Epic Real Estate Investing - Talking to a Live Seller About a Price Reduction ($20K) | 1227

Episode Date: August 16, 2022

There are many needs to be met on both sides when it comes to making a real estate deal successfully concluded. Price is one of the tops on the list of priorities. How can we reduce it significantly? Listen to this episode and find out Matt’s strategy for making the seller loosen up and start playing the ball! BUT BEFORE THAT, Matt shows you how to flip real estate contracts. Are you ready? Let’s go! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. How to flip real estate contracts. This is a question asked frequently by new investors as it presents the path of least resistance in getting started making some money in real estate without the need for a real estate license even. And as intriguing and as exciting as it may sound, however, there is still a relative level of risk and margin for error. And I'm going to cover what you need to know before you pull the trigger. You ready?

Let's go. Welcome to the all-new, epic real estate. estate investing show. The longest running real estate investing podcast on the interwebs. Your source for housing market updates, creative investing strategies, and everything else you need to retire early. Some audio may be pulled from our weekly videos and may require visual support. To get the full premium experience, check out Epic Real Estate's YouTube channel, epic rei.tv. If you want to make money in real estate, sit tight and stay tuned. If you want to go far. Share this with a friend. If you want to go fast, go to r-e-i-a-aise.com. Here's Matt.

All right, so by the time we're done, you'll know what flipping real estate contracts is. You'll have five simple steps to follow to do it the right way, and then I'll even give you easy access to the money needed to pull it off. I mean, after this, you'll have zero excuses to start earning the hundreds of thousands of dollars that are possible. I mean, even in your spare time. All right, so flipping real estate contracts is another way. way of saying assigning contracts, or more commonly referred to as wholesaling real estate. The terms they're all used interchangeably, they all mean the same thing. So real estate contract flipping serves as a way for investors to act as intermediaries between sellers and

end buyers. And generally, it works like this. Instead of entering a written agreement with a seller with the intention to purchase their property, you would enter this agreement with the intent of finding a second buyer that will ultimately purchase the property. So you'd be compensated by that second buyer for fighting them the deal and assigning the contract to them. That's a really important distinction to make if you're going to be the contract flipper. The seller isn't selling the property essentially to you, but rather awarding you the rights to buy the property of which you then have the ability to sell those rights.

So today's wholesalers, they sign a contract that says that they have the right to purchase the property in return for what is typically referred to as equitable interest in the property. And I'll break it down how it works in five steps for you, as if you are going to be the contract flipper. You're going to be flipping the contract. So step one, buy the property. Specifically, you're looking for a motivated seller, someone who needs to sell their property as opposed to somebody that wants to sell.

You know, what may cause a seller to need to sell. It might be something like, you know, maybe they're facing foreclosure, or they just lost their job, or the property needs repairs and that they can't afford to fix. Or maybe they're just fed up with being a landlord. I mean, those are some really common reasons, but the list of reasons a seller would need to sell a property are seemingly endless. And that's where this process begins, finding a property owned by a motivated seller.

Nothing happens without a motivated seller. Now, where do you find them? Well, you know, a trip to the local courthouse to browse, say, eviction records, or default filings or bankrollings. or bankruptcy records, those can be really good places to start. And typically, you can get that information for free, as these types of records are available to the public. Or there are many list providers online

where lists of property owners experiencing these types of problems can be easily purchased. If you'd like to use the one that I use, you can just take it for a free seven-day test drive. You can get access to that at epicropstream.com. Now, step two, contact the owners on your list. And you can do this by way of just calling them up on the phone, the good old-fashioned way.

You could even go and knock on their door and asking them if they're ready to sell their property. Now, a more common way of contacting these owners is by marketing to them, like by sending them postcards in the mail or placing ads in the classifieds, whether that be online or off or by running digital ads on social media. Those are just a few ideas, but there are countless ways to market for motivated sellers. And when you find one, that is open to selling their property to you, you'll then negotiate the price in terms at a discount, of course, and then you're ready. ready for step three. So step three, write up the contract and get assigned, of course.

And this is where many new investors, they get stopped. Their unfamiliarity of how real estate contracts work that gets in the way of them taking this particular step. You see, most real estate contracts, they default to a period of time that is considered a free look. And this gives the buyer some time to do their homework to make sure this will be exactly what they want to buy. In the context of flipping contracts, this free look period can be used to find that second buyer that you're going to flip the contract too. So the verbiage of the contract between you and the seller, it's important. There should be no room for interpretation or ambiguity. The act of assigning a contract needs to be purposeful and deliberate. And here's the deal. All purchase and sale agreements by default can be

sold to another party unless specifically stated otherwise. But double check yours. It is essential to make sure the contract states your exact rights to assign your contract to someone else. In the beginning, it makes good sense to hire an attorney versed in these types of real estate transactions to ensure that you're covered. But once you've got your contract that protects you and gives you the right to flip the contract, you won't need an attorney for this purpose again because you can use the same contract over and over and over. Now, step four, find a buyer.

So today's experienced contract flipping investors begin with the end in mind. More specifically, they'll have a buyer or a market. multiple buyers lined up before they even sign a contract with a seller. That way, they'll already know how the deal is expected to unfold. Most wholesalers, for that matter, compile what's known in the industry as a buyer's list. As its name suggests, a buyer's list is a list of buyers, potential buyers. And contrary, though, to popular belief, a buyer's list is not an essential ingredient to flip real estate contracts.

It certainly makes it easier, but it's not essential. The essential ingredient is finding good deals that others want to buy. and if you focus on that, you'll find that there is no shortage of buyers in the market. And you'll notice that your buyer's list will just happen. It will just grow automatically. So if you have a buyer's list already or know someone that does, then start there and share your deal with that list. But if you don't, just advertise your deal in the classifieds. Craigslist still works very well for this.

Share it on social media, specifically investor groups like on Facebook or in the Facebook marketplace. If you have a good deal under contract, you typically won't have to do much more than that. But you can also attend real estate investor association meetings to share your deal. You can share it with local real estate agents. You can post bandit signs in the area. I've found buyers for my deals with every single one of those suggestions. If you've got a good deal, finding buyers is pretty easy these days. Most new investors think that this is the hard part, but it's not.

Now, step five, close the deal. Once you have identified an end buyer, it's time to close the deal. deal officially. You know, there are two ways to position the new buyer into the deal. The first way is to assign your rights to the new buyer by using an assignment of contract. In that contract, it will state your fee that the new buyer is going to be paying you for your rights. And the second way is to enter into a new contract where you are actually the seller of the deal. So you'll have one contract with the seller where you are the buyer at, say, $100,000. And then you'll have a second contract with the new buyer where you are the seller in this case.

at say $110,000. Now, both of these approaches, they work, and they accomplish the same thing. And once you have one of those in place, you'll just connect with a closing agent. Could be an escrow officer, a title agent, or a real estate attorney. And that's going to depend on which state that you live in. But just tell your closing agent what you'd like to have happen, and then they'll take it from there. Then all you're really doing is, you know, you're primarily waiting for the title search to be completed, of which will reveal any potential ownership disputes, any liens and or judgments.

and within a week or two, you should know if title is clean and whether or not the final sale can go through. And when it does, that's the point at which you will receive your assignment fee or the spread that you created for yourself between the two contracts. That's how you get paid by flipping real estate contracts. And this was a very general overview of how flipping real estate contracts works. I get it. There's lots of questions potentially. There's lots of details that aren't really there. But if you'd like to go deeper into detail, I created a free 30-minute training just for you and how to access.

an unlimited amount of money to pull as many of these things off as you can. And that training is at matsfreetraining.com. You know, historically, money hasn't been needed by the contract flipper to put these deals together. But more and more closing agents are becoming resistant to this practice of flipping contracts, and more and more states are starting to draft legislation to make it more and more difficult to pull off. So it's becoming more and more necessary to bring some money to the table to do these types of deals. But not to worry.

It doesn't have to be your money. and that's why I show you in this contract flipping training how to access an unlimited amount of money so that closing agents or laws won't get in the way of you flipping as many contracts as you want. So get the details at matsfreetraining.com. It's free, as the link says. So how much can you make flipping real estate contracts? Well, there are no limits to the amount of money that you can make from flipping these real estate contracts. One of my clients in St. Louis is earning $250,000 per month just flipping contracts.

But here's what it takes. Like him, you'll have to sift through numerous deals to find the right contracts to represent. And this can take up a significant amount of time, especially while you hone in on your search criteria in negotiating skills. The amount of money that you can make will be a direct reflection of the difference between how much the contract costs to buy and how much you can sell it for at the end. This difference can vary from deal to deal from like $5,000 to $500,000. It all depends on the types and size.

of the deals that you pursue. And, you know, creating a reputation in your community for finding good deals and building a relationship with other real estate investors, that's going to be key to your long-term consistent success. So when it comes down to how much you can earn, the sky is the limit. And if you'd like to tap into this and do this for real, get started at matsfree training.com. We'll be back with more right after this. Boarding for flight 246 to Toronto is delayed 50 minutes. Oh, what? Sounds like Ojo time

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Hope is not a financial strategy Let's get back to work. I got another live call for you today. I was doing a follow-up for one of my students. They brought me one of their leads, a seller lead, to where they had already had a conversation, and they were about $40,000 apart.

So I made the call. We made a bunch of progress. And so check it out. Let me know what you noticed. What did you learn? And what do you think it was that specifically caused the seller to really loosen up and start to play ball?

Check it out. Hey, is it? Yes. Hey, it's Matt. And we haven't met, but I think you met my partner, Thomas recently. Yeah, yeah. Thanks, Matt, for returning to the call. Appreciate it.

You bet. You bet. He left me some notes. I'm the one over here that writes the checks every week. Oh, okay. We've got about, gosh, we've got like a, not exorbitant, but more than usual deals on our desk. It feels like the market shifted in a little bit.

And I can, we've, I think we got enough to try and pull off three this week. And Thomas thought yours might be one. of them oh for the house yes uh-huh well i talked to thomas um i'm probably gonna just fix it up and sell it myself because the price didn't seem quite that great you know what i mean right well i don't i just have some notes here what did you got you guys spoke about price uh thomas yeah did that did i do with that i don't hear somewhere but yeah it was like um Let me turn it's back here. Yeah, you called, like, we've been in touch.

Let me see. Okay. Let's get we got here. I thought you were different, Matt. I thought you were Matt from Terminix. No big deal. Yeah, let me see we got here. We get rid of Critters too, so.

Yeah. Yeah. Well, actually, you know, they had sent one thing before. It was like, and purchase price 140, you know, option one. There was like an option two and all that. But I didn't want any options two, three, four, or five. I was basically looking to sell it out, you know. Right, right.

I fell, and it was purchased price was $140. I know I could do a lot better on my own. If I, you know, put the flooring and painting tire inside, it's going to get a lot better and I'll probably get close to $200 at that point. But the lowest price house in Port Charlotte, it's like $179, and that's those tiny little things. Got it. So do you know what properties like, do you know what properties like yours are selling for you?

Do you have any idea there? Yeah, yeah, if they're, if they're, fixed up. They could be in the 200. Geez. And 200. So, you know, it depends. Yeah. Perfect.

Yeah. I mean, shoot, if you have the means and the know how to fix these things up. Yeah. Yeah. So that's what, you know, first I thought, you know, I thought maybe I got a lot. It was a lot more than that. You know, 140 something too low to me, you know. Got it.

So how much do you think you're actually going to have to, just out of curiosity? How much do you think you actually have to put into it to get your price? probably not that much i got some estimates the flooring was only like uh three grand you know because for carpeting and final and then um the pain job is like 5500 so you're talking like 8500 so far to just that part you know got it got it are you living in the property or vacant yeah go ahead i'm sorry are you living in the property is a vacant oh no it's all empty yeah got oh so it is empty now you cut out on me i missed the punchline there yeah it's all yeah completely empty yeah Got it. So if you were going to keep it as a rental and find a new tenant, you know, what are a couple of other things that you think you would fix for sure or anything?

Oh, you mean if I. Well, you know, I mean the kitchen cabinets and everything is there. You know, I probably, you know, I don't want to spend too much on updating all the kitchen cabinets or anything. But I'm sure if I sold it somebody eventually would probably change those out, maybe, you know, I would say the bathtub and toilet like the green color. you don't anything like that older green but um so i would say somebody would probably do the tub and you know eventually i mean it's there it works everything sure sure it's just uh you know some of you know to me green is not a good tub color i would say i would say the tub toilet and you know it may be the cabinet tree you know i mean it's there everything is there it works that's why i'm only doing up the plurring and the entire interior you know painted

got including inside the garage okay Well, I mean, it sounds like something that's kind of up our alley, but I don't like to do this stuff if we're both winning. It sounds like we're a little far apart. So I don't think I'm the right buyer for you. Yeah, it does sound like, you know, but, you know, it is a good, you know, some people, you know, if they don't have other options, it's not bad, you know, what you guys are doing. You know, I think it's a good thing some people, you know, or I'm state or too old or whatever, you know. And I get that people have to make money. You know what I mean?

It's not like. Yeah, we got to keep the lights on over here. For sure. So, no, I get you. I mean, I've had the house for over 20 years. But I know what you mean. Yeah, rents have gone way up, too. I mean, if I wasn't moving to North Carolina, you know,

because the house is across the street from my current house. So it's easy. I've been watching it for over 20 years over here. But if I wasn't moving, I probably still would have kept it. I mean, I could still rent it out and have a rental company take care of the whole thing for me. I mean, rents are probably rent for $1,600 a month, easy. Yes. Yeah.

Yeah, rents are like outpacing home prices now. So it's like, yeah, that never happens. But it's going on right now, all kinds of weird stuff on right now. Yeah. All right. So, um, if we chose to, to go ahead and kind of maybe redraft our offer, uh, will we have to pay off any taxes, liens or a mortgage? No, no, all that stuff's paid.

I have mortgages on the house. I have had a mortgage since I bought it 20 years ago. Got it. No, we're good. And you know nothing there. Okay. And you don't like. the idea of taking some money now and the rest later?

No, not really. No, not really. You know, I mean, if I was younger, I would, but not right now. Mm-hmm. Yeah. Okay. If we could save you from all of the repair work and effort, what would be like, okay, let's do this price?

I don't know. If you, you know, it'd have to be like, I'm thinking, I was looking in the 180s range. Uh-huh. But you guys were at 140, so. But, uh, So I'm probably going to attempt to maybe take care of it, I guess. Okay.

So we did 180. Yeah. We probably, you have quotes there from 3K and 5K. So maybe 10K we put it in a will be 190. Yeah. Oh, yeah, yeah, yeah. Yeah, I'm just kind of seeing how I can make money on this and maybe save you some effort there. Right, right.

Okay. That's what about where it would be. Perfect. I definitely will slow, you know, if it's fixed up really nice and in the 200s, I don't, I don't see any problem. If you look up all the homes in Port Charlotte, you're only going to see a handful under 200. There's maybe like, I don't know, five or six homes. And a lot of those don't have any garage and some of them are smaller, you know. Right, right.

Okay. So if we did, if we came up and met you like a 160, that would be a no-go? I don't know. I mean, I can think about it. Talk to my wife. I can run a buyer and see what we think. But I got your name and number here. Perfect.

Three one out of three one eight eight three four. Yeah. Yeah. Yeah. So you're thinking one one 60 you're thinking. Yeah, I mean, I'm thinking I'm gonna crunch numbers too. I'm just trying to see how we can both win here. And right, right.

That's all. Okay. Uh, yeah. Yeah. You know, if I got an email, I think you guys have, you could text me the quote or whatever you think at that same number you got. Perfect. I can run it.

You know, I can run it by my wife. It doesn't hurt. And we can think about if I decide. I always give you a call. Perfect. Okay. I mean, you're still going to make money. Believe me, I know you will.

I can't own that. There's no going to mind if you buy the 16th, you would make money. Okay. Cool. Well, the market has more to say about that than I do. Yeah. All right. Well, thanks a lot, Matt.

Like I said, you want to shoot me that quote. Go ahead. It's a debt that number. Cool. If you don't hear back for me, I'll have Thomas reach out to you, okay? Sounds great. Thanks for a good day. Okay, take it easy.

Bye, bye, bye. So, as you can see, we are much closer, and the seller is much more open. Thomas will follow up because I think there's a deal here for sure. It's just up to Thomas go ahead and following up. And based on what the market is doing right now, I think the seller will eventually come to reality. This is going to be a fantastic deal for Thomas.

We'll certainly keep you up to speed. And that wraps up the epic show. If you found this episode valuable, who else do you know that might too? There's a really good chance you know someone else who would. And when their name comes to mind, please share it with them. And ask them to click the subscribe button when they get here and I'll take great care of them. God loves you, and so do I.

Health, peace, blessings, and success to you. I'm Matt Terrio. Living the dream. Yeah, yeah, we got the cash flow. You didn't know, home, boy, we got to cash low. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.