The Science of Flipping - Episode 72: How To Handle Seller Calls – Real Estate Investing Podcast

Episode Date: July 15, 2016

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Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. What is up? What is up? Welcome back to the Science of Flipping Podcast. I am your host, Justin Colby, and welcome to another episode. This is episode 72. Today is a great subject matter that I continue to be asked about as far as taking in leads and what we do when the leads come in and what kind of script we run through. So I want to talk to you guys specifically about that. But if this is your first time to the podcast, I want you guys and encourage you guys to go over to thescienceofflipping.com. At the website, we have a free, absolutely free ebook of the 15 most costly mistakes

an investor can make. If you do not have it, make sure to download it. It's absolutely free. This is what I have gathered after eight years of being an investor. I have also taken other mistakes that some of my close friends have made who have been around for a very long time. You do not want to make these mistakes. The whole reason I put that together is to make sure that your learning curve can be shortened. You do not have to make the mistakes we've made. Again, it's completely free. It's there to just give you guys some help and some

guidance on things not to do in today's real estate market. Again, this is episode 72 and we have a great subject matter that I'm continued to be asked about a lot. So I want to jump right in. As you guys well know, my co-host, Mr. Kent Clothier, is a busy man. Dude, I can't, I mean, man, I can't even get this guy to get on our damn show together, man. So, apologies. He is just very, very busy, but I promise you, he is going to be showing up. So, again, today is just me, but I have been receiving many, many calls and emails regarding this subject about taking in leads and what we say and how we actually take that lead and what we do with it. And so I'm actually going to go over our lead manager script.

This is the actual script that we actually have her run. And I'm not going to read it word for word. It's actually in front of me here. And I'm not going to read it word for word, but's actually in front of me here, and I'm not going to read it word for word, but I'm going to give you the general gist of it, right? Because what I have found, and what we do in this industry, is too many people over time feel like,

oh, I've been doing this long enough, so I'm going to prejudge the seller's motivation, or I'm going to prejudge whether they're willing to take my price by throwing a number at them and seeing if that will fit. I personally no longer necessarily agree with that. I feel as if that really is kind of the lazy man's way of doing it. I don't want to spend my time going and meeting with them if we're too far off. Well, listen, guys. At the end of the day, if you've ever played poker or if you've ever negotiated anything ever,

you never start at the number you really have or want, right? So, you know, sellers and us investors are going to keep our real cards close to our chest, right? We're not going to go out there and give the seller the highest number we're willing to pay. We're not going to go out there and give the seller the highest number we're willing to pay. We're not going to expect for the seller to give us their lowest number. So for us to just sit here as investors, or even if I'm talking to you realtors that might be listening, for us to expect having this conversation over the phone is really going

to get us to the number that we need. I feel like there's a false sense of security there. Quite honestly, I call it lazy. The reality is you will close a much larger percentage belly to belly, like 800%. Now, that's a statistic that I've heard that sales and negotiation, you have an 800% better chance closing the deal face to face. I didn't do the research. I didn't look up all the numbers. It's a number of I've heard. So, you know, I will say it because it's a number that I've heard, but at the end of the day, even if it's half that, even if it's a quarter of that, the reality is you're always going to get a better opportunity if you're going to be face-to-face with these people. So in our business, why I bring this up is if you're just getting started, if you are doing deals and you need to do more deals,

there's still one concept that works for both parties. That concept is simply get in front of more people, right? Don't try to weed through whether there's a high motivation. Don't try to weed through whether the number you guys talk about on the phone is going to work. I personally want to get in front of as many people as possible and have incredible rapport built so that when the time is ready to sell, even if it's not right now, they want to sell to me, my happy ass, right?

They want us to be the buyers because we did such a good job building rapport, showing them the process, helping them understand that we can help them along the way in many different areas, not just the price. And so I want my guys to be out there. Now, for those of you just starting, this entire podcast is about helping you implement systems and strategies to create the life you want, right? For those of you who are in the industry and you've been doing this, that is still what this is about. And so I preface that by simply saying, I don't go to the appointments. I don't answer the phone. I don't have, um, I don't analyze the

deals. I don't do any of this because I really have created a business that I probably work in five to 10 hours a week total that every single week we are collecting checks. I think we have eight deals already and we're halfway through the month as of yesterday actually. So who knows by the time Monday happens, but I'm still collecting checks on all these deals and I work maybe five to 10 hours a week tops, tops on this business. And this podcast is going to help you with the strategies, the implementation, the organization, and systemization of your business, right? So I'm going to tell you exactly what we focus on. And that is the call comes in, right? Let's make the assumption that I sent out direct mail. They call in. I want my lead manager answering the phone live. I want someone answering the phone live. I then want them to simply say, thank you for giving us a call. I really appreciate

it. I'd love to know a little bit more about the home that you are calling about or that your call is regarding, right? And how many square foot, this is where I really just want my lead manager not to talk about numbers, not to talk about motivation, simply to talk about what is the home look like, right? How many repairs have they done? What does their AC look like? How many bed bath? What condition is the roof, right? This is where I'm gathering information. I'm an information gatherer, right? So my lead manager sits in my office. This is what she does all day long. For those of you who have multiple lead managers, awesome. For those of you who are just getting started, this needs to be you, right? So the phone call comes in. She starts to gather the information. Address, obviously, bed, bath, square footage. When was the last time you've redone the

roof? Do you have a pool? When was the last time you redid the pool? When was the last time you did the air conditioning? What condition do you find your property to be in? Is there anything you think I need to know about the property that might stand out? Those are the type of questions, right? Your very typical questions about the property. Now, once I get to that point, through that, you will hear pieces of motivation, right? And or lack of motivation. I don't want my lead manager putting any type of criteria on motivation at all. It is not her job. It is my acquisition

manager's job. Okay. So with that said, she then goes into anything that she can take note of, of, you know, there are sellers as you're asking about the home, that will bring up, my house is in terrible condition. I don't have any more money to do what needs to be done for the home, so I just kind of need to get it sold. I don't know if that's what you want, but it's just I don't have the money to do what needs to be done. That sometimes can come up by your lead manager simply asking these questions about what type of condition the home's in, the AC, the roof, the pool, the whatever, right? And you will then start to hear that motivation. But I'm not asking

her to find the motivation. If that comes up, obviously she takes note of it and we continue on. Her next phase of the inbound script is simply to tell them about us. We are local investors. We pay cash. We can close quickly or we can close on your timeline. We do not have any commissions that you would need to pay. And we are looking to buy, rehab, and resell. And or if the property is a good fit, there's a possibility for us to buy and hold the property. We also work with many other investors together to figure out the best use of certain properties.

So with that being said, we obviously are solution oriented. We want to help you out. Sometimes that's just price. Sometimes it's helping moving. Here's what I would like to do. I would like to set you up with my acquisition manager, Mr. Seller, to meet with you and then also look at the property because we want to give you a fair offer. And for us, the best way to do that is to put eyes on the property. So do you have time around two o'clock today for my acquisition manager, Anthony, to come by and view the property and meet you? She's setting an appointment. So what has she

done here? Again, I'm going to say this over and over. We are in sales, people. This is a sales job. You are not in real estate. You are in sales. Do not forget that, right? So a lot of times you will get the deal because of the people. A lot of times you will get the deal because of the product or the price, right? The three Ps, people, product, or price. So I want to get my guy in front of them. I don't want there to be numbers talked over the phone. I believe the people to people is what is going to make the difference in this transaction. If you are just looking for the price and you're only focusing on the price,

you only have one component out of three, right? People, price, and product. Well, the product is the home in and of itself, right? The people is why I want my acquisition manager there to build rapport because I can't tell you how many times that my acquisition manager or even when I was doing this when I first got started I would get the deal because the people actually liked me they actually felt like they could trust me they actually felt like I wasn't just out to go get them and I was truly trying to give them a solution to whatever issue that they actually had so again it's important for me to have my acquisition manager or for those of you that are just starting that you need to be in front of every single person you possibly can be given the amount of time you have now there is a fine balance there's a fine balance if

you are a solopreneur, this is only you. You're the only person in this business. You have to balance your time because part of your revenue generating activity comes from answering the phone. The other part comes from meeting with the seller. So, you got to figure out what that fine balance is. So, you might have to take an extra step as a solopreneur to figure out if there is motivation or if there is a price that they are looking for. And you can ask simple questions like, you know, is there a number that you would like to sell your home for, right?

Is there a number that would make you comfortable that we could close quickly? Do you have a time frame of when you would like to sell? These are all qualifying questions that you could actually ask them. Do you have a time frame of you need to close by, right? What is the most important part to you about selling your home? These are all just qualifying questions trying to find a little bit more motivation because you as a solopreneur really have to juggle your time. Even if you aren't a solopreneur, these are great questions for you

to be asking if you want to dig a little bit deeper. What's the lowest price you need to sell a property knowing you don't have to pay any commissions, closing costs or fees and you don't have to fix anything? I personally don't want my lead manager saying that. But it is a question that if you need to figure out a little bit more motivation, then absolutely fine by asking that question. The types of distress that you might be hearing or looking for as you're having this are plenty. There's financial distress, there's physical distress, there's circumstantial distress. Circumstantial is like you're going through a divorce, you have a rental property that's been vacant so you're not actually making any money,

you just inherited the property, it's going through probate. Those are circumstantial motivations. You have a physical distress. Obviously, the house is falling apart, fire damage. They don't have money to redo the AC or the pool or the roof. It's been abandoned and it's just there's squatters in there. Those are physical distresses. Obviously, financial distresses is something I think we're all much more aware of, right, is the foreclosures, the, you know, bankruptcies. You lost your job. You have a state tax lien on the property. You owe back taxes personally.

You know, you have IRS liens. You name it, right? Child support, alimony, things like that, right? Where they physically have a financial distress. So those are motivations that you need to be listening for. This is what I have my lead manager do. Again, I am simply doing this. I'm just going to, we're going to wrap this episode up, but my two main principles of around our lead manager script are one, get information about the property, right? Again, your basics, the address, obviously bed, bath, square footage, um, anything that we need to know about the property. When was the last time you redid the roof or pool or AC? Anything that has big financial commitments, right? Do you feel, you know, have you put much work into the property recently, right? Anything you feel like I need to know about the property? Great. Now,

I got all that information. I have a good understanding. Then I want to tell them about me, right? Because they need to know what we do. You need to tell them there's multiple solutions to multiple issues. We are a local investor. We buy cash. There are no commissions. There are no repair costs. You do not need to spend any money. We can close quick and or we can close on your timeline. In fact, we could possibly, if the situation is correct, help you actually move and or find another place if you need such. So what we want to do is I actually would like to give you a fair offer for your home. To do so, it's best that we actually just come take a look at the home. We really find this to be a people-person business. So I'd really like my acquisition manager to come meet with you. We have an opening around two, can have the acquisition manager go meet and see the property themselves at two o'clock.

Great. Set an appointment. Now my acquisition manager goes. Again, if you are a solopreneur, you're handling it the same. You yourself are the ones going. So the way you can say is, you know, okay, great. I actually personally have an opening around two. I'll be in the neighborhood. I'd love to be able to see the home. I want to make sure that this is a good fit for both of us. Obviously for me, I want to make sure that you understand it's a person, people to people business. You might have some things that you need that can be better expressed as we meet. I also want to set eyes on the home. So does two o'clock work for you, right? That's the only, that's the only transition, right? So that's, that is what we want our guys to do, right? And so again, if you are in belief that you have a higher percentage of closing the deal

belly to belly, then get your butts there. Don't, you know, don't, uh, don't take the easy way out, man. It's so easy to take the easy way out. That doesn't do you any good. Get your butt there. This is going to take work. Meet with these people, listen to them, and get the deal wrapped up. That's what it's all about, guys. That's what it's all about. So, all right. That is going to wrap up our 72nd episode of the Science of Flipping podcast. Again, if you haven't been to the website, go to thescienceofflipping.com. Free e-book, The 15 Most Costly Mistakes An Investor Can Make. And I, your host, Justin Colby, will be right back at you next week. So thank you again for listening.

I really appreciate each and every one of you. I look forward to getting another episode again next week. I'm out. Peace.