Epic Real Estate Investing - How to Present an Offer | 317

Episode Date: December 4, 2017

Epic Real Estate Investing shares a simple rule for success in real estate investing: the more offers you write, the more deals you are going to do. Here’s exactly how to present an offer. Ready to get sellers on your side? You are in the right place! ______   The free course is new and improved!  To access to the two fastest and easiest strategies to a paycheck in real estate, go to FreeRealEstateInvestingCourse.com or text “FreeCourse” to 55678. What interests you most? • E.ducation • P.roperties • I.ncome • C.oaching     Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Broadcasting from Terrio Studios in Glendale, California, it's time for Epic Real Estate Investing with Matt Terrio. What's up? Hello, and welcome to the Epic Real Estate Investing Show. So glad that you found us. If you're looking to create financial freedom and independence in your life, I want you to know that you're in the right place. You know, if you're feeling parental pressures about going to college or if you're feeling peer pressure about just, you know, getting a real job, if you're concerned about just finding

the right education that's going to make all the difference, if you know you're, if you know you're on the right track and just kind of misunderstood by your family and friends, you're in the right place. If you're unfulfilled in your current career, if you're, if you flat out hate your job, or, you know, if you're just tired of someone else telling you what to do and when to do it, when you can take your lunch break. and whether or not you have to work on the weekend and when you can take your vacations.

You know, if you've got some serious doubts about the future and specifically your financial future, I want you to know you're in the right place. If you're looking for proven strategies and systems to accelerate your journey to a comfortable retirement, or at the very least, accelerate your journey to that place to where you've got the option to retire. I want you to know you're in the right place.

If you're ready and willing to roll up your sleeves, go to work and create a reputation as a badass real estate investor, you are in the right place. So in real estate, there's a very basic rule, and it's an obvious one. And that's what I want to talk about today. It's really obvious. And it's so obvious it's often overlooked. And that is, you know, you're just never going to do a deal unless you write an offer to purchase.

I know it's simple. I told you it was obvious. If you're not writing offers, you're never going to do a deal. And I want you know, the more offers that you write, the more deals you're going to do? Imagine if you just woke up each and every day and said, today I'm going to write an offer. Who's going to be the lucky individual that's going to get it? What if that was your attitude every day? And at the end of the year, you wrote 365 offers. How many more offers is that than you wrote this year? And how many more deals based on the ratio that you've had this year? What would that

turn into? I mean, how could you not do a deal by writing 365 offers in a year? Right. So the more offers you write, the more deals you're going to do. And the better you are at making those offers, the deeper your discounts are going to be. So, this is really important, the really important episode, perhaps the most important aspect of your business we're going to cover today. Because if you do everything right up to this point, you are flawless up to this point. It can be all for nothing if you're not presenting offers, if you're not presenting them consistently, if you're not presenting them with any sort of persistence. It can be all for nothing.

And if you are presenting them and you get this part wrong even, this business that's going to be a real struggle. Your progress, it's going to come slow and you're going to be budding heads with sellers. I mean, they're going to resist. And ultimately, you're going to get burned out. And right, you're going to run right out of the business and back into the arms of your next job. Right back into the arms of your next boss. But if you get this right, if you present you. offers the right way. Sellers, they're going to be easy to work with. Your deals, they're going to come

easier. Your transactions, they're going to move forward faster. Sellers will actually cooperate to help you close the deal. Imagine that. And ultimately, the seller will sign the contract and you'll be in position to exit for the highest and best profit for yourself at that very moment. All righty? A client of mine, Samantha, she's a great example of getting control of her deals. Of course, presenting offers, and specifically, it's in her presentation, how she presents her price and terms. She lives in Des Moines, Iowa. She invests in Des Moines.

She just got married recently, and she's been a full-time real estate investor for almost a year now. And, you know, when we met, she was working as a real estate agent and very tired of buying and selling real estate on other people's behalf. We had a lot in common because that was kind of what launched me into being a real estate investor. I just got tired of watching other people buy and sell. and she really just wanted to quit the agency part of the business and transition into an investor,

into that investor aspect of a business where she's buying and selling for herself on her own behalf. You know, she wanted to make more money with nobody to answer to but herself, understandable. And she almost didn't join the badass investor program because she thought she knew enough as an agent that it would translate easily into investing. And she quickly discovered that to not be the case. there's very little overlapping area between real estate agent and real estate investor. And a lot of people think that they're really close to being the same thing. And they're just not.

One is one is an investor. You got to buy low. You got to sell high. And you got to make money. And it's dependent on how you buy and how you sell. A real estate agent, very different. You're just a customer service representative. You are buying and selling, representing somebody else on the buying and selling of their behalf.

Okay. So a very different, two different world. So once we got past that, here's what she did. We had to get her outside the box a little bit and had to get her to stop thinking so conventionally as realtors do. And how to get her thinking more creativity or creatively, creatively. Creatively. And then we really dialed in her presentation as a buyer of real estate, as opposed to a lister of real estate. She's going on meetings with sellers to buy their property, not to list their property.

not to list their property for sale. And so when we did that, here's what she got. She went from listing a few properties a month to buying a few properties a month. Seemingly, not a really big difference in workload, right? Actually, it's not a big difference in workload. But her profit went from 3% commissions, like $3,000 per listing, to a minimum of $10,000 per investor deal. You see, with just a little shift in how she presents her offers,

She increased her profit by 70% without increasing her workload. She's making more money by doing the same amount of work. Pretty badass, right? So I've got five hot principles for you today to focus on with regard to presenting your offers to sellers so you can become a badass too. All right. So number one is alignment. Number two is the interview. Number three, price and terms.

Number four, multiple options. number five follow-up right so alignment the interview price in terms multiple options in the follow-up so out of those five which one do you need the most which one do you need the most which one of these are you most intrigued about well let's go over them and then maybe if you don't have an answer right now maybe you have an answer later okay so um we're going to go over yours as as whatever you came up with right there good we're going to go over that as well as the rest of them okay so alignment number one alignment this is very simple and if you're you're going to you're you're going to you get this part right, so much of the following kind of takes care of itself. I mean, if you really

get this part right, the rest of it's pretty easy. And that alignment being, first, knowing your role in the transaction, and your role is that of a problem solver. That's your role. Okay, I mean, you've done your marketing up to this point to find property owners with problems. Now it's up to you to solve their problem. For if you do, they're going to give you equity in exchange for the peace of mind that you're going to give them. Got it? So that's the first part. Know you're all as a problem solver.

Second part of alignment is to align yourself with the seller, right? You two are on the same team. It's not you versus them. It's you're on the same team. It's you and the seller versus the market. The market is the enemy. The market is the bad guy. The market is the bad cop.

You're setting out on this journey to beat the market so that you can both get what you want. Got it? The seller wants the problem to go away. and you want to discount on the real estate. The only person going to get in the way or the only thing that's going to get in the way is the market. Very simple. And if you truly align yourself this way,

if you position yourself in the transaction this way, the right words, they're going to come to you. You're not going to have to think of a perfect script. If you're coming from the right mindset, the right words are going to come to you, the right actions are going to come to you. The entire process is just going to be so much easier. All right.

So that's number one, alignment. Number two, the interview. Okay. Again, this is very simple. And what this interview is for is, this interview of the seller is to find out everything that the seller knows about the property and probably most importantly to uncover and discover their motivation. The reason as to why they are selling. What's the, we'll call them motivated sellers.

What has them motivated to sell? Because the foundation of every deal lies within the seller's motivation to sell. And once you've uncovered that, I mean, it's like, boom, it's like discovering gold. and once you've discovered the seller's motivation and provided a solution for that specific motivation, you can almost name your price for the property. Now, it's a little easier said than done, meaning most sellers kind of hold their motivation close to the vest, right? They're not going to necessarily reveal their motivation, not up front for sure. And sometimes that's intentionally.

Sometimes it's unintentionally. Sometimes they need a little bit of help to really discover why it is that they're selling. you know so it's not going to be just all uncovered on that first time just by asking like mr seller what's your motivation for selling and you're all done no it doesn't work that way so you're gonna have to ask many times in multiple different ways and and the first time is way back when you first started talking to them when they very first called and you asked hey why me why now or you said what can you know can you tell me about your situation why are you calling me now what's what's important like what was big about my my postcard or my letter or my sign or my ad and why not you know

now. That's the beginning. And it doesn't stop. So that is the very beginning. That's when you start uncovering this motivation. And, you know, for example, when you, when you, they tell you their situation, you know, you've got to go deeper in their interview. Well, I've got, I lost my job and I got move. Okay. So, you know, the follow-up question is, wow, can you tell me a little bit more about that? Why do you have to move? You know, or why do you have to sell the property? Can't you just hold on to it? Or how does that make you feel having to get rid of this property? Or how long has this been an issue. How long have you lost? When did you lose your job? How long have you been thinking about this? You know, what type of impact is this going to have on you personally? Those are impact questions

or open-ended questions. They call for more than just a one-word answer and they go deep. And they call for the seller to, you know, just to really dig deeper to reveal their true motivation for selling their property. All right. So the start, you start right at the beginning. And when you meet the seller, it continues. And then when you tour the property, it continues. For example, in our seller information, questionnaires, we're asking about bedroom count and bathroom count and square footage. We're asking about the mortgage information, everything that, all the different issues with the property, right? All the tangible issues, I guess.

Then we pepper in these questions like, you know, what's your reason for selling again? And then a little later, ask a little later, we'll ask, you know, so when do you need to move exactly? And can I ask why that date? And at the end, it's a, okay, I'm sorry, can you tell me again why you are moving? If you haven't gotten the motivation yet, can you tell me why again? So each time you ask a question like this, you're going to extract a little bit more information. You're going to find they're going to answer a little bit differently each time you ask the question.

And what this is going to do is going to help you formulate your offer. So you've got to get to the motivation, okay? You have to know how hard you can push and how likely they are to acquiesce. You find out what it is that they actually want. Maybe it's not money that they want. Maybe it's something else. So that's number two. That's the interview.

Okay, so number three, price and terms. Price and terms. So you hear me say this a lot. And as an investor, I want you to think of all of your offers by way of price and terms. You want to buy property in one of these two ways, by your price in the seller's terms or your terms and the seller's price. As long as you can control one of those, you can always create a great deal for yourself. Do you got that? Price and terms.

You need to control one of them. As long as you can control one, you can always create a deal for yourself. So your ultimate goal is to get control of one of those. if not both, but at least one. And I personally, I like to always go for the price first. I like to get equity. I mean, I'm really good with the creative financing. I'm really good with the seller carrying back.

But I would rather have the equity. I really would. You know, so I like to go for the price first with the terms being cash for the seller. So my price, the terms is cash. That's the seller's terms. Okay? So if you can get the right price, you typically will have, you know, you just have more options when it comes to your extra strategy,

as well as it mitigates the risk more as well. I mean, if you get stuck, I mean, if you got a bunch of equity in there, it's not difficult to get your way out, to bail yourself out of there. Okay. So for that reason, it's my preference to go for the price first. But if I don't get my price, I've got a full toolbox of terms of which can create smoking deals for me too. So if I've determined that I want a property for $100,000, if I figure that's going to

be a good buying price for me, and I'm willing to pay cash for that. Okay, so in the cash, that's typically what the seller wants is they want cash. So the $100,000, that's my price. is the seller's term. $100,000 is my price. Cash is the seller's term. And here's kind of an idea of how it fluctuate. If the seller doesn't want to accept that price, if they're not going to take anything less than $125,000, my response might be something like, well, okay, I might be able to get you that price. Would you be open to breaking it up into 24 payments? Or would you be open to breaking it up into 100 payments? Or would you be open to breaking up the difference

and three payments. You know, depending on what I thought my exit strategy might be. But the point here is I've introduced my terms into the conversation. They want all cash, so they can't have the price and the terms. So I'm adjusting the terms. If we're going to go up in price, we're going to adjust those terms. So instead of all one payment in cash, it might be 24 payments or 100 payments or three payments, whatever it may be.

So the seller went up 25K in price. I extended the time of which I'd be willing to pay it, that time being my terms. And as you introduce terms, you want to do your very best to use layman's terms when doing so. Kind of two different definitions of terms, right? For example, here's what I mean. If after the seller asked for 125K, 25K above my price that I was willing to pay cash for, and I replied with, I might be able to do that. Would you be open to me breaking it up, that up into 100 payments?

See, that's layman's terms. Can I break that up in 100 payments? Or how many payments can I break that up into? That's layman's terms. as opposed to, can I pay you over the next eight years in principle-only payments? Got it? That's what I mean by price and terms. So that's number three.

And try and use layman's terms whenever you can. Number four, multiple options. Multiple options. So if I'm unable to come up with an agreement at the appointment, if I'm unable to come up with an agreement in that fashion, like I didn't get my price and I wasn't able to get my terms either. Like we just couldn't find a meeting of the minds there. I like to leave a three-option letter of intent. Okay, it's just a letter of intent of how I'm willing to purchase the property, and it gives three different options.

So option number one is going to be that last cash offer, wherever we ended, whatever was closest, okay? So my version of that offer will be number one, plus I'll give them two additional options, a combination of different prices and terms, all of which would be a good deal for me. And all of these are ways of how I'm prepared to purchase the property. So it's in there,

interest, this is all in the interest of keeping myself in the conversation. So the conversation doesn't die. So it gives me a door to walk back through when I need to follow up, which is the next one that we're going to talk about. But it's just a way to introduce even more creative structures to the seller without overwhelming them, to get their wheels turning, to get, to get their creativity, their creative juices flowing. Okay.

So with this said, there are two different schools of thought on this. You know, my buddy and co-trainer at Epic, Jeff. Jeff Garner. He doesn't like to leave a written offer behind. No, because he doesn't use the three-optional letter of intent. He just goes straight for all cash and tries to get the lowest price he can. And so he doesn't like to leave an offer behind because he feels if he does, the seller's going to use that offer to shop other investors, other buyers. So you know this is like my best case scenario. Let's see if I can just go out there and find somebody that'll beat it. And so that's his position. And there's nothing wrong with that. It works well for him.

I like to leave something in writing behind because I've done enough deals based on when the seller came to their wits when they finally came to reality. They called me because I was the only one that did leave the offer behind. So these are just two different opposite ends of the spectrum. So there's no right or wrong way to do it. I just say pick one and just do it. If you want consistent results, pick one way and do that way consistently. Don't overthink this. Okay.

You can't make a wrong answer. I just want you to pick one and be consistent with it. And make sure that your offers are in writing. If you're just going back and forth verbally and you're not coming to any agreements, I got to tell you, once you put it in writing, it changes the dynamic incredibly. Okay? Everything changes. The whole mindset shifts once an offer is in writing.

And even if you want to take on Jeff's strategy, put it in writing, show it to them. Just you're not going to let them have it unless they're going to sign it, okay? But always in writing. And which approach you choose, it's likely going to depend greatly. I think on the amount of leads that you are generating. If you got lots of leads, the fear of loss in either one of these scenarios, it really disappears. Okay, so that's number four, all right?

Multiple options. Number five, the follow up, right? The follow up. And what I mean by that is, obviously, what I mean is following up. But why you want to follow up is because a no today doesn't mean a no tomorrow, all right? one following up. An additional bonus of the three-option letter of intent is it just makes it really easy to follow up

without feeling all weird and like you're chasing the seller. It removes all the awkwardness of it by using that and it makes it really easy to follow up. So the next day, I call back and I'll ask, Mr. Seller, I left with you yesterday. A letter of intent had three different options on there. And just checking in with you real quick,

of the three options, which one did you like best? Okay, I gave you. three options, one, two, or three. Which one did you like best? Number one, two, or three. And they're going to reply. And they might say, well, I like number one, I like number two, I like number three. Great. Would it make sense for me to put that in a formal agreement and come over and start the process? Okay. So it's a very quick question, or easy transition. If they said, I didn't like any of them. Well, I'll ask, okay, so which one did you like best? And did you like one, two or three? Which one did you like best? I mean, if you're

If you had to pick one, we're not going to say you're picking one, but if you had to, which one would you have chosen? And they're going to reply. And then I'll ask, okay, great. So how far apart are we? Okay? And so if, and then they're going to tell me, and great, if I could get closer to that, fill in the blank, would it make sense for me to put it in a formal agreement and stop by to start the process? Right.

You've heard the fortune is in the follow-up. Well, you've heard that before and multiple times because it's absolutely true. So follow up. That's number five. All right. So to recap these five hot principles on presenting price and terms, presenting your offer, one is alignment. Two is the interview.

Three, price and terms. Focus on price and terms. Go back and forth. If you just go back and forth on price, there's going to be a winner and a loser. And but if you've got price and terms, you can create a win-win scenario. That's why I like price and terms so much. And number four, provide them multiple options if you can't come to a conclusion or agreement on that first one.

And then five, make sure. that you're following up. And as you're presenting your offers, I want you to phrase everything so that it keeps you in the good cop category. When we talked about the alignment, you're going to be the good cop, the market is going to be the bad cop.

I want you to phrase everything so you are the good cop. So you're constantly calling out the market is the bad cop. Well, if the market will allow me to get that, I'd be happy to do this for you. Well, if the market substantiates it, great. We'll go ahead and move forward.

Well, if the market doesn't get in the way and market conditions don't change and the market supports it, yes, we're going to move forward. So you're always positioning it on the market. It's always contingent on the market. And so that keeps you in the good cop category, the market and the bad cop. And then I want you to phrase everything secondarily and ask questions of the seller so that it comes up to be the offer of the price in terms. It comes up to be their idea as to what those price in terms should be. It's their idea. And you can make it their idea just by the way they.

you ask the questions. So here are a few examples, okay. So after we've built the rapport and we've toured the property, I've filled out my seller information questionnaire and we're all just wrapping it up. We're ready to present the offer now. And that phraseology to keep you in that good cop category and to make the offer their idea might sound something like, well, Mr. Seller, the current marketing conditions, they got your property, I don't know, right around 100 grand. I showed you the market data there. And based off what you shared with me about the repairs needed, all the cool stuff that you pointed out,

and thank you very much for being honest about that, everything that you pointed out. And then just making room for a small profit for myself, what you're saying is we're right around $65,000. Is that right? Okay, did you get all the phraseology? So based off what the market is saying, it's right around $100,000,

based off what you shared with me about the repairs, okay, you said that the roof needed to be repaired in the bathroom faucet leaf. a little bit, blah, blah, blah, blah. And then just making room for a small profit for myself, because you know I'm an investor, and I've got to make some money on this, or else it's not going to be worth my time. I'd be a terrible investor if I didn't make any money on this. Okay? So after making a room for a small profit for myself, what you're saying is, you are saying is we're right around 65 grand. Is that right? Okay. So all that phrasing there,

it kept the market as the bad cop. It kept you as the good cop, and it made the offer their idea. Another example might be, say they said no to that. It's like, all right, Well, based off what the market is saying and what you shared with me, what is the lowest number you would accept? Got it? You're still the good cop. The market is the bad cop. And whatever they come up with was their idea. Okay, so pay attention to your words and be the good cop and cause the seller to come up with the offer themselves.

Do your best to do that. And when you do that, you get a cooperative seller and you get fast and easy transactions. and that's how you present the offer of price and terms. And I'm good at this. I've done it a lot, but I had to practice. It didn't come to me overnight. And I probably had to practice more than most people. As I wanted to, you know, I wanted to be just perfect all the time.

That's the kind of person I am. I don't like people to see me mess up. And I've even gotten better on this podcast over the last, I don't know, gosh, we're almost eight years now. Amazing. And thank you for listening so much. And thank you for sharing this with your friends and family. But in the beginning, I mean, I had to write down every single word.

Then I had to go back and edit all of my ooms and aaws and all my breaths and the awkward places. And if I, you know, stuttered a little bit, I'd have to go fix that. And I just had to be perfect all the time. And it was so time-consuming and so stressful and so frustrating. And here I am today where I write down a few bullet points and I just kind of walk right through this and don't really care how I sound. And when I look back in hindsight, I see that, wow, look at all the time I waste. I could have been very effective just by doing it the way I do it now. And same thing when it comes to my real estate.

In hindsight, you know, I've realized being imperfect was good enough to do deals. I would have made money and probably would have made money a lot sooner. In some cases, maybe being imperfect is even better than being perfect. So don't wait like I did, right? All because I needed to look good doing it. That was more important to me than my success, tragically. Most people's addiction to looking good, it gets in the way. It holds them back.

And whatever the reason is you do or do something or you don't do something is typically almost always, if you dig deep enough, it's connected to you wanting to look good or you not wanting to look bad. Okay. So you must be more committed to your success than you are to looking good. you must hold your success in higher regard to looking good. Besides, it's impossible to learn something and look good at the same time. So you got to give that up, all right? Just go out there and do it. And the more you do it, the better you're going to get, the better you're going to look.

All right, then you're going to have the best of both worlds. But the only way to get there is to go out there and have no fear of looking bad for a minute. Have no fear of making a mistake. And what you're going to find is you're going to make mistakes and you're still going to close deals and you're still going to make money. You're going to be like, golly, I'm glad I can listen to that. podcast and didn't get in my own way. Okay. It's the only way to get there. It's through massive repetition. And you're going to find that you're trying to be this professional buyer of real estate and then you're going to come to the conclusion or you're going to come to realize,

wow, these sellers, they're not professional sellers. They're just normal people like me. So I'll probably going to identify and build a lot more rapport with them if I'm just like them. Okay. So if you'd like to get a great example of this particular thing that I'm talking about and how you don't have to be perfect, I've asked Jeff Garner to join us again. at the next Epic Intensive because he is, he's great at this. He's great at being imperfect. And he's great at presenting his offers in an imperfect way and making a boatload of money doing it.

All right. So the next intensive is January 25th through the 27th. If you'd like to join us in January, I'd love for you to be there. Go to Epicintensive.com and we'll work together side by side in the live format. And you can learn from Jeff firsthand, hand, the best in the business that I know. And I've got three different people, three different guests coming to speak on different

creative financing strategies. And I have, for the first time ever, I'm going to have them on the show here over the next couple weeks, is I've got three Epic students that are going to present live on stage. They're going to share with you the lessons that they've learned from the Epic Pro Academy and how they've implemented them into real practice and then the little nuances and tricks and strategies that they've come up with, how they've made it perform even better for them. And each one of the people that are going to be sharing with you have all exited the rat race. So perfect for, it's perfect timing for the cash flow conclave.

That's the name of the next Epic Intensive. It's all about creating passive income. It's all about escaping the rat race. It's all about creating financial independence for yourself so you can retire sooner rather than later. All right. So if that makes sense to you or if that sounds exciting to you, you've got to be there. Go to Epicintensive.com.

and I'll see you there in January, already? So that's it for today. God bless to your success. I'm Matt Terrio. Living the Dream. Take care. 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.