then I used for either me or one of my partners, right? You see, with one of my partners actually being. that other buyer, the other buyer that I've got waiting for this property. You see, I'm reminding and I'm prepping the seller that I have the right to assign the contract. So then I mentioned an issue that the inspector found.

Not me. I didn't find it. No, the inspector found it. But the inspector found it and a contractor was able to confirm. Not me. I'm not confirming it. I'm just saying I got a second opinion and the contractor agreed. Not me, but a contractor.

And what this does is it keeps me on the same side of the seller. You see, it's me and the seller against the inspector and the contractor. It's me and the seller trying to solve together the seller's problem. So it's me and the seller against the inspector and contractor. But then to take the emphasis off of them so we're not sitting there battling directly with the inspector in the contract, contractor because you could easily say, well, it's fine another inspector, it's fine another contractor. You could make all kinds of arguments about that.

I said, to take the emphasis off of them, the estimated repairs is a little bit beyond what the market will allow. So it's not me and the seller against the inspector and the contractor, actually. It's me and the seller against the market. Can't argue with the market conditions. The prices are what they are. People are paying for property what they're paying. And even further, the condition on the deal going through was stated as,

in order for me to move forward and help you out of your situation, I'll need you to share with me in this newly found liability. In order for me to move forward and help you out of your situation, I'll need you to share with me in this newly found liability. So I'm still a problem solver and I'm helping the seller out of their situation and we're going to share in the liability. See? We're sharing because we're partners in this.

It's me and the seller against the market. It's you and me against the world. It's the seller and I against the world to solve the seller's problem. We're partners, so we're going to share. And then I asked if he was open to reducing the purchase price by the amount of the bid plus the labor and a 10% buffer for any incidentals. See, the first part of this is I asked if he was,

open to it. And that's a very strategic phrasing. It's what's called a release statement. See, if you want to get a true yes during a presentation or a negotiation, you have to give the person you're asking the ability to say no. That's how you get a true yes. You must give them the ability to say no. And that's what leading a question with, are you open to it, does?

Okay. Another example of that is, does it make sense? sense to, blah, blah, blah, blah, blah. By proceeding your question with, are you open to or does it make sense to? It's a release statement. It gives the person the ability to comfortably say no. And if they're comfortable to say no, they will say no. But if they're saying yes, you know it's a true yes and you're not going to get an objection somewhere later down the road. Okay. So the second part of this question is I asked for the price reduction. I asked for the price reduction in three parts, right? I asked for to share with me in the bid for repairs, the labor to

perform the work, and a 10% buffer for incidentals. So I asked the seller to pay for everything, didn't I? And then some by asking for that 10% buffer. I asked for, but I broke it up into three different parts. I split it up so if the seller doesn't agree, say, to the entire price reduction, my follow-up could be, well, how about just the parts and labor? And I'll go ahead and I'll assume the responsibility and risk for any incidentals. You see, by asking for multiple things, it gives you options in the negotiation. Okay? It gives you room to negotiate.

So depending on what the seller agrees to, you decide whether it's good enough or not to meet your own minimum deal standards. And then you, again, can either cancel the contract if you know you didn't get a big enough reduction. or you can accept the seller's concessions and follow through and close the deal how I previously described. Got it? So let's recap that. One, you find deeply discounted properties by locating sellers with problems. And sellers with problems, we call them motivated sellers.

And we know problems happen every single day, don't they? Absolutely. And we know that sellers with problems will exchange their equity for peace of mind, for you to solve their problems. Okay? And you know that you'll always be able to invest in real estate because people always have problems everywhere, every day. Boom. Do you feel that?

That was another one. It just happened. Come on. Stay with me. It keeps happening. It's happening all the time. And three, you can get even deeper discounts by asking for additional concessions after you complete your due diligence. That's an option.

That's how you find deeply discounted properties. That's how you buy low and sell high using none of your own money. or credit. You use somebody else's money to do it. And they're going to gladly do it because you found a deeply discounted property. You did something that they can't do. That's why they're going to pay you more for it

because they can't do it themselves. Got it? Good. All righty. So that's it for today. I'm Matt Terrio. Living the Dream. You've been listening to Epic Real Estate Investing,

the world's foremost authority on separating the facts from the BS in real estate investing education. If you enjoyed this show, please take a minute to visit iTunes and share your thoughts. Thanks for listening. We'll see you next time here at Epic Real Estate Investing with Matt Terrio. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.