The Science of Flipping - Episode 148: How to Get More Contracts Accepted – Real Estate Investing

Starting point is 00:00:00 Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. Yo, yo, welcome back to the Science of Flipping podcast. I am your host the Justin Colby. I apologize. Personal page already has 5000 friends. So you need to follow my public figure page. And I give away a ton of free content. I give away a ton of free goodies. And as a matter of fact, for those of you listening to this podcast right now, I am going to allow you to enter into the Science Academy, the Science of Flipping Academy private group for free, no cost to it. And I gave away my best stuff in that I gave away, you know, free phones and laptops and iPads and tickets to events. And I give away a lot of really good stuff on top of great education. So for those of you

Starting point is 00:01:26 listening to this podcast right now, I want you to send me a direct message on Facebook or Instagram. Say something as simple as, I heard you, I heard your podcast and you are going to allow me to get into the Science of Flipping Academy, which is a locked group. It's private. It's closed. So hopefully that helps. That's a free giveaway for you. But again, this which is a locked group. It's private. It's closed. So hopefully that helps. That's a free giveaway for you. But again, this podcast is all about systems, tools, strategies, techniques for your real estate investing business. As many of you guys know, I've been flipping homes in Phoenix and in Dallas and San Antonio now for the better part of going on 12 years now. And I am launching San Diego and Inland Empire as of this year as the last three months. And I actually have the great

Starting point is 00:02:14 challenge and blessing to jump into a market that a lot of people would say cannot be conquered. It's impossible. You know, it's a smaller market. And it has its challenges, there's no doubt, but we have been able to, we closed nine deals last month, we're set, we want to, and our goal is to close 11 deals this month in San Diego. And so the challenge is upon me, and I have to take that challenge. And I want to be able to take my learnings from trying to grow at the pace we're growing and give it back to you. That's what this episode is really going to be about is what was one of the biggest key learnings that I had last week in San Diego. Again, as you guys see, I'm at home again because I travel so much. Very rarely, if ever, am I at the office. But I want to stay

Starting point is 00:03:06 consistent with giving you guys good stuff. So one of the biggest key learnings I will tell you, if you are a wholesaler or a fix and flipper, is you have to provide value in your offer. Let's just take a step back from there. You need to start making offers. You need to make more offers. I have found time and time again, people that are flailing around, trying, struggling to get deals. My first question to them is how many offers are you making every single week on the MLS and off the MLS? And you need to be doing both. So you need to focus on that first. But the actual real strategy that I'm getting to is when you are making your offer, the value has to be in your offer. It isn't always price. However, a lot of

Starting point is 00:03:53 times it is, but also things such as, you know, we went from, you know, let's say a 14 day inspection down to a seven day inspection. That's seven less days. As a wholesaler, that's seven less days for you to be able to try to sell the home. As a fix and flipper, that's seven less days for you to get your home inspection and so on and so forth. And so understand though, that crunches the time, but it also provides more value in your offer, which can oftentimes help you get your offer accepted. Maybe your close date goes from 21 days or maybe 30 days right now, and it goes down to 21. Maybe it goes down to 14 to be able to provide more value. When you guys are in markets like I'm in,

Starting point is 00:04:39 and my focus now is San Diego and Inland Empire. You know, you need to be sure that your offer creates value to the agent, either bringing their client video or the homeowner themselves. If you provide value in your offer, a lot of times price starts to become a smaller issue and your value proposition becomes a bigger, it gets magnified in the seller and or the agent really start to focus on those, you know, criteria in your offer. And it was a massive, massive learning because just like Phoenix, just like Dallas, just like San Antonio, all incredibly competitive. I think anyone listening to this podcast would say, how the hell are you making it work, right? But San Diego and Inland Empire are just as competitive. It's just a different model, right? In San Diego, we have a lot more fix and flip competitors than we do wholesalers.

Starting point is 00:05:36 In Phoenix, there's a lot more wholesalers. In San Antonio, you have kind of a competitive nature on the wholesale side, but there's still a decent amount of fix and flippers. So when you are thinking about competition, by the way, if I've been able to last 11 plus years, wholesaling, flipping homes, being an investor, I know you can too. It has more to do with your ability to overcome obstacles, stay in there, continue to recharge yourself when things don't go right. But I promise you, San Diego is just as difficult. There's no silver bullet in any city. I don't care if you're in Oklahoma City. I don't care if you're in South Carolina. And I don't care if you're in Atlanta. It doesn't matter. You're going to have those challenges. And my advice on this episode simply is structure the offer, not as a blanket offer. For those of you out there that potentially are

Starting point is 00:06:31 making, you know, 50 offers a day and just blanketing a percentage of ARV or whatever, I don't believe in that. I don't subscribe to that business model, right? I firmly believe if you make each individual offer very specific to that homeowner's needs and values, you have a much better chance of getting that deal. But if you're out there just flailing 50 offers a day on the MLS or however you might be doing it, those offers don't work. And maybe they work every so often. So I won't be too, you know, I won't paint the picture too bleakly, but if you're being strategic with the value you're presenting per the home, you will get more deals. And if you just actually take that same concept and provide it to your

Starting point is 00:07:21 business, meaning, you know, when you're talking to the homeowner, align your values with the homeowner's values. Have them understand that you want to help their issue, resolve their issue, and not just simply buy a home. Because they want to not feel as if they're being sold or they don't want to feel like they're dealing with a slimy investor and all the other things that come across, right? And the best way for you to be able to do that is align your values with their values. Understand where they're coming from. And, you know, there's a whole bunch of stuff I could go in here about sales and negotiating and things of that nature. But the key strategy here is when you are ready to present that offer, make it in alignment with what they care about.

Starting point is 00:08:10 We got a deal contracted this week down San Diego that the homeowner needs to stay for an extra 30 days and they literally don't have money to stay to, to do anything right. They're hoarders. They have no money. They have a bunch of stuff to move. So we're going to do two different things in this offer. Okay. A, we're going to allow them to stay for 30 extra days. We're going to do a hold back in escrow. And what that means is we're going to simply hold back about $25,000 is what we put on the contract in escrow until not, not till closing. Obviously they will get the remainder of the money at closing, but 25,000 stays in escrow until not, not till closing. Obviously they will get the remainder of the money at closing,

Starting point is 00:08:46 but 25,000 stays in escrow. And then we put that after the 30 days when they vacate the home, then we will release the $25,000. Right. And that gives them a chunk of money up front to move, to, to get all their stuff out of the house, which was a massive, massive concern for them. And then it also protects us because if they don't, and then we got to go down the eviction path, which oftentimes happens, not often, but it does happen. Then we are able to be protected and we keep the $25,000 because they didn't do what they said they were going to do. And then we're able to, you know, have a little bit more margin and go through the eviction situation and so on and so forth, which means I have to hold the property longer, which means holding costs increase. So we need that $25,000. So that was one thing that we put in

Starting point is 00:09:39 the offer. Well, I guess the moving out was the major thing, uh, because they needed the 30 days. And then the other part of that was we granted them the 30 days. They do not need to pay us rent or a lease amount because we basically said, if you do this, here's the price. And then here's the $25,000 that we are doing. So again, that was their biggest issue was they needed 30 days more. And what we did is to even hopefully expedite the process of them moving out before the 30 days, we are willing to release a small amount of money prior to closing so that they can actually start the process of moving. Again, it's a hoarder's house, right? So there's a ton of stuff in there. And so we agreed that that would be helpful and it's a small amount. And then that way they can

Starting point is 00:10:39 take that money and start the process of moving. And they still do have the 30 days, right? And that's still in there. But our hope would be is that that money released prior to close of escrow will help them move quicker. And hopefully they will be out sooner and the whole process will, you know, speed up. That's our hope. Now it's not always perfect, right? It's not always a perfect world, but that's that specific deal. I bring that specific deal to light because I did two things to help provide value in my offer to them. And this is why it worked was because of that. Most investors would have said, what's the ARV? You know, I want to give 80% of the ARV minus rehab, minus wholesale fee. And they would have just submitted the offer. They would not have listened to the homeowner. They would not have really understood the value of

Starting point is 00:11:28 they need an extra 30 days and that is why my offer beat the other's offers out there. And so, I challenge you to really understand what value in your offer can help the other person. So, if someone would have done a seven day inspection period and a 14 day close, that actually works against you in this specific deal. And so for a lot of people, and I hear it all the time, and I've said it before on my podcast, you know, you want to, you know, shorten your inspection period and have short closing, you know, make your offer look better. I agree. But also listen to the other side, listen to the homeowners, understand really what the value is because they don't want

Starting point is 00:12:10 to quit closing. They want a long closing, right? Or they want a lot of time to at least get out of their house. And so if you can take that strategy and start to implement that more in your offers and be a value to the other side, the homeowner, or if you're offering on the MLS, be a value there, you will get more opportunities to close the deal. So that's the strategy for this episode, guys. Hopefully that makes a lot of sense. Again, if you are not subscribing to my YouTube, subscribe to my YouTube. It'd be a great favor to me. Obviously, get on my social media. I do a lot of free content. I do a lot of giveaways. I do a lot of cool stuff there. And if you're listening to this, go ahead and add yourself to the Science of Flipping Academy private group. My assistant, Andrea, will add you and also shoot me a note or email or text or a private message saying, hey, I heard this. I want to get in your group because

Starting point is 00:13:03 in that group, that's where I give a lot of the free tickets, the free giveaways, the iPads, iPhones, and a ton of knowledge. Um, you know, a lot of the key learnings that we do day to day is in that group. And I want to provide you guys with as much value as I possibly can. And a lot of my different relationships, it's all going to be going to the science of Flipping Academy. It's closed. Send a message in or try to get in. I'll let you in and we will go from there. So hopefully that find you well. I'm out of here. I look forward to talking to you guys on the next podcast episode. And by the way, shoot me an email if you have a subject you want to hear about. Justin at the Science of Flipping. And if you're like, here's a hurdle I'm having, here's a challenge I'm having, shoot me an email about what you want me hear about. Justin at the Science of Flipping. And if you're like, here's a hurdle I'm having, here's a challenge I'm having,

Starting point is 00:13:46 shoot me an email about what you want me to discuss and I'm happy to do so. Peace.

The Science of Flipping - Episode 148: How to Get More Contracts Accepted – Real Estate Investing

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