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Is calling online ads still a viable means of getting deals?


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#1 randian

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Posted 09 February 2015 - 04:36 AM

And how many hundreds of sellers do you have to call to get one? The manual mentions this as a deal source but sellers are so preconditioned to see you as a spammer. Obama's **** 3% down BS, which will cause another housing bubble just like the last, isn't helping things.



#2 MichaelC

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Posted 09 February 2015 - 10:49 AM

randian, I haven't cold called a homeowner in a very long time.  It isn't time efficient, and it can prove to be discouraging for a new investor, hearing homeowner after homeowner tell you to go away.  On the other hand, it's a good way to develop thick skin if you think you need it.  I prefer emailing, instead.  It's faster, and if the homeowner has no interest, they simply don't reply.  No wasted time on the phone, no negative vibes to deal with.

And, yes, the administration's latest gambit to allow folks to purchase houses they can't afford to own is all too reminiscent of the recent buying frenzy and crash.  I can't imagine they think it's a good idea, but for the votes it will buy them.  <_<  In fact, when I first read about this nonsense back in December, I mentioned it on The Naked Investor page on Facebook.



#3 randian

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Posted 09 February 2015 - 02:08 PM

I prefer emailing, instead.  It's faster, and if the homeowner has no interest, they simply don't reply.  No wasted time on the phone, no negative vibes to deal with.

What kind of response rates are you getting? For example, email 200 to get 5 positive responses to get 1 deal.



#4 MichaelC

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Posted 09 February 2015 - 02:31 PM

Can't say that I keep such specific numbers, but if I were to take what I think is an accurate guess, I think 200 emails gets me about two dozen replies, and in turn that will lead to one deal.  Of course, there are variables that will affect this:  location I'm working, price range, time of year, sometimes even luck is a factor.



#5 randian

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Posted 09 February 2015 - 02:55 PM

Can't say that I keep such specific numbers, but if I were to take what I think is an accurate guess, I think 200 emails gets me about two dozen replies, and in turn that will lead to one deal.

Once you strip out the stealth realtor ads and repeats I don't think there are anywhere near 200 distinct sellers at one time on craigslist. I doubt I can identify 50 different ones. A 1/4 chance of a deal is depressing. I'm also assuming that CL isn't silently refusing to forward your emails after you reply to a bunch of ads.



#6 Max0r

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Posted 09 February 2015 - 07:56 PM

My experience has been that finding a lead isn't hard. What's hard for me is wanting to talk to people. For some reason when I think of calling someone or getting back to them I just wanna do something else.

 

For instance I only cold called about 10 people and got two decent prospects (and some NASTY sellers too). Also I found a guy who does acquisitions for a big rehab company who sends me leads for pretty houses they don't work with. Out of six of those leads one texted me back and called me back and left a voicemail after saying yes to considering rent to buy.

 

To be honest the hard part for me isn't finding leads, it's handling them. I hate getting back to people, probably because I'm still so new and my business is so undeveloped that I have very little to bring to the table yet. I have to remind myself that I'm just collecting information for my teacher who's going to handle everything anyway, but so much of whether the deal happens or not rests on the first few minutes of talking. No matter how good my teacher is, I can easily screw things up before he ever talks to them. Granted it's true if someone's motivated it's much harder to screw things up, but I hate the feeling of offering someone something and dropping the ball because of my own incompetence.

 

I think after I've built up my website a little bit and worked on my buyers lists I will be much happier to engage prospective sellers. When I get a lead calling back I feel like I'm under siege. I wish I could just press a pause button and get back to them later when I built my business stuff some more. The bad news is the leads can die off just as quickly as they come in. The good news is, for every lead that dies a new one is out there waiting.



#7 randian

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Posted 09 February 2015 - 08:15 PM

That acquisitions guy is gold if he keeps sending you leads.

 

I'm not so great talking to people either but I'm a super-expert at not finding motivation. Either they want $20k up front to even consider LP, act ignorant and offended at me not being the end buyer, or want me to break the law ("I won't sign a contract but bring me a buyer and I'll think about it"). I'm also expert at sending 50 emails and getting 0 responses (not even angry indignant ones).



#8 Max0r

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Posted 09 February 2015 - 08:17 PM

With our unique talents it looks like we'd make a great team!!!!!!!!!!!!



#9 MichaelC

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Posted 09 February 2015 - 08:31 PM

With our unique talents it looks like we'd make a great team!!!!!!!!!!!!

:lol:

 

Max, why don't you have your teacher handle the leads from the get-go while you listen in?



#10 Max0r

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Posted 09 February 2015 - 09:15 PM

Max, why don't you have your teacher handle the leads from the get-go while you listen in?

 

Well, he mentions multiple times in text and video what to do, and he personally stresses that if someone doesn't want to deal with you it's better not to waste your time and just move on to the next instead of agonizing over the details. He did say however, that if we're absolutely desperate he might do some initial information collection calls with us. Normally we don't do the 3 way calls until I send in a property info sheet and it looks like something that might be workable. He's really strict about not wasting his own time and he tries to instill the same thing with students: don't waste your time.

 

I feel like I need to sharpen my teeth with experience a little more before I can call in the favor to have him do some initial lead contacts with me, after all I'm asking him to agonize over little details of marketing with me. They might mean everything to me, but to him it might be trivial, and perhaps rightly so.

 

Plus him and I have very different personalities, even though I like him. What works for him probably won't come off right with me. So I have to develop my own style. However I figure once I do a deal with him I have earned the right to see how he does it, if for no other reason than my own entertainment ;)



#11 Chris_MA

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Posted 16 February 2015 - 12:36 AM

Leads are leads, who cares where they come from. If a person owns a house, and is the slightest bit interested in selling their house, they're a lead. As MC said earlier on, calling craigslist ads is probably not your best use of time EXCEPT that it can give you a place to practice talking with sellers so that if you get tongue-tied or the phone call is awkward, no big deal. That way when you get better quality leads coming in, you're a little bit more comfortable picking up the phone and having a conversation with them... which goes a LONG way (they can probably tell if you're nervous and fumbling your way through the call).

 

Keep in mind when the Naked Investor manual was written, craigslist wasn't what it is today (was it even around? hell... were computers around? :-P sorry MC). Now more than ever, things are changing all the time. Adapt! The principles are the same, sellers situations are the same, their frustrations are the same (more or less), and the strategies are the same (Again, more or less)

 

Get good at qualifying sellers quickly... The faster you can find out that someone is NOT likely to be doing business with you soon and get off the phone with them quick, the better off you are. 

 

PLAN YOUR PHONE CALLS! There is a place between scripted and unscripted, and I personally think that the middle ground is the place to be.

Know how your seller calls are going to go (here's where talking to a bunch of unmotivated FSBO's can be good learning experience), what questions you're going to ask, how you're going to position yourself (important!)... 

Have a Plan B for when an agent picks up... those calls will probably go differently than if you are talking directly to a seller... know what you're going to say if an agent lead slips into your list.

 

Max0r, your post about having difficulty handling the leads once you get them reminded me of where I was a couple of years ago... I had a few deals under my belt but hit a patch of deals that went bad and got nervous, which lead to my wanting to avoid the phone as much as possible. Tried outsourcing it to a VA, tried answering services, even tried letting leads sit (no, they don't eventually grow into money trees). At the end of the day, someone's gonna have to talk to the seller and put together deals where there are opportunities to do a deal. Might as well be you, or at least you should learn it and be able to do it so that you can then outsource it and know that it's being done correctly.

 

I've noticed this... the less concerned I am about putting a deal together, and the more I'm trying to dis-qualify a seller, the easier it is to pick up the phone. When it's all about "come on, come on... let this one be a deal... say you'll give me the house for practically nothing and not ask any questions", of course you're going to dread picking up the phone... that's how it was for me.

Now I call a lead, let them know I'm looking to buy an investment property in their area (positions you without seeming like a scam) and ask them to tell me about the house (or if it's a house thats not been advertised for sale, i.e. responding to an absentee owner letter, start with "Just wanted to find out if you were thinking of selling, or did you plan on keeping the house?")

 

From there, let them talk for a short bit about the floors, cabinets, and fenced in back yard, but quickly start feeling for signs of un-motivation... about to list with a Realtor, could sell now or sell 10 years from now, just installed new appliances and a new roof, living in the house currently and need to find a place to buy before selling, etc.

Since most of your leads won't be motivated sellers, pick out the unmotivated, unqualified ones quickly and kick them to the curb. You'll get less rejection (you're doing the rejecting now), phone calls will be quicker (once you've identified them as unmotivated, point them in the right direction and excuse yourself quick!), and you'll be less nervous next time a new lead comes in because your expectations are realistic, and once you've disqualified them you can rest easy knowing that you did your job and aren't missing out on anything good!

 

If you're just screening leads for your teacher, have a few simple questions ready to feel for motivation, jot down some notes as they're talking, and thank them for their time and let them know you'll discuss their house with your partner and get back to them. Very little to screw up (though believe me, been there done that!)

 

DON'T BE AFRAID OF THE PHONE!!!   :-)


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#12 MichaelC

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Posted 16 February 2015 - 09:15 AM

Excellent post, Chris. . .even the cheap shot you got in! B)

Thanks for sharing your experience and insights.


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#13 ellis

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Posted 16 February 2015 - 11:06 AM

Great Post Guys. My problem is I do not know what to say or email initially. Can someone give me some tips?



#14 Chris_MA

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Posted 16 February 2015 - 01:02 PM

Ellis, don't make it more complicated than it needs to be. Don't expect to close a lease option deal on the first phone call, just have a 3-5 minute conversation with the seller (with you asking the questions, that is). Lease options are no longer my primary focus (wholesaling / wholetailing now, though L/O's are always a direction to go in when the situation is right), but after struggling with how to position myself for years, I think that for me at least, coming in AS AN INVESTOR BUYER (not property manager, business owner, consultant, etc.) and not instantly going in the lease-option direction is the easiest, simplest, and quickest way to get in the door.

 

In other words, even though in the back of your mind you're thinking "I'm looking for an opportunity to do a lease option here, not pay cash or owner finance or short sale", start the conversation off (email or phone) as if you're looking to purchase an investment property for your own portfolio.

 

"Hi, I saw your ad for the house on W. Main St in Anytown... I'm looking to buy an investment property in that area and was curious if your house was still available?"

 

"Yes, it's still for sale..."

 

"Awesome, I saw the craigslist ad and it caught my attention... Is this a rental property for you, or do you live there yourself?" (if it's a rental property, you'll find out if it's rented, how much it has/could rent for, what happened with the last tenant, did the owner have a good experience as a landlord... if they live there, find out why they're moving, where to, and when... these are all clues to whether or not there's motivation)

 

"We've lived in this house for the past 25 years... we had the place custom built, raised our kids here, added on a living room and a porch to the back of the house about 15 years ago, just re-tiled the bathroom upstairs, blah blah blah"

 

"Great, it sounds like a nice place! How come you want to sell it?" 

 

"Well, the kids are off at college in Wyoming and my wife just got laid off, I'm self employed so we're thinking of moving somewhere to be closer to the kids"

 

"Wow, moving to Wyoming, that sounds interesting! So you have a place lined up out there already?" (Big clue as to their timeline / motivation)

 

"No, we haven't started looking yet. We're getting the house ready to list with the Realtor who lives down the street and sells all the houses in this neighborhood, we want to sell this house and use the money to pay cash for a house out in the mountains"

 

At this point I would put them in the "Unmotivated" category, say something like "You know, looking at these pictures and talking to you, I'm not sure this is the right property for me. I'm looking for something I can buy at a discount or with owner financing built in, and even though I could save you the 6% realtor commission, you're house is in great shape and you'll probably be able to get more by going ahead and listing with the Realtor. Mind if I keep your contact info in case things change down the road?" and GET OFF THE PHONE! save your notes, schedule a 90 day follow-up to see how things are going, and move on to the next lead. Don't mention the word lease-option, don't mention tenant buyers, don't try and pitch them on above market prices and top-quality tenants... it's not the right time, and they'll respect you for shooting straight and telling them that you're not their best bet... at this point in time.

 

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 

On the other hand, a motivated seller call might go like this (based on a real wholesale lease-option deal that put $8k in my pocket)

 

"Hi, I saw your ad for the house on W. Main St in Anytown... I'm looking to buy an investment property in that area and was curious if your house was still available?"

 

"Yes, it's still for sale..."

 

"Awesome, I saw the craigslist ad and it caught my attention... Is this a rental property for you, or do you live there yourself?"

 

"Oh, gosh... well, I was living there with my soon to be ex-husband, we bought the house back in the late 90's, but that bastard is living in London now with his secretary and I've moved into the condominium we own in the city. Out daughter goes to school in Anytown and she's been staying at the house while we move our stuff out to a storage facility"

 

"Wow, sorry to hear, sounds like a lot's going on. How long have you had the house for sale?" 

 

"Thanks... we listed with Joe Blow Realtor back in August, he said he could sell the house in 90 days or less but here we are half a year later and we're probably going to have to list with Suzy Q the agent down the street, but we wanted to try and save the commission if we could. We re-fi'd and don't have much equity, so if we can eliminate the commission we can lower the price a little bit and hopefully sell it quickly, I'm stuck making the mortgage payment on the condo and the house and I don't know how much longer I can keep up"

 

"Hmm, so it was listed for 90 days and no offers?"

 

"We had a few low-ball offers, and one couple wanted the house but couldn't get the financing lined up..."

 

"Interesting, so people are interested but just can't afford your asking price or get financed... I'll tell you what, a lot of the time I look for properties that are in need of some repairs or improvements and I can pay cash at a discount, but this house looks like it's in good shape so I wouldn't expect you to discount the price... Let me crunch some numbers and call you back, I think there could be a way for us to make this work. Is this the best number to reach you at?"

 

BAM!

 

Not a done deal yet, but at this point you've got MOTIVATION and FRUSTRATION!

(in this real life example, the soon-to-be-ex-husband was happy to sign anything to get the wife off his back, so after explaining the lease option to her she signed, he signed, they then hired the second real estate agent, and I sold the lease-option to a tenant-buyer within about 60 days where the second agent still hadn't brought a serious offer to the table.)

If you're new to putting deals together, excuse yourself to "crunch numbers" or "do your homework" and arrange to get back in touch with them that day or the following day. 

 

If you're working with a coach, bring them this type of lead and let them help close the deal.

If you're on your own, do your comps and find out what similar houses are selling for, how long they stay on the market, what that size house would rent for, what your competition will be, etc.  then review your Naked Investor manual a few times so you are comfortable explaining how a lease option works to the seller. When you call them back, your approach can be "Hey, I'm a cash buyer looking for rental properties... your house caught my eye, it looks really nice and while your price is fair, I can't pay nearly that much as an investor, but would you consider renting the house for a couple of years and sell at the end of the lease?"

 

Since you have qualified the seller as MOTIVATED, and they've tried other options without luck, you can come in not as a salesman for some real estate company, but as an investor who has a potential solution for their frustrating situation.

 

THE KEY IS MOTIVATION! Once you've identified a pain, an urgent need, or otherwise emotional state of mind regarding the house, then it's time to pause for a second and analyze your options. Whether wholesale, lease option, listing (if you're an agent or have one you refer sellers to), etc., figure out one or more options for the seller and get back to them to discuss those options.



#15 Chris_MA

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Posted 16 February 2015 - 01:13 PM

Excellent post, Chris. . .even the cheap shot you go in! B)

Thanks for sharing your experience and insights.

Thanks, MC. You know I poke fun if your antiquity in good fun...

Out of all the thousands of dollars I've spent on education, the Naked Investor manual has gone the farthest in the "bang for the buck" department. I guess wisdom comes with age, so be proud! hahaha






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