Whew!

[Gary (MO) 0]

OK....one of the fsbo calls I called on tonight was a couple who have a home in the $150K range that is being rented out; they are building. The husband had me talk to his wife who is a real estate loan officer at one of the local banks.

 

She understood the concept, liked the concept and then asked if I had ever done this before (you think she could tell something from my interview with her?)so I could offer her references. She even said they needed the money but needed to sell their house. When I was truthful and told her I had not, she balked.

 

She gave me her address and told me to mail her references of people who I know that have done this before. I'm thinking I'm going to send her the 'letter' unless anyone has any ideas? (I'm not going to be able to wear my comfort zone after today...I think it is stretched waaaaayyyyy beyond belief!)

 

Thanks for any opinions! (and the hand-holding... )

Gary

[option8 0]

You could always send her MC's address

 

option8

[terateam 0]

I'm also a newbie. Waiting on my manual. I know no one that I could use as a reference. What should I do if/this comes up ?

[option8 0]

On a serious note,

 

She understood the concept, liked the concept and then asked if I had ever done this before (you think she could tell something from my interview with her?)so I could offer her references. She even said they needed the money but needed to sell their house. When I was truthful and told her I had not, she balked.

 

This is just an objection (in a long list of possible ones) that we need to become skilled at handling. The best way to handle objections is to make an emotional connection with the sellers.

 

Let's stop a minute and examine the emotional root of objection and we should be able to put it into perspective and skillfully address it.

 

Remember, she is in a tight situation and all she is doing is voicing her worst fears. What came out of her mouth is only the FINAL thought in the entire discourse she's having with herself. Here's a sample of the entire thought stream that she didn't verbalize:

 

OH NO! I can't sell my home! What am I going to do? We don't want to lose our new dream home. I'm stalling with the builders, already. I guess we are going to have to rent! How am I going to manage all of this? I don't want to be a landlord? The tenants will trash our home, then we'll never be able to sell it. Remember that they are dealing with these thoughts everyday and feeling the pressure of moving that house.

 

Then along you come with what seems like a good solution and her conversation continues. "This seems like a possible solutions! How do I know he know what he is doing?"

 

and out comes the inquiry into your experience.

 

So now you need to address this objection directly and honestly and push her back into focusing on her problem and her fears, not your experience.

 

My conversation with her would go something like this. I would validate her question by acknowledging her wisdom in being concerned. Inform her that although you have never done this particular transaction before, you have studied intensively and have business associates / mentors that have hundreds of transactions under their belts.

 

Now, you put the ball back in her court with a few question:

By when do they need to sell the home?

What will they do if they don't sell?

(there are a few possible responses here: Rent, Don't know or Stay put)

 

If she responds with the magic word "Rent" --- you jump in there with both feet!

 

Yes, Mrs Seller, this is a great alternative so you can get on with your life and move in into your new home, knowing this one is in great hands. (At this point, you need her to express the negatives of this...Ts and Ts, late night call, maintenence issues, collecting rents, evictions, etc...)

 

If she says "We don't know" then again, you jump in with both feet anyway with the same info, but you say the fearful words "Well... I guess you could always rent it out" and go down the same path.

 

If the answer is Stay put, then I'd go with "What a shame for you to miss out on your new home opportunity, when there realy is a pretty simple solution..."

 

Your solution is perfect for these scenarios. Your suggestions:

1) You can take a long term lease on the property and manage it for her, without the frustrations and costs associated with dealing with a typical property management company.

OR

2) With your specialize knowledge, you can locate a tenant/buyer using Michael's CA Strategy to put the property on auto-pilot and put a buyer in place TODAY to ultimately get the property sold.

 

Explain that this isn't a complicated process and they end up with "super tenants who are motivated to be home-owners" .

 

I hope this makes sense. I'd be interested in hearing everyone else's solution to this problem. Tapping into the emotions behind what people are saying is a powerful skill that will keep us from missing opportunities.

 

option8

[option8 0]

As I review the original post, I see that the property is already being rented out.

They are already 1/2 way there, but with the T, T & T problem (that's Tenants, Toilets and Trashed Property). Get them to voice those fears and to see how elegant your solution is and how it addresses all of those issues.

 

option8

[Gary (MO) 0]

Thank you option8. I had not considered these points - but I should have! What you are saying makes perfect sense. I will certainly call them back.

 

Although this might not turn into a deal, it will none-the-less be a good learning experience for me (and others reading this thread), thanks to you (and the others posting) who are willing to share your experience with the rest of us.

 

I'm kinda kicking myself that I didn't figure this approach out without your help!

Thanks again!

Gary

[moneynfast 0]

Great info option8 I love reading that. Gary I have not done a deal yet but I am moving slow, but I also am in this site daily reading, Even though I do have a mentor. If someone would ask me if I had done any deals. I would say no, but my partner has been doing it for over nine years. That is someone that I use to work under. I learn alot from him, and he is only a phone call away. So just be honest and do it.

 

 

MichaelR

[verbatim 1]

Since shes already renting it out now and is already 1/2 way there investing wise - are you sure she doesnt want the reference to learn & copy the technique you are trying to master?

[Gary (MO) 0]

I guess that's a possibility but I really didn't get that impression from her. Something to consider though....what keeps anyone from doing that very thing?

 

I had that same concern with newspaper ads....there are apparently several investors in the area but none are doing ads like Michael suggests. What happens if I move in and start running the ads? What keeps them from doing the same thing?

Gary

[-Tony- 0]

What keeps them from doing the same thing?

 

knowledge

[MichaelC 160]

Gary, first, it is not all that common to be asked for references. So, don't think that this is going to be a major stumbling block to getting started. A homeowner will ask about your experience on occasion, but it is the exception rather than the rule. I find that it generally occurs with newbs, probably because your inexperience/nervousness is evident.

Now, what to do when that question does pop up? You have several options, as I see it. You could simply lie and try and run a scam on the homeowner. I think we'd all agree this isn't a wise move and will probably end up doing more harm than good in the long run.

You can be flat out honest and tell the homeowner that you are brand new and looking to get started. Some homeowners will appreciate your honesty and not immediately reject you. Quickly emphasize your other attributes to bolster your argument as to why you can do the job for the homeowner.

Option8 offered some great advice on this, as well.

Worse case scenario is that you lose a potential deal. Don't sweat it. It's one deal and will not matter a whit as far as the big picture is concerned.

Also, as you are doing your deals, get into the habit of keeping a portfolio book. Each property you do a deal on should be photographed and placed in a binder of some kind. Include some info: the numbers involved, the homeowner's name and number, etc. After you have about half a dozen deals or so, walk into the next property you are interested in and drop your book on the table. The homeowners will flip through it casually. They may even ask you about it. If they ever ask for a reference I tell them to help themselves. Seeing that book gives you instant credibility and, so, the need to ask for references becomes a moot point.

Although this might not turn into a deal, it will none-the-less be a good learning experience for me (and others reading this thread), thanks to you (and the others posting) who are willing to share your experience with the rest of us.

Truer words cannot be spoken. These experiences all build to making you wiser and, ultimately, successful at this stuff. I've always said there is no education like experience.

Finally, your concern about any homeowner doing this themselves is understandable but unncessary. Think about it........the average homeowner buys/sells three houses in a lifetime, and usually with the assistance of a Realtor and an attorney. We do three in a month, usually on our own from start to finish. Do you really think any homeowner can compete with you? I don't. Tony summed it up nicely: knowledge. They don't have the smarts, the know how, the correct paperwork. How do they verify tenant/buyer references? How much is the rental market? What the hell are these rent credits this guy Gary was talking about, and they're part of the down payment.....right ?? You see my point?

Same things with other investor ads in the paper. Who cares? You already know more than them. In fact, see for yourself. Play the dumb homeowner and call those other ads. Listen to their pitch and you'll soon see you have nothing to be concerned with. After any homeowner speaks with those other guys, you'll be a welcome relief.

[Gary (MO) 0]

Thank you Michael and everyone...words of WISDOM for sure!

Gary