Epic Real Estate Investing - How to Simply Analyze and Close the Deal | Episode 233

Episode Date: November 11, 2016

Epic Real Estate Investing brings you a very special episode. Start your year early and refocus your business to simply close real estate deals. With a system of deal flow and strong property analysis methods you can learn to close real estate deals with a better return on your investment. Discover easy ways you can attract buyers and investors, analyze your properties, then create an exit strategy that gives you cash and cash flow. Get more creative strategies for funding your deals so that you don’t even need your own money. Financial freedom is around the corner and lasting wealth is within reach!    ______   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. Yeah. What's up? Hello. And welcome to Epic Real Estate Investing, the place where I show people how to escape the rat race using real estate. If you're just getting started or you're looking for new and creative ways of making money in real estate, I've put together a free course. just for you, including a checklist on how to find motivated sellers.

That's property owners that are willing and able to sell you their property at a discount. So to access that free course, go to free real estate investing course.com. All righty, it's been a content-heavy week for sure. And the theme of the week has been returning to the basics, to resimplify the business, to untangle whatever you've tangled up since you've gotten started, and to start your year early, to start your year ahead of the competition, to start your year early, to seize all of the opportunity that exists in December, right when everybody else is slowing down, it's all there for you to swoop in and pick up.

All right? So as you look at your business and all these different aspects that we've looked at in all the different stages, you likely won't have to untangle everything, or maybe it will. That's why I gave you a checklist to run on each stage of your business in each episode. So regardless, stay with me. And at the end of the show, I'm going to show you how to prioritize what you do have to untangle. and what you've learned this week and what are the most important things for you to do

to reach your monthly passive income goal to keep it all very simple and consumable and to get your business in order quickly so that you can start your year on December 1st and capitalize on all of the opportunity that routinely presents itself in December year in and year out. All right?

So yesterday we left off with promoting the deal and today we're going to go over analyzing the deal and closing the deal to make sure that you haven't overcome complicated this part of the process, which is very simple to do if you're not being careful. And maybe not so much as overcomplicating this part, but second guessing yourself constantly. And I'm going to show you how to move forward with confidence in every deal you do. Now, before we start analyzing closing the deal, understand that there's a likelihood that you will be receiving inquiries from your promotions before you even hit the end of the marketing checklist.

And you'll certainly be receiving inquiries from buyers and lenders and money partners during your due diligence. So let's go over a few points on how to simply respond to those buyer and lender inquiries. Because, you know, it can be a big, giant, I don't know, it can be a big time stealer if you're going back and forth from your due diligence back to buyers, to due diligence, back to buyers, back and forth. So there are five points here to receiving and replying to your inquiries. And if you get this part wrong, you're simply just going to be spinning your wheels,

you're going to be waiting for the other people to do what they said they were going to do. You're going to be distracted by tire kickers. and ultimately you're going to waste the time, you're going to waste time and just leave all of them a bunch of money on the table. But if you get this part right, you'll be in total control, calling the shots, you're going to create a bidding war on your deals, and you're going to maximize the profit potential within each deal. So to do this right, when you're responding to these inquiries from your promotions that are running,

you're going to want to follow these five steps. One, you've got to tell them what to do. Okay, two, and I'll swing back. Let me go through all five of them real quick. You want to tell them what to do. You want to create urgency. You want to keep possibilities. open you want to counter with your contract and then you don't want to let the ball bounce twice in your

court so tell them what to do so when someone calls and asks hey this deal is still available this property still available or how many square foot or whatever um would would you take 50 grand for it like all that like you're going to get all kinds of weird things like that and all of them is not going to amount to a whole lot unless you actually tell them what to do so we're going to tell them facts your offer to this phone number or email your offer to this email address or send your offer FedEx to this address. You got to tell them exactly what to do. Don't leave it for a chance, okay?

Don't assume that they know what you want them to do. Tell them what to do. And also, like the offers have to be put in writing for them to be real. Okay, so I need to put your offer on a contract and fax it here. Okay, so tell them what to do. Two, you want to create urgency.

You want them to do it right now. And the way that I do this, by creating urgency while still maintaining a high level of integrity. I let them know I've got a lot of stuff that's brewing right now. I've got offers coming in. I'm expecting some others. I'm going to make a decision real quickly within the next 24 hours likely.

So you want to get your offer in so I can consider it. Okay? So that's why I would say I'll be making my offer very shortly. Then third thing is keep possibility open. So I'm letting them know that other offers are coming in. I'm also letting them know that I am going to make a decision very soon. And keeping possibility open is how I do this. You know, of the offers that I've received, none of them have been exactly what I wanted.

But it looks like I'm going to have to take one of them. So if you just put forth your highest and best offer and get that to me right away, you have a really good shot at stealing this deal. See? We've created possibility because if we create urgency, some people are kind of turned off if they hear they've got common. competition and they won't submit an offer. So I wanted to let them know that even though other offers are coming in, even though I want to make a decision quickly,

you've got a really good shot at stealing this deal from me. And I always like to use the word steal because they always think like they're going to get a great deal. But I say if you put your highest and best offer forward, you're probably going to beat all these other people. Okay? So that's how I keep the possibility open. Then once I receive their offer, I always counter with my own contract. I counter offer with my contract. And that's the one that's going to get executed.

all right so even if I counter back with just all the same price in terms what I'm countering back is is with my contract and with my clauses even if I just copy the price in terms that they put in their agreement okay so counter with your contract and number five and some people you might you might be thinking well yeah but they're not going to send it back or they're going to do this and they're if you got a deal they're you're not going to have a problem see remember what I said as I said you said it yesterday if you don't have a deal none of this stuff matters if you're not getting stages one and two none of this stuff matters. But if you have a deal, everyone's going to do exactly what you tell them to do.

They're going to want that deal. They're going to play by your rules because it's a deal. They want your deal. All right? So then number five is don't let the ball bounce twice in your court. Okay? And what that means is if someone sends in an offer that you think is insulting, don't just throw it in the trash.

Don't let the ball bounce twice in your court. Hit the ball back. So send them back with your contract of what you would accept, even if you're miles and miles and miles apart. Counterback, always. Don't ever let an offer die on your desk. Always hit it back. Let it die on someone else's, not on yours.

Okay? So you want to get these five steps. So when you're responding to your inquiries from your marketing, tell them what to do, create urgency, keep possibility open, counter with your contract, and don't let the ball bounce twice in your court. All right? So that is how you interact with your buyer so that they don't steal your time and how you can maximize the profit within each deal in an efficient manner. because you still have your due diligence to perform, right?

You still have to analyze the deal. Now, with each deal, you'll have a gut feeling. I said keep your options open, right? And I want you to keep your options open. But you're going to have a gut feeling from the very beginning as to what you're going to do with it. I'm not going to say just be going blindly and see what happens. No, you know what you're probably going to do with it. But I want you to keep your options open still.

I understand that, you know, each time we secure a deal under contract, we have an idea as to what we're going to do with it. So with regard to your due diligence, I recommend beginning with confirming what you're likely to do with this property, confirm that that's actually going to pan out. That's the first part of due diligence. So if you get your gut feelings, you're going to wholesale this thing, then go ahead and just confirm that it's wholesalable.

For example, if you know this is a deal, you're not going to hold and you're likely going to flip it as fast as possible. In other words, you're going to wholesale it. I'd want to confirm fair market value, the real fair market value, FMV, meaning what do you know that the property will sell for for sure in its current condition. And I'd want to confirm ARV after repair value, the real ARV. So for FMV fair market value, I like to look at the three to five lowest most recent comps of properties in a similar condition. Look at the lowest ones so that I know my worst case scenario value, what I know the property will sell for for sure

in case I get in a jam. Then I'd like to look at the three to five of the lowest comps of properties in a rehabed condition, after repaired condition. I want that after repair value. This would be your worst case after repair value by looking at the lowest comps of properties that have already been repaired. So if the fair market value and the after repair value come in and it makes it look like your deal isn't the deal you thought it was,

so you want to go confirm your initial exit strategy and obviously if everything checks out, you're going to execute your exit strategy, that first one. But if it doesn't, then I'm going to recommend. recommend rather than going and just ditching it or whatever and saying, hey, this doesn't work and spinning your wheels and trying to find a buyer for a deal that's not even there, I'd recommend you start analyzing it for alternative extra strategy. So don't throw the deal away just because it didn't fix into box number one.

That's what I'm trying to say. You've got other boxes of which it might fit. If it does pan out, I'll typically not do a physical inspection. Because if the wholesale deal does pan out, I typically will not do a physical inspection because your buyer is going to do that anyway. It'd be redundant because they're not going to trust your inspection. If they're a good investor, they shouldn't. So they're going to conduct their own inspection, so I don't do that.

And if this was your intended exit strategy wholesaling in the worst case scenario, fair market value and after repair value pan out and confirm your deal is an actual deal, you're not going to have any issues in finding a buyer anyway. Focus on maximum exposure and promoting your deal and you're going to be just fine. Now, if this deal analysis didn't pan out, I'd start analyzing for alternative exit strategies. For example, should I fix and flip this property myself? You know, if I thought that were a possibility, I'd probably get a few contractor bids

to see what the repairs actually are and what they'd cost me. And then I'd find that, or I'd feed that into my deal analysis and make a decision, yay or nay, right? So now if that didn't pan out, then maybe should I buy and hold this deal for myself? If I thought that were a possibility, I'd conduct my own physical inspection.

In this event, I would conduct my own physical inspection. I look at contractor bids and then kind of reanalyze what it would take to get the property to a rent-ready status, maybe not a full retail status, right? Retail ready for like a resident owner. But what do I get? How much will it cost me to get a rent ready? Then I'd confirm the market rent with a few property managers and then I'd make my decision there. Yeah, or nay.

And so on. And I know this sounds like a lot. But this entire process, it's going to be completed in a few days, really. It would really only depend on other people's schedules, like your inspectors' schedules or your contractor schedules. but a few days, maybe even less, of your own time to complete this. All right? Now, once your inspections are complete, you have three options here, okay? Inspections are complete.

You've got offers coming in, your marketing's running, offers are coming in. But once your inspection is complete, you've got three options. You can cancel the contract and walk away if you don't like what you found. You can just cancel the contract. If it's like, oh, this isn't too much work or this is going to be a real headache. This is just not the deal I thought it was. you can cancel the contract and walk away. That's one option one. Option two, you can go back to the seller, share what you found, and then renegotiate in however you'd have to do that. Okay?

So if it's, you know, you found a little base, the seller said, yeah, the electrical needs to be replaced. That's going to be $5,000. You brought in a contractor. They said it's going to be $8,000. And so that's a $3,000 difference. You can go back and renegotiate that. Okay? So you can go back to the seller, share what you found, and renegotiate. Or three, you can just follow through and complete the transaction. So if you choose option three following through and completing the transaction, now it's time to close the deal. And so what I do is I'd contact my closing agent. I'd provide them the purchase agreement and all the documents and I'd request a title report to confirm clear title.

I'll just go through that whole thing. This period, the escrow period, it's a big mystery to most people that have never been through it. So don't let it be. The closing agent, understand that the closing agent is a third party representative to this transaction and is there to make sure all eyes are dotted, all T's are crossed. everything is compliant and above board and everybody knows everything about everything. So if you have any questions about what there is for you to do, just ask them. They're going to tell you exactly what to do, right?

It's not that big video. Once you go through it once, you'll be like, well, what was that? That was easy. And for those of you that you have already gone through that process, you know what I'm talking about, right? So frequently, the next question that I hear, though, is, and this might have just come up for you, how can I follow through and close if I don't have the money to do it, right? If that's what you're thinking, it's okay, relax. I want you to understand this, though, up to this point, have you needed any money to buy this

property? Up to this point? No, you haven't, right? Up to this point, just about every real estate transaction looks relatively the same. You found the deal, you put it under contract, you started promoting it, and you completed your due diligence. You haven't needed any money yet. I mean, sure, a few bucks here and there, but nothing significant.

You haven't needed any money yet. And if you've completed the 20-point marketing checklist and you indeed do have a deal, likely the money has already shown up. If it hasn't, then you miss something. Either you don't have the deal you think you do or you're lacking exposure. And if you're following the 20-point marketing checklist, it's likely you don't have a deal. And that has always been my answer to a deal that gets stuck at this point. And I would say that's even more so in our current environment because inventories love.

There's a ton of demand out there for properties, and there's a ton of money looking for deals. A ton. We're selling all of our deals right here or finding the money for the deal within 24 hours of us getting under contract. In most cases, in almost every case, less than seven days for sure. And we're doing in our office exactly what I've shared with you this week. So don't worry about the money. Don't let the worry of money stop you from getting. this far. Don't complicate your business with fearful, concerned, and worried emotions and thoughts

about money. It's just real estate. And up to this point, you have nothing at risk. You have nothing to lose. And if you do it right, in the manner I've shared with you this week, you've got everything to gain. What's most important right now is that you have a strong comprehension of the basic moving parts of your business, the basic players involved, and the ultimate goal. that being your financial goal and how simple this business can be. Right. So let's run this checklist on your analysis and closing the deal. One, are you controlling the offer process with your buyer inquiries?

Are you controlling that process? Are you telling them what to do? We went to that whole checklist, right? Two, are you analyzing each deal for your ideal exit strategy? Right? Are you keeping your options open? Analyze each deal for your ideal exit strategy. Are you analyzing each deal for backup exit strategies?

Are you being decisive at the end of your inspection period? Like, am I going to cancel this? Am I going to renegotiate or am I just going to follow through? Just be decisive and go. And five, are you opening escrow despite the perceived lack of money? Don't get that far and chicken out. If you've got a deal, the money's going to show up. You've got nothing at risk either.

You've got everything to gain. So we've covered a lot this week. It's a lot. But it is simple, right? It is really simple. I mean, it's so simple. And if you keep it simple, this business is going to provide everything you imagined it would when you got started. So let me ask you a question.

If you knew your success in real estate was guaranteed. If you knew it was guaranteed, when would you start or restart your business? Think about that for a second. We'll come back to it. But think about it for a second. If you knew your success in real estate was guaranteed, when would you start or restart your business? Hold that thought.

Remember at the beginning of the week, I said, if you're going to fail in this business, it'll be for one of two reasons. Either one, you will lose your faith in real estate or two, you will lose faith in yourself. Well, I covered the first reason you might fail in great depth. We did a whole episode on it Monday. We've gone into great detail this week,

why real estate and why real estate works, and why real estate is your only chance. Real estate, it's the final frontier where the average person has a legitimate shot at achieving financial freedom. That's why real estate. We went all through that on Monday. Now, the second reason you will fail, if you fail, will be because you have no faith in yourself. Well, we're going to work on that now.

I don't even know you. Well, I likely don't know you. But for demonstration purposes, I don't know you. I don't even know you. And I have faith in you. In fact, I have faith. in your success. I have faith in your success because I know how to guarantee your success. Yep, I can guarantee it. Cool, right? You've got to be excited right now, right? Okay, here's what I mean.

You're excited because everybody wants a guarantee. I mean, when I asked you just a moment ago, if you knew your success in real estate was guaranteed, when would you start or restart your business? And you likely answered with the something to the effect right now. If I knew it was guaranteed when would I get started right now if I know it was guaranteed. You probably thought about it and you consider dropping whatever it was that you were doing and getting started right now. But you didn't. Did you? No, because you don't believe your success is guaranteed. You don't believe it. But if you did, without a shadow of a doubt, would you let anything get in your way? No, you wouldn't. So that's what we're going to tackle next. We're going to remove all doubt, specifically doubt about you. We've removed

all doubt about real estate, now it's time to work on you. So next week, I'm going to share with you why I believe your success is guaranteed and how you can guarantee it for yourself. And this isn't going to be a mind over matter type training, right? It's not going to be a if you believe you can achieve type training. It's not going to be a law of attraction type training. No, although there is room for all of that and some of it may be mentioned, it's not going to be that type of training. It's going to be a meat and potatoes action steps for how you're going to approach 2017 to make it your best year ever. In fact, bring your number with you. The number we created at the beginning of this back to basics and start your early training, remember? What did you

make in your passive income last month? And what would you like that number to be by the end of the year? Now, the difference between those two numbers, that's the number I want you to bring to next week's training and I'm going to show you a proven systematic approach to achieving that number in the next 89 days. Yes, I'm going to show you how to accomplish your 12-month goal in 89 days. Why 89 days? Well, on the 90th day, we're going to create a new plan on how to approach the next 89 days. And we're going to build on top of what you've accomplished in the first 89. But let's not get ahead of ourselves, okay? Let's focus on the first 89 days first, first things first. So let me ask you, what was your new year's resolution this year do you remember was it to make more money was it to lose

weight those are the two most common resolutions among americans by the way maybe didn't make a resolution this year at all and that would round out the top three more money lose weight and why bother some people think why bother because new year's resolutions they don't work truth is for most people they don't and here's why you see they set their goals based on the entire year on a 12-month period. And recent studies have revealed that people can't see much further beyond a 90-day horizon. People don't have the capacity to envision a clear picture of what there'll be or where there'll be and what they'll be doing beyond 90 days. And even that, even that 90 days, that's stretching it for most people. I mean, excitement, it wanes pretty quickly. Motivation is lost for most people.

Focus gets blurry. We get distracted. We think about the, you know, think about the last time that you attended a seminar. You were excited like crazy. the day you left, right? You were so fired up on that day that you left that seminar. And then you were still interested the day after. And then the day after that, life kind of resumed, kicked back in and you were right back into your rut, right? That's how humans are wired. And today's fast-paced, immediate gratification society certainly is not helping. So imagine this. What would be possible for you if you woke up each day with the type of enthusiasm around your financial goal as you had the afternoon you left that last seminar or at the moment that you

finished that last great book or at the moment that you listen to that last great podcast. What will be possible if you could maintain that type of enthusiasm throughout 2017? Think about what would be possible. That can be your reality. And here's how. If you adopt a simple system, a new proven system that breaks a year up into 90-day segments, you can achieve everything you set your mind to and even accomplish in 90 days what you thought would take a year.

So I want to take you through this process where we look at your real estate investing business, your real estate investments, your personal real estate goal, and set you up to not just crush it in 2017, but to do so in the next 89 days. So go to epic89.com and sign up for this free training. You're going to receive three short training videos, three or four, I think it's three or four short training videos, you're going to receive a workbook with step-by-step instructions on how to take all that we've covered this week and streamline your real estate investing business. Plus, I'm going to host two live Q&A online coaching sessions to make sure that nothing falls through the cracks for you

so you can get all your questions answered. It's totally free. So go to epic89.com and sign up right now. I won't be leaving this training up forever. I promise. Once the training is complete, I'll be taking it down and you'll have to wait until next year. So go to Epic 89. and sign up now. All right. So you know what time it is right now. It's time to give away this episode's $100.000.com gift card. Doing this on every episode in November.

And all you have to do to be eligible to win is to go to iTunes, leave a review for the show. Click the subscribe button, leave a review for the show. And if you've already left a review at some point in the past, thank you so much. There's nothing for you to do. You're already entered. And if you'd like to enter, just head over to iTunes and do that. Type in real estate or epic real estate investing into the search window. click on this podcast, click on the subscribe button,

leave a rating and a review, and there you go. Boom, you're in. And since we're here right now, we'll go ahead and we'll spin the scroll bar. Alrighty. This headline says, Superb from James Santillo. No need to go anywhere else.

This is the real deal. Short and sweet. Thank you, James. Thank you so much. To claim your gift card, just send me an email to podcast at Epicrealestate.com. and I'll reply to that email with your $100. Amazon.com gift card,

and you can use it how you wish. Use it on whatever you want. All righty, so that's how it works. Every episode in November, we're, I don't know, we're a little bit more than halfway through. Still plenty of opportunity to win. Go to iTunes, click subscribe, leave a review,

and maybe you could be the winner on the very next show. All righty. So go to epic89.com. Next week, we'll resume this training. It's totally free. Go to epic89.com, and we're going to guarantee your success. God bless.

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.

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