The Science of Flipping - More Deals With One Strategy
Episode Date: December 15, 2021The #1 training and coaching system to launch, grow, and scale your investing business!๐๐๐๐ซ๐ง ๐๐จ๐ซ๐: http://www.thescienceofflipping.comย Become a ๐๐๐๐ ๐๐๏ฟฝ...๏ฟฝ๐๐๐๐ and get access to exclusive training and resources:https://insider.thescienceofflipping.comย ๐๐๐๐๐๐๐๐ ๐๐๐ ๐ ๐๐๐ ๐๐๐๐๐๐ ๐๐:ย โ๏ธ Science of Flipping Academy ย โ๏ธ All the systems and software I use in my businessโ๏ธ All the tools you need to run your businessโ๏ธ All my Scripts, Contracts, Spreadsheetsโ๏ธ Special Discountsโ๏ธ And Much More...ย ๐๐๐ฏ๐ ๐ ๐ช๐ฎ๐๐ฌ๐ญ๐ข๐จ๐ง?Get immediately connected with a team member on messenger:http://split.to/tsof-messengerย ๐๐๐ฌ๐ญ ๐๐๐ฌ๐จ๐ฎ๐ซ๐๐๐ฌ ๐ ๐จ๐ซ ๐๐ก๐จ๐ฅ๐๐ฌ๐๐ฅ๐๐ซ๐ฌโ ๐๐๐ฌ๐ญ ๐๐๐๐ฅ ๐๐ฌ๐ญ๐๐ญ๐ ๐๐จ๐๐ญ๐ฐ๐๐ซ๐: http://bit.ly/tsofsoftwareโ ๐๐๐ฌ๐ญ ๐๐ซ๐ข๐ฏ๐ข๐ง๐ ๐๐จ๐ซ ๐๐จ๐ฅ๐ฅ๐๐ซ๐ฌ ๐๐ฉ๐ฉ: http://bit.ly/tsofd4dโ ๐๐๐ฌ๐ญ ๐๐ค๐ข๐ฉ ๐๐ซ๐๐๐ข๐ง๐ ๐๐๐ซ๐ฏ๐ข๐๐: http://bit.ly/tsofskiptraceโ ๐๐๐ฌ๐ญ ๐๐๐ฑ๐ญ ๐๐ฅ๐๐ฌ๐ญ๐ข๐ง๐ : http://bit.ly/tsoftextโ ๐๐๐ฌ๐ญ ๐๐ข๐ซ๐๐๐ญ ๐๐๐ข๐ฅ ๐๐๐ซ๐ฏ๐ข๐๐:: http://bit.ly/tsofmailโ ๐๐๐ฌ๐ญ ๐๐๐ญ๐ ๐๐ซ๐จ๐ฏ๐ข๐๐๐ซ: http://bit.ly/tsofdataย ๐พ๐๐๐ ๐๐๐ ๐ท๐๐๐ ๐ฏ๐๐๐ ๐ป๐ ๐บ๐๐ ๐จ๐๐๐๐ ๐ฑ๐๐๐๐๐:ย โJustin is one of the best trainers in this space. He really gives everything to his tribe.โโ Brent Daniels (TTP)ย โJustinโs ability to connect with people and help them understand what he is teaching, is unparallelledโโ Kent Clothier (REWW)ย โWe have been in the trenches flipping homes in Phoenix for over a decade, he is one of the best to do it.โโ Sean Terry (Flip2Freedom)ย ๐๐๐จ๐ฎ๐ญ ๐๐ฎ๐ฌ๐ญ๐ข๐ง:Justin Colby is the founder of The Science of Flipping Podcast and The Science of Flipping Coaching Program and is an active Real Estate investor having flipped over 1500 homes in multiple markets across the U.S. Justin runs an 8-figure real estate wholesaling business that closes 20+ deals each month in multiple markets across the U.S and has helped 1000s of clients learn how to become successful real estate investors.ย Justin subscribes to the philosophy of "Wholesaling To Wealth" and is the foundation of his coaching program which teaches you how to get started wholesaling or streamline and scale an existing wholesaling business as well as build long term wealth through wholesaling, flipping, and building a rental portfolio.ย Subscribe To Justin Colby:http://youtube.com/justincolbyย View All My Videos:https://www.youtube.com/c/JustinColby/videos ย ย
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Yo, yo, what is up, everybody?
Welcome back to the Science of Flipping podcast.
I am Justin Colby.
On this episode of the podcast, we are going to talk about the one main strategy I use and I train my team to use to help negotiate further down on price with a homeowner who is interested in selling right away.
Now, this podcast, if this is your first time here, I'll tell you this is all about real estate investing and building a business that is not just transactional. It's not just a wholesaling business or a wholetailing
or an ovation or a flipping business, but also a business that can be built into building wealth.
So being able to scale a transactional business such as wholesaling or flipping and turning it
into a wealth building machine, that is what you will find here if this is your first time to this
podcast. If you're listening to me right now on iTunes,
I appreciate that. What I appreciate even more is if you could drop a five-star review,
that would be greatly, greatly appreciated. And for those that know, awesome. For those that don't,
I also record these on video and they're over at my YouTube channel. So just go to YouTube,
look me up, Justin Colby,
and subscribe to that channel because I drop a lot of videos a week, mostly about real estate,
business, and financial advice as well. And so this episode is because I had a great coaching call with some of my students yesterday. And one of the biggest hurdles they were coming up with was when a seller is unrealistic on price.
And so we went over some of the strategies that I use, but really, really is the word I was looking for there.
Really, one strategy is one I use predominantly. Okay. And it's a strategy that every single person can use regardless of your salesmanship or not,
whether you have a lot of history of being a good negotiator and good salesperson or not.
This is the strategy that I use predominantly when speaking to a homeowner.
And it's this, I remove the fact that I'm the decision maker. I take it away completely.
And I know for most of you guys, that sounds counterintuitive.
Yeah, but Justin, I built a business so I can make the decisions and I want to be the
man and I want to call the shots and I want to make the offer.
But I want you to put yourself in their shoes.
If you aren't the man, if you can't make the offer or will man, if that makes sense there, right?
If you aren't that person, then they really don't know how to handle it, right?
Because they're not negotiating against you.
They're negotiating against someone they've never met or not on the phone with.
So now they're going to give numbers and the negotiation can kind of start, but they realize they're not talking to the person. Well, in that case, then you have someone that really is going to lob some numbers
out there by hoping, but you can then reframe the conversation to have bad guys, right? So then
there's the good cop, bad cop scenario that you are creating because there's someone else that's going to be making the offer.
Now, by the way, just so we're clear, this can be used in every setting, in every scenario ever when negotiating.
So, for example, if you and your friends are talking about going to dinner at a certain place and you don't really want to go there,
you might say, hey, let me check in with my wife to make sure that she feels like Mexican food.
And now you're not the bad guy because you don't want Mexican food. You're actually kind of
using someone else. So that's a little sidebar there. So if you are someone who is negotiating
directly with a seller, which I hope you are, because that's really the business, right?
The business is wholesale your way to wealth, create the opportunities through wholesaling to start to build wealth.
So hopefully you are buying direct from seller.
And if that's the case, here are the two people that are bad guys in my business.
So I have strength when negotiating.
I have strength because, listen, I think we could
pay around that number, but I'm not certain. So let me get some clarity. I need to speak to my
contractor partner. Now, my contractor partner likes to spend my money, so he wants to make sure
that we're on budget because if I don't give him a budget, then he's going to go crazy. So he needs to make sure he draws up a good remodel proposal based around everything that we know about the home. So then
he can talk to my second business partner, which is my cash partner. A cash partner brings a cash.
So if you can imagine some geeky guy in the corner always looking at a calculator running numbers. That's my cash partner.
Now, the two of them need to see eye to eye, Mr. Seller, for me to get an approval of giving you the offer.
So while I think we're probably close to your number, I'm not 100% certain.
So I'm going to have to talk to them first.
Now, as I do that, if you could tell me anything that you've done with major repairs.
Have you replaced the roof?
Have you redone the pool? Have you had to replace the AC? Anything that has a big $10,000
price point or more? Have you done any of that? No, I haven't. Have you done any major remodel?
Have you totally, completely redone the bathrooms, totally, completely redone the kitchens?
Anything major over a $10,000? No, I haven't. Well, Mr. Seller, knowing what I know, and I've bought a lot of properties in my time,
and I specifically say I bought nearly 2,000 in my time, the number you want may not, I
might not be able to get there.
And by the way, Mr. Seller, that's okay.
It's actually okay because I can't buy everyone's home.
I just, I can't do it, right? I'm not the actually okay because I can't buy everyone's home. I just,
I can't do it, right? I'm not the right fit. I can't pay top dollar for everything.
Obviously, Mr. Seller, I'm an investor. So if you start with my number, the number I'd give you is
$1. I will give you $1 to buy your home. And the number, if I start with your number that you're
going to give me is 10 million. So we need to find a way to come to a number that we both like, right? So I just don't know if I can get to your number. It seems based around the age
of the home and the fact that you haven't done any of these major, you know, repairs and or you've
not done a major remodel. I don't know if I'm going to be able to get there. And then I'd be
quiet. So what did I do there? Well, I took myself out of the decision-making process.
I now put myself to befriend the seller. Okay. Now I can actually say, Mr. Seller,
I really would love to buy the home. I ultimately, I'm not the end decision maker here.
What can we do here? Right? Like, I don't think we can get to this number. Let's just use a hundred grand. I don't think we can get to a hundred thousand dollars. I mean, can we get closer to 90?
Can we get like, I don't know if that will work, but I can tell you, we bought a lot of homes and
I need my contractor to see eye to eye with my money partner and make sure that we're on budget.
And then I allowed them to overcome, like I allowed them to
voice up whether they can move at all. Cause I'm not the decision maker.
And so I actually was training one of my acquisition guys this morning before I did
this podcast and this topic came up again. And so what I did is I said, Hey, I'm going to make
the next call, right? I'm going
to show you how I leverage this. So initially it came from my students, but then this morning I
was talking with my acquisition specialist. And so I got on the phone with a guy out of South
Carolina, as a matter of fact, and essentially it went exactly what I'm talking about. Hey,
his name's Mike. Hey, Mike, I'm not certain I'm going to be the right buyer. I'm not certain I can get to your number.
My contractor, you know, he's going to want to do a full blown remodel and spend a bunch of money.
And that's not always needed. Right. And I can, I can make sure that that doesn't necessarily
have to happen, but I am going to likely put some money into this. And then I have my
finance partner, my cash partner is able to make
me make the ability for me to close quick happen is a reality. So I need both those people to see
eye to eye before I can actually really present an offer. So let me ask you, Mr. Seller, I don't
know if I'll be able to get, he kind of lobbed out there 30 to $35,000 for this property. He said, I don't know if I'm going to be able to get there. I just don't. If you had to do some repairs and remodels to your home,
what would you do and how much would it be? He started listing it out. I'd probably take out
the carpet here. There's carpet on the stairs, which is weird. There's carpet in the bedrooms. I'd probably just leave the hardwood flooring. And, you know, I'd probably just go in and paint and maybe recount her,
but you could just reface the cat. I'd probably spend about $15,000. And in my head, I was
thinking it was going to take about $15,000. Now I know that number, but he and I were eye to eye
there. Now it doesn't mean I said, Oh yeah, good. 15teen thousand. I said, all right, I don't know if we're going to be able to get away with just doing that much.
I might have to try to talk my contracting partner into seeing the vision that you see.
So after I'm able to give them the pictures, I'm going to have to maybe kind of kind of make the argument that you're making, Cause if we do make that argument, I might be
able to get pretty close to your number. I don't know if I'm going to be able to get to that $35,000
number. Right. But I think if I can paint the picture that you're painting right now,
along with your pictures, I might be able to get pretty close. So that sounds pretty good.
Then he says, yeah, yeah, yeah. So then it's okay. Well, I'm going to go ahead and send the
pictures that you've given me. I'm going to give it to him. I'm going to give you a call back because he
and my cash partner have to discuss whether that's a realistic number and on budget for
the remodel. And if it is, then we're probably going to get pretty close,
but I still don't think we can get that number. Now, let me ask you, Mike,
I'm probably about a $5,000 more aggressive remodel. You're at 15. I probably said
it was closer to 25,000 in my head. Like we meet somewhere like 26 grand. Is that something that
you might be able to do? His reply was, I could probably do that. I said, Mike, okay, that is
very fair of you. I really appreciate it. Let me just see what my
contractor says, because he's going to want to do $50,000. And we all know that's not going to
happen, right? So let me see what he says. Let me see how we present that to my cash partner.
And I should have an offer to you today. Hopefully something that's going to make sense for you.
Perfect. So I took someone that started the conversation 30 to 35,000 down
to $26,000 right there because I wasn't the decision maker. I had to bring it by my contractor.
I had to bring it by my cash partner. And then I had to make sure they saw eye to eye so we can
present a value. And then I leveraged, Hey, you know, my gut feeling was probably closer to 20. You were at 15. We're not
far off. But if we could get somewhere in the 26, I think that would make sense. And I think I'm
probably pretty accurate here. And he said, yeah, I probably could work with 26. Now, the reality is
that's a good deal for us, right, at that price point. So I already know we're going to be able
to make him an offer. But the key there is I took myself out of the decision-making process and allowed my partners
to be the bad guys. They're the ones that's going to beat you up on price, not me.
Let me defend you. Let me paint the picture of a $15,000 remodel budget and see if we can get by
with that. And then I can give you more money. How's that sound? And that's the number one
strategy I use. Now I do a lot of different strategies, but the number one I do is I take myself out of the
decision-making, the offering position that is up to my contractor, my cash partner. And if they
see eye to eye, then I can present the offer that they came up with. Sound fair? Awesome.
So there you have it. And hopefully you guys are doing a lot of marketing,
get in front of a lot of sellers. And this is a reality, something you can use tactically,
whether you're wholesaling or flipping or you're buying rentals. Hopefully this helps you guys.
And listen, if you have not yet subscribed to my YouTube channel, make sure you do it.
Make sure you give me a bunch of likes on my videos. Make sure you comment and make sure you
turn on your notifications. And if you're on iTunes, make sure you give me a five-star review.
I appreciate it.
I'll see you guys on the next episode.
Peace.