Make Lots of Offers

[00:00:00] Mike: [00:00:00] Hey everybody, welcome back to the show.

Today’s going to be a good one. I’ve got my buddy, Joe McCall

with us here. Joe and I have been friends for a long time. We actually haven’t talked all that much until recently. We started bantering a little bit and catching up on lost time and of course talking about what’s going on in the market and all those things.

So it’s been good catching up with Joe. Today we’re going to talk about the importance of making offers.

We all know the more offers you make,

the more deals you’re going to get, and we’re going to talk about kind of what’s changing in this market, how to make sure you get more deals done, and you can move the deals that you do get.

Welcome to real estate investing secrets. We’re all looking for freedom and the opportunity to live better, more fulfilling lives, but most of us were trained our entire lives to work for someone else and chase their dreams. How can we use real estate investing as a vehicle to achieve financial freedom?

My life is dedicated to answering your real estate investing questions and helping you build an investing business that allows you to change your life. And the world around you and to enable you to turn your dreams [00:01:00] of financial freedom into a reality. My name is Mike Hambright from flipnerd.com and your questions get answered here on the , on the real estate investing secrets show.

Hey Joe, welcome to the show.

Joe: [00:01:12] Hey, Mike, how are you man? Good, good to see ya. I’m glad to be here.

Mike: [00:01:16] Of course. I saw you just a few days ago cause I was on your show. We’re kind of swapping shows here, but uh, but it really has been a while since we’ve, uh, talked to, uh, up until, I guess maybe last month we talked, but, um, cool buddy.

Well, it’s an interesting time we find ourselves in here right.

Joe: [00:01:32] You know, I’m excited. I’m the optimist when it comes to this market, what we’ve got going on. I’m excited about the opportunity. Um, you know, they say money doesn’t disappear. Wealth doesn’t disappear. Wealth transfers, you know, and so I remember in 2002.

2001 I read a book called who moved my cheese. And even at that time I was working in corporate America. I had a civil engineering degree and I was working for a big engineering company and I was [00:02:00] thinking a lot about, well, what do I want? What am I going to do in my career if the cheese moves. W how do I know where the bet next opportunities are and things like that.

And, um, so I’ve always been thinking about that and I’ve been thinking especially about that the last couple months here with the whole Corona virus stuff. And yeah, where’s the cheese moving to? Well, in some areas it’s not really moving. Um, some areas it is, but I think what’s more important now than ever are the fundamentals, the fundamentals, and I say this all the time, what’s the number one rule in real estate?

Make offers, make offers, make offers. It’s not location, location, location, right? It’s make offers. Nothing else matters. And I heard, like I heard this one time too, like your speed income is directly proportional to the number of offers that you make. Plain and simple, right? Yep. Income come as directly proportional to the number of offers that you make.

So if you want to make a lot of offers, I mean, sorry, if you want to make a lot of money, you got to make a lot of offers. That’s [00:03:00] right. That’s really not that difficult. I, you know, I’ve been coaching people for a long time and I really like that part of the business. And the first thing I always ask somebody, you know, after I started working with them, I give my students a scorecard and I say, all right, let’s look at your numbers.

How many offers have you made in the last week? And every single time somebody comes to me and is struggling or complaining or whining and it’s like, this is too hard, or whatever. I’m not making, you know, I, I’ve talked to every seller says, no, every seller rejects my offer. How many times have you heard that?

Yup. All right, well, let’s look at your numbers. Pull out your scorecard. How many offers have you made in the last week? The last month? I don’t care. Tell me one to five. That’s exactly, you know, so. It’s just, is that simple? It really is. I just started a 30 day accountability coaching program thing to my own audience.

You know, and it’s, as we’re recording this, it closes in like eight hours. But, [00:04:00] um, it’s a group where I’m taking some people and we’re gonna be holding each other accountable to making five offers a day. Five offers a day. I used to try to encourage people to talk to five sellers a day. I’m like, Oh man, that’s too easy.

Let’s do five offers a day. And uh, some people think you’re crazy, but here’s what I’m telling them. I was like, listen, I’m giving you permission to make stupid offers. Okay? Just go to Zillow, make an offer. It’s 60% of Zillow. Like that’s like, so we’re teaching them in the first few days, uh, how to find, you know, I, I’ll show you what word doing.

I have my notes right here from my coaching call this morning. There’s like real simple, three to four ways you can get leads today to start making offers on, okay. Number one old leads. We all are sitting on old leads, right? Just pick up the phone and start calling old leads of yours. And if you don’t have any, find a wholesaler or another investor who does and start calling their [00:05:00] old leads, okay.

And just partner with them and say, listen, you know, if you pay me a few grand for every deal I get under contract and start calling old leads and just making offers. Number two, I’m calling rentals on Zillow, Craigslist, Facebook marketplace. Go section eight.com military by owner.com start calling landlords.

Of rental properties and property management companies, and just ask them, Hey, I saw your rental here. You wouldn’t be interested in maybe selling it, would you? Right. Yup. Um, did I say it just

Mike: [00:05:33] to be landlords these days?

Joe: [00:05:35] Oh, there’s lots of tired landlords these days. You know what’s funny too? Maybe not funny, but serious.

I’m seeing more and more pictures of rental properties being advertised right now on Zillow that looked like Airbnb photos. I wonder why that is, Mike. Yeah. Um, the number. So that’s number one is, um, old leads, number two, calling landlords and you can get their phone number or you can message [00:06:00] them in Facebook marketplace.

You know, um, the other related to that, every time I’ve done this, it works always works really, really well. And my students works well too. Sending yellow letters to the owners of rentals on Zillow. Cause a lot of the times the rentals on Zillow are, um. They’re, they’re being advertised by property management companies, right.

Leasing agents. Sure. If you call the number on that ad, it’s going to go to the property manager will sending yellow letters to rentals on Zillow. I get incredible good response rates with those. That’s great. If be shot, the

Mike: [00:06:31] tax records look up the owner’s address, the tax records or something, the

Joe: [00:06:33] tax records, even if the address, the property address the same as the mailing address, I still send them a letter anyway.

You’d be shocked if you go in and look. You pull all the Reynolds from Zillow and look to see which ones are showing up as absentee owners and County records. It depends. It varies on the price range and where you are in the market and stuff like that. It’s anywhere from 10 to 15 to 20% 10 to 20% of the homes listed for rent and Zillow are not yet listed as [00:07:00] absentee owners, but guess what?

The house is vacant. There’s nobody in it right now, and they’re not getting any other direct mail or marketing. From other investors because they’re not showing up as absentee owners yet. Right? So yellow letters work really well, and then that’s going to cost a little bit more time. That’s a bigger investment of money.

And you know, you send out the letters and you get the calls back, but yup. Uh, the second, the third, the third thing I’ve been teaching them to do, to make offers, like quick, you want to make offers today, five offers a day. Go to Redfin. Go to Zillow, I prefer Redfin because I think Redfin matches more closely to the real MLS in most markets.

It’s not available in every city, but Redfin is really good. And you can go in, as Eric show me all of the properties in my farm area, um, in my price range, you know, whatever that has been on the market over 30 days, 60 days, 90 days, right? Yeah. And then what I did as I was just demo demonstrating this earlier today, I said, I went to Redfin, I went to st Louis County.

I said, show me all the properties [00:08:00] under $100,000 that have been on the market longer than 60 days. Hmm. And there were a ton of properties in there that for some reason just haven’t sold yet, but they needed a lot of work. These are properties that only investors would buy, and a lot of investors are still buying deals today.

Right. But why hasn’t that property, it’s been 60 days. Why hasn’t it sold yet? The price is too high. Right. You know. It needs too much work. And you know, even though even if it needed a lot of work, that property would have sold if the price was lower. So now it’s sat on the MLS for 30 60 90 days. You think maybe the seller’s getting a little bit more motivated.

They’ve had some time to cook. Maybe that realtor’s getting motivated too. They’re like, I just got to get rid of this thing. So go to Redfin. Look for older listings that had been on the market over two to three months that need work. Call the realtor up. And say, Hey, I like this property here. I’m just curious.

I’m an investor. Why hasn’t it sold yet? What’s going on? Is there, you know, is there something wrong with the property? It looks like it might be a [00:09:00] good deal. Well, I dunno, whatever they say. And then he can say, well, listen. Or they negotiate how negotiable is the owner on their price? I dunno. Just make an offer or whatever.

Right? And now you’re going to find to the realtors that are listing those kinds of properties, they’re more investor-friendly and they’re, they’re easier to talk to in many ways, and then just make an offer to them. And when it comes to making, this is what I’m telling everybody, and I’m kind of turning this into a lesson to teach them, like, listen, you shouldn’t be on the phone longer than like three to five minutes with each person, you know, as you’re calling them or texting them, like don’t be on the phone longer than three to five minutes.

Then go to go to Redfin, go to Zillow, and just, it shouldn’t take you longer than three to five minutes to make an offer. What I recommend is if you’re looking for cheaper, uh, rental properties that need work, you know, just go to Redfin and look at the souls from the last six to 12 months. Take an average of the, like the lowest five, take the average of the lowest five and multiply that by [00:10:00] 80%.

There’s your cash offer, right? If it’s a nicer home, like medium priced and above, just take the average of maybe Zillow and the appraisal. And multiply that by 70% or whatever, just, but the point is this, and I’m giving people permission to make stupid offers. Just send an offer. You’re not committing yourself to anything.

You’re not sending them a signed contract. And I’m telling people, just send, it could be an email, it could be it needs. You need to talk to them and it needs to be in writing, but just send them an email and a letter. Just say, Hey, Jim, it was nice talking to you today about your house at one, two, three main street.

Uh, before we do all the paperwork and all that, I might just be able to offer something in this price range, or would, would this probably work or not? And then just bullet point your offer, I’ll, I’ll pay you 70 grand in cash or I’ll pay you 60 to 70 grand in cash. I can close. And, um. 30 days, you know, with an extension to the Corona virus or I, I, I, you know, and attached is my proof of funds letter or whatever.

That’s an offer [00:11:00] for me. That’s a written offer. I don’t like verbal offers, although you should do that, but I like something that I can send it to them in writing, send them an email. I also recommend to tell, I’m telling people printed in a letter and send it to them in the physical mail. The competition’s not doing that.

So this is what happens. Now, you’ve made five offers a day, five days a week. That’s 25 offers a week. In four weeks, that’s a hundred offers that you’ve made. Chances of you getting a deal. Maybe it’s not that great, okay? But now you’ve got a hundred leads you can follow up with. And over the next three months, four months, five months, you start following up with them every month.

You call them, Hey, I’m just following up on that offer I sent ya. Have you sold your house yet?

Mike: [00:11:40] Yup.

Joe: [00:11:41] Follow up in those. That’s where the deals happen. That’s where the money happens, right? Yeah,

Mike: [00:11:46] for sure. It’s funny, all the stuff you just explained well. Absent the tactics or where to go. Like, you know, I’ve been coaching for a long time too, and I tell people the same thing.

So we focus a lot on paid advertising, generate leads through paid advertising. And we have, we actually [00:12:00] use Podio. We have our students, we have an accountability journal where they fill out a survey every week, like, how many leads did you generate, how many offers did you make? And we’re asking them, you know, and I, I just do, I just hand you this while we were talking here, but I kind of draw the same thing, a little funnel.

I’m like, Hey. If you didn’t get 30 leads from paid advertising, you’re not going to get one deal. So how many leads, how many leads did you get? Of course, you know, if you’re offering off the MLS, it’s probably not 30 to one if you’re a good closer, maybe it’s 20 to one it depends on, you know, a lot of things, right?

If you’re offering off the MLS, maybe it’s 101 I don’t know. But your point is, is like if you’re not doing those activities, you’re not going to get any deals. So when you’re belly aching or you’re upset about how you haven’t gotten a deal yet. If you haven’t put something in the top of that funnel, why would you expect it for something to

Joe: [00:12:40] come out the bottom?

And you know what’s cool about this as a coach, it makes it so much easier to coach people in our Facebook group right now because we’ve told them, listen, we’re not going to give you another course. You are a no what you need to do. And most people out there, they already got it in their head. They already know what to do.

They’re stuck in professional student mode. Right? Right, right. And they’re stuck with analysis [00:13:00] paralysis. So whenever a question comes in, like. Well, I don’t want to call anybody out, but somebody submitted a question about like, um, Oh, it wasn’t like voicemail. Like what should I put on my voicemail? And I S I responded back to them.

Have you made your five offers yet today? That was my answer to the question. Right. It makes it so much up

Mike: [00:13:18] getting distracted with the other stuff.

Joe: [00:13:19] Yes, they were. They were worried about, um, Oh, there’s like three I did. All I did is I just copied and pasted my question to their question in the Facebook group.

Don’t worry about it. If you’re, if you’re worried about like what kind of a envelope should I use and what kind of paper should I use, or what about my websites? What about my LLCs? I’m, I’m not, what if I’m under 18 what if I’m outside of the United States though? Those are good, important questions, right?

But this accountability group that we have here. I’m not giving them any courses. I’m not giving them any new training materials. I am giving them my scripts and my calculators and my one page contracts, you know? So if they want to use that, but I’m saying, [00:14:00] guys, stop worrying about steps seven and eight when you’re not even doing steps one and two right now.

Right? Yeah. Stop worrying about that stuff. Like, here’s the cool thing about this business. If you get a good deal, you can find partners, wholesalers that can partner with you. I’ve done so many deals with wholesaling partners, guys that already have the title companies, they already have the money. They already know how to double close or how to assign.

They already have the realtor’s license. They already, if they need it, you know, like they already have the buyers. So like. You can, if you’re just getting started, you can just do the marketing. You can make the talk to sellers, make the offers, do the followup, and tee up a hot lead to this local wholesaler guy or girl, and they can partner with you and you can split it 50 50 yeah.

If you

Mike: [00:14:49] get the deal or worry about the rest later.

Joe: [00:14:51] Yeah, exactly. So that’s my whole focus of this accountability group that I’m doing right now is just make offers. It’s okay if you make a mistake. Because you’re not [00:15:00] sending a signed contract, and even if the seller accepts your offer, well then you still have the contract to fill up, but, and then you can renegotiate if you have to.

Mike: [00:15:07] Right, right.

Joe: [00:15:08] Yup. Here’s, can I say one more thing? Yeah, go ahead, Joe. Some of the best advice that my coach ever told me when I was getting started is if it’s close enough, go ahead and get it under contract. If it’s close enough, I thought, cause I’m the engineer analytical, like I want to see the blueprint, I want to see steps one through eight.

I want to get all my I’s dotted, all my T’s crossed. Cause when I don’t, did you ever take advanced math in college? Uh, calculus and all that? I

Mike: [00:15:33] probably, yes. To some level I did not that, not that it’s helped me in any way or that I remember any of it, but, well, definitely not calculus. Yeah.

Joe: [00:15:40] Okay. Well there’s, there’s a problem and then there’s one answer.

There’s only one answer. Right. And there’s only one path to that answer, right? And there’s not like multiple different ways. But here’s the thing with real estate, it’s not saying like there, there is a, people are involved, people are different. Every house is different. Every deal is different. There is no formula [00:16:00] black and white blueprint that this has to happen.

And then when I was in engineering and construction, we had these thick blueprints and we build. Properties and we build power plants off of these plans. Everything was figured out in advance, but it does not work that way in real estate. So if it’s close enough, get it under contract. Like I’m telling people, forget about repairs just to maybe like $5 $10 $20 a square foot.

You know, if the seller says it doesn’t need any work, it’s fine. It’s rent ready, and you’ve not seen any pictures. Do five bucks a square foot. If they say, you know, if you can tell from the pictures it needs cosmetics. Paint carpet, 10 bucks a square foot if it’s a full gut rehab, 2020 $5 a square foot, and then just rounded up to the next $5,000 so if you come up with, you calculate like $7,800 just rounded up to 10 all right?

And that’s what I think we need to start training folks who are getting started or who are in a rut. Like, stop over analyzing the ARV. [00:17:00] Just take the average of like Zillow, Eppraisal, Redfin, realtor.com you know all these other sites that give you estimated values. Who cares if they’re wrong, like, but it’ll average them or me.

Take the median of them and that’ll get you close enough just to 10 bucks a square foot. That’ll get you close to

Mike: [00:17:17] this as you get it. And then you have to, you have to regroup. But the truth is, is. More than nine times out of 10 you’re not going to get it. So don’t, don’t focus on all the details of what if you get it when 90% of the time, plus you’re not going to get it anyway.

So, right.

Joe: [00:17:31] Yeah. Oh that’s so gay. Cause even when I’m making an offer on a listed property, I’m not sending a signed contract to the realtor. I’m just sending an email or a letter just saying, Hey listen, I think before we get all into the contracts, would your client maybe accept something in this range?

Or you know what? I can maybe get them that price if they would do owner financing. What if we did it like where I can give them? And then bullet point in the email, the price, the down payment, the interest rate, [00:18:00] the amortization, the balloon, you know, and just, and you can give them two options. Like, I could do interest only at this, or I can do principle only payments with this and give this up.

And then by the way, tell the realtor, listen, um, you can, if you want to help me with structure this deal and help me with all the paperwork, you can actually represent me. Mr realtor and get both sides of the commission. I’ll let you double dip the commissions. Yeah, so now I’m in, this goes into what we’re going to talk about also is like giving the seller multiple options.

So I’m not even sending the realtor contract. I’m just saying this is maybe something that we could do and listen, if this the, go ahead and throw this email and delete it. Throw it away if you don’t like this, and if this is offensive, I’m like,

Mike: [00:18:45] well, yeah, realtors are easy to offend. And then of course, uh, you know, now they’re, they’re probably a little extra hungry right now.

Right. So I’ll be more willing to consider, and as our sellers, right, especially landlord, some of the folks you mentioned like that have properties have been on the market for awhile. Like people [00:19:00] are there, either

Joe: [00:19:02] have gotten

Mike: [00:19:02] a little wake up call or they’re about to probably so.

Joe: [00:19:05] Yeah, this is the best time right now.

When you’re making offers to make creative financing offers, if the seller says no to your cash offer, say, well, what if I could get you that price? Would you be willing to maybe carry back some financing or lease it to me for a couple of years and then sell it to me? What are you going to do, mr. Seller, if you can’t sell this property, are you going to rent it?

I always pull away. I say, you know, sounds to me like.  if this is not a listed property, I’ll tell this other sounds to me like you should probably just list it with a realtor. Like, if you really want that price, why don’t you just listen to it with the realtor? Um, so anyway, I, I just want to. It’s important to make offers, but also I think it’s equally important to understand creative financing and be able to give the seller multiple offers.

Mike: [00:19:52] Yeah, yeah, yeah. You’ve been the creative finance guy. Um, you know, there’s one of them, obviously, right? Uh, [00:20:00] that have been teaching this and showing other people, and you know, this is kind of coming into its prime now with the market share. And anytime there’s a market downshift, it’s like, what other. What other tools can you pull out of the toolbox to get deals done?

Right. And so, um, so let’s talk about, you know, some of the tools that you use that you teach. Obviously lease options is a big thing that you teach. Um, what, are there other things that you, that you do or teach show?

Joe: [00:20:23] Well, I love lease options, um, because I, I used to do a lot of subject twos and owner financing and the problem there is a place for it, and I’m not going to bad mouth it, but the problem for me was when the market shifted.

I was caught with a lot of debt. I owned the debt. Right, right. I own, I was responsible for it. Now with a lease option, you control property without owning it. Now there’s a place for subject twos and land contracts, contract for deeds, owner financing, but you own it and control it. And the time in my head back in Oh nine because I quit my job [00:21:00] in 2009 one year into the last recession, flipping lease options because I realized like, I don’t want to own, I had lost.

10 or 12 properties to foreclosures and short sales, and it’s just a disaster and my own. Um, so I thought, I don’t want to own another property again. And I had a lot of friends who were rehabbing houses and making it, even during the recession going down, they were still rehabbing properties and making 20, 30 grand, but it was still taking them three to six months to do that.

And I thought, I can just wholesale. I can flip properties during that same time and make just as much money as they do without the risk and the hassle and the headaches and the adult daycare, managing contractors and managing realtors and, and, uh,  and inspectors and picky buyers and all that. Right? So I would rather just.

Be in and out, make a quick nickel rather than a slow dime. Yup. So then I started thinking why I like lease options cause I don’t want to own anything. I don’t want to, I just want to [00:22:00] control it. I don’t want to own it because again, with with an option, you just have an option. You don’t, you don’t own it.

And it’s easier, in my opinion, to get out of an option if the deal gets goes bad. If the market goes bad, if it gets worse, it’s easier to get out of an option. And I also think it protects the seller a little more too. Um, the way I, at least I structured my deal. So anyway, I, uh, I started flipping lease options.

I’d get a property under an Elise option contract as a tenant buyer with the right to sublease it to someone else. And the right to assign it. So then I would find another tenant buyer that would take, would be willing to take my place, and I just sold my contract to that tenant buyer and I’m done and out of the deal, and I’d make a quick three to five grand assignment fee on these things.

I started doing a lot of those in 2009 when nobody was quitting their job. I quit mine because I was making more money flipping lease options part-time than it wasn’t my full time job. So I liked the idea of creative [00:23:00] financing, being able to offer sellers. Different option. Like if all you know right now is wholesaling or the only deals you can do is when you find a seller that has equity and motivation and you have a way to stand above all of the competition that’s competing for the few small leads, um, you’re going to be in trouble.

If that’s all, you know, if all you know how to do is make a cash offer for a significant discount, and if they don’t fall in that little boundary, you’re, you’re. Dude, you’re screwed. There’s nothing you can do. Yeah. You can literally go from, I’ll finish with this. Literally go from getting one out of 30 offers accepted to maybe three or four.

Right? If 30 offers accepted, right, you can offer the something else besides a cash offer.

Mike: [00:23:43] Yeah. The same funnel that I just shared here a minute ago. It’s like. It also looks like a phallic symbol. For those of you that are watching right now. This is a funnel. This is a funnel. My friends, you guys have dirty minds.

Joe: [00:23:54] It looks like it looks like this. The the game piece from the, uh,

Mike: [00:23:57] Oh yeah. Monopoly. It’s like upside down. Yeah.

[00:24:00] Joe: [00:24:00] Sorry. Right? Yeah.

Mike: [00:24:02] But that, that’s my, I’m not an artist, but that’s my funnel. So, uh, well, yeah, you’re right. If you have, that’s a cash or that’s, that’s a cash offer, right? If you’re going to wholesale or rehab.

Um, but if you have some other tools in there and you find ways effectively to monetize low equity deals or to monetize the deals where the seller maybe has equity, but they’re just not going to give it to you, right? And so it’s just, it’s a solution for what’s happening right now. Now, the cool thing is, is that, uh.

You know, there’s so many, um, people that are going to get it when this, we don’t know what’s happening with the market yet, but anytime there’s a downturn,

Joe: [00:24:37] there’s

Mike: [00:24:37] some number of people with very low equity that bought their house in the past, like couple of years. And you don’t have a ton of equity, especially if the market slips a little bit.

Yup. Or those that had rentals and they’re like, I don’t really want to be a landlord anymore, but I don’t want to give up all my equity to you. You know? Uh, they just, they’re open to creative deals. I think

Joe: [00:24:56] probably landlords more than anything there. There’s also a lot of

[00:25:00] Mike: [00:24:59] people, they kind of think of

Joe: [00:25:01] creative solutions a little more than a

Mike: [00:25:02] homeowner might.

Joe: [00:25:03] Oh yeah. Well, there’s a lot of investor rehabbers right now. That over rehab to house, you know, they were planning on selling it in six months and now it’s been eight or nine months. They were planning to spend 30 grand in the rehab and they spent 40 or 50 and now they’re like, crap, I can’t sell this thing to note is killing me.

They didn’t want to rent it out cause they just, it’s a beautiful home. They don’t want to rent it out. But now a lease option might be something that they can consider. Yup. And uh, and you could, I’ve done tons of deals with rehabbers. For what the price that they had, they needed to, and so they would really do a lease option and let me assign my lease option to a tenant buyer.

Mike: [00:25:47] Yup, yup. Yeah. So if you’re not doing creative deals right now, and that’s, that’s definitely a tool you should be putting in your tool belt as we go into this new market, even if it’s not as bad as we think it’s going to be, it’s a good, it’s a good tool to have. So

[00:26:00] Joe: [00:26:00] totally is good. So again, we don’t, we’re not saying like.

Every time you talk to a seller, present all three offers to them at once, but like make the cash offer. And if they say no or you know that’s not going to work, then say, well, what if I love the what if question? What if then so what if I could get you this price that you want? Would you be willing to well, carry back financing or do at least rented for a year or two and then sell it like.

Um, if, if I could give you what you want, it’s either price or terms, you know, I can give you the price you want. If you give me the terms I want. Yeah. Give you the terms you want. If you give me the price that I want. That’s how I present it to the seller. And I think a lot of sellers too

Mike: [00:26:45] are a, you know, they’re intrigued by if you say,

Joe: [00:26:48] well,

Mike: [00:26:50] yeah, they, they’re not going to take your cash off.

Or maybe like you said, you don’t even give it, cause you know, there’s like no way you might be able to even allude and say, you know what? Um, honestly, I think my [00:27:00] offer is going to be a lot lower than what you’d be willing to do

Joe: [00:27:02] to offend you. And you’re probably going

Mike: [00:27:03] to be, I don’t want to do that. If I’ve really enjoyed our conversation here.

I don’t want to upset our relationship here, but would you be open to like a. Creative solution, like something that’s kind of unique, just you might not be, but would you be interested in just hearing it and everybody’s like, well, yeah, I mean, every like 99.9% of people are like, sure, tell me more. Like it’s just like you’ve opened up this a loop, right?

It’s like, tell me more about that

Joe: [00:27:26] and the cha. Here’s the cool thing though. I look at it as a cool thing. The chances of them saying yes are pretty slim on that first phone call. Cause they just want to sell their house. They don’t want to lease it for a year or two or carry XL or financing. But you’ve planted the seed.

You give them time to cook. Follow up with them 30 days later, six months later, you know, whatever, and they’re like, they’re going to realize I wasn’t able to sell the house for, I wanted, I, I don’t want to be the landlord. And because you followed up with them and nobody else is, and then you’re going to get that deal.

[00:28:00] Mike: [00:27:59] Yep. Yep. Yeah. It’s interesting too, I think a B, because you said nobody’s following up. The truth is, is especially on low equity deals. 

Joe: [00:28:07] by

Mike: [00:28:08] default. Most people aren’t even marketing to them. They filter those people out, right? They’re just like, they’re not getting hammered. It’s not like if you had two houses, one of them bought it three years ago and they don’t, they don’t have much equity in the house.

And one of them, uh, has it paid off? Like, yeah, all else equal. The one that’s paid off is getting peppered with, with investor advertising. Right. And the other one’s not getting anything probably.

Joe: [00:28:31] You know what, if you instead did a direct mail campaign. Two people that bought their houses at least, but between a five to 10 years ago with FHA or VA financing, maybe three to seven years ago, they bought their house three to seven years ago with FHA or VA financing.

That’s a super easy list to get. Yeah. How much equity do they put? Do they have, not much. How much money did they put down in that house? Not much, but people move on average. [00:29:00] You know, used to be people move on average every three years. Now it’s like five to seven years, five years. You know, that’s a great list to start marketing to and to come up with these offers.

It’s not that complicated. Like when I, if somebody is willing to lease a property with the option to buy, I can give them any price they want as long as they’re willing to wait for it within reason. So if they’re willing to do at least purchase, I can say, I could get you that if you’re willing to lease it.

Um, what, and this is like asking this question, what if me or one of my buyers. It could lease the property from you, take care of them, regular maintenance and repairs and um, take care of the new vacancies. You won’t have to worry about vacancies and then bought the property and you have to pay any commissions.

What would you want to do then? What if me or one of my buyers could do this and I just spell out the quick benefits of a lease purchase. Yup. What would you want to do then? Or that wouldn’t be any of any interest to you? What, uh, and then see what they say. And make the offer. If it’s a, you know, like I only like to do lease options on nicer homes, [00:30:00] probably in the st Louis Midwest area, maybe a hundred grand or 300 grand.

I don’t want to be super expensive or really cheap. I don’t want to, I want to stay in that sweet spot. But if it’s a rental property that investors are looking to buy for cashflow, like under $100,000 to get the ROI, I love owner financing offers. I’ll just say, let’s say the rental, you know, you look at it and you say, all right, well, based on the rents.

You figure that the house is worth $75,000 well, I’ll give the seller $75,000 with zero down and principal only payments for 200 months. Why not?

Mike: [00:30:37] Yeah.

Joe: [00:30:38] Or lower the price a little bit. And give them interest, pay them 5% interest and put down 5%

Mike: [00:30:46] yeah. I have some rentals now that the owner seller finance to us, and that’s how the conversation has gone is like, I’ll give you one example specifically.

Uh, and these numbers are, this one’s been a little while, so the numbers are probably a little off, but. Well, our cash offer was [00:31:00] 45 and they wanted, you know, 65 and they’re like, it was just no way we could make it work. In the back of my mind, I was like, I have some rentals in this neighborhood. This is a, this is a perfect rental neighborhood.

It was close to my office at the time. And I said, you know what, if I could pay you $80,000 for the house, we’re like, well, that’s more than we even wanted for it. And I just explained how that work, you know, I’m going to pay you this much per month for this many months. And, uh, they were like. That was like some magical, I just, I literally just pulled out a magic wand and you know,

Joe: [00:31:31] for some reason people are stuck on their price.

Yeah. And, and they’re okay with waiting five, 10 years for that, but they’ve got to get that price. Right. Right. Let’s say they want more, this is the beautiful thing about creative financing. You know, you have so many different levers you can pull. If they want their price, then maybe you can negotiate the rent or the term or the interest rate, the payments, the, the, um, the down payment, like

So if they’re stuck on the, well, I gotta get 5% interest. Is that right? I can get you 5%, but then you just look [00:32:00] at, well, then you offer a little bit less on the price. Um, you do less down payment or whatever, so you can, it’s real simple. Just build some calculations in a spreadsheet. And give the seller two different options.

I can do this or this. It doesn’t matter to me. Pick which one, whatever one you want. Yeah. Yeah. Cool. So Joe, we talked

Mike: [00:32:18] about, so we’re talking about some things right now people can use in this market and really any market, but they’re kind of coming into light a little bit for right now. Uh. So we talked a little bit about following up or the just how important it is to follow up forever.

And we talked about crack some creative financing options. Let’s talk real fast for marketing to buyers. Now, for some of the stuff you do, it might be marketing to a lease option. Buyers, people that want to lease it and then maybe buy it. And then of course, when you have cash, uh, when you’re buying cash and you’re wholesaling, you know, to end in, not end users necessarily, but to basically to cash buyers, which, what I’ve been telling everybody right now, people that are in our mastermind and in my coaching programs and stuff is like, Hey, the, [00:33:00] the cash buyer list that you’ve been using up until now might not have the right people on it going in this market.

Right? You might need some new people right. So let’s talk a little about that. Share your thoughts on, uh, maybe let’s first start with kind of the cash

Joe: [00:33:12] buyer cause lease options. Those are always easy to find. Like, I don’t, I don’t really even build up my tenant buyer list. Yeah. You know,

Mike: [00:33:21] because he posted on like Facebook marketplace or something.

Joe: [00:33:24] Yeah. So it’s really easy to find buyers for creative finance, right. Uh, for, for cash buyers. You’re absolutely right. You don’t, we’re still wholesaling deals down in Mississippi, Alabama, and Georgia right now. And we’re just, we’re targeting the, um, the landlord buyers, the guys that are looking for cashflow, right?

They’re the best buyers. Yup. I found a couple of things. Number one, you got to get on the phone already and call all your existing buyers and find out where is, what’s their temperature right now? Um, are they still looking for deals? What are they looking for deals? If their criteria has gone down, in other words, [00:34:00] like they’re buying.

Price has gone down, that you need to know what that is, right? But first thing is call all your existing buyers. The second thing is, um, I’ve had a great conversation with Tom, uh, with, um, Sean Terry about this recently. Um, he’s, and we’re doing the same thing. We’re going into small markets. There’s a ton of opportunity right now in small towns all across the United States.

And, um, realtors are great source of buyers, right? So look to see who are the realtors that are selling properties right now to investors and who are the buyers agents? If you see a property that an investor bought, find out who the buyer’s agent is. Start calling these realtors and just say, listen, I’m an investor.

I’m looking for a realtor to help me sell my properties. Um, I think you just sold a property recently to, and this other buyer, are they still in the market? Are they still looking for deals? But especially in virtual markets, these realtors are going to be a great asset and even more important now than ever, [00:35:00] finding local realtors that are, understand who the buyers are and what they’re looking for,

Mike: [00:35:04] they’re more likely to know the market for sure.

Yeah. Not to, you know, in larger markets it’s just the market’s so big that might have a small farm area, or they might go do deals in deer parts town, but they don’t really know it. They just wound up there. They’d never been there before and they’d probably never gone back to that part of town.

Joe: [00:35:19] So don’t ignore the realtors, like a realtors are our friends.

So find the realtors. And then the other thing is, um, direct mail has always worked really well for me. But I do it different. I don’t target buyers that are already buying in my area. I like to see in the last few months, three months, six months, who are the investors that are buying in other hot markets right now from outside of those States?

Right? So if I can go in and I can see in, let’s just say Marion County, Indiana, which is Indianapolis, right? A lot of investor activity there. Well, I can pull a list of all of the investors that bought doesn’t, they’re not cash buyers. I mean, they may be cash buyers. They may not, I don’t [00:36:00] care. They’re just absentee owners.

Right. I don’t care if they’ve got it with a loan or cash, but they bought property in Indianapolis. In the last three months from outside of Indiana. And that’s a really easy list to pull. Right. Okay.

Mike: [00:36:14] That’s a big list to cause. Yes. Lots of outta, I mean, California investors, people that have that buy turnkeys or buy rentals.

Yeah. Like Indianapolis has been a hotbed for that, right?

Joe: [00:36:24] Sure. And there’s Memphis Shelby County in Tennessee right now. Jackson, Mississippi, um, uh, mobile, Alabama, Birmingham, Alabama. A lot of the Southern South Eastern States, you know, I’m still very homeowner,

Mike: [00:36:39] very affordable housing.

Joe: [00:36:41] Yeah. You can see who those buyers are.

But here’s the point. I’m, I’m, I’m looking for the buyer from California, from Oregon, from Seattle, from New York, who’s buying in these other markets in the last three months. I send them a simple letter that just says, Hey, I see that you are an investor, that you’re buying some [00:37:00] properties here. Um, I want to just let you know about.

St Louis or Kansas city. Um, we are the premier real estate investing company in this market and we’ve got a lot of really good deals here. If you want to talk, I’d love to talk to you and then you put your phone number in the, don’t send them to a website, send them to, and I would recommend putting your cell phone in that, in that letter, right?

That is a phone number that you want to have a special ringer that comes when they call you. And you’ll do so many deals if you just answer your phones, especially with your buyers. Now I might recommend, you know, in in freedom soft or, or  you can get a virtual number, but that should reroute and redirect to your cell phone.

Yup. And then you have a special ring when those buyers call, if you want to do a lot of business and make a lot of money. We heard this over and over and over and over again from our buyers. You are the only guys who answer their phone. Yeah.

Mike: [00:37:52] If

Joe: [00:37:52] you want me to do, I just gave you the million dollar secret right there.

Just answer the stinkin phone and you’ll find [00:38:00] these guys are like, you’ve answered that. This is why we do business with you, Joe. You answer your phone, we know we can call you now. So then they call me and I don’t like doing turnkey in the traditional sense of the word, right? What I like to do is, um, I like to give them, all right, here’s some deals.

Here are three property managers that you should contact the pieces. There are three lenders. Here’s three insurance companies. Here’s three property management companies. So I give them my referrals. But I leave it up to them. Right. And I don’t manage the rehab, but I, you know, I just find out what, you know, what they’re looking for.

Mike: [00:38:35] But the pieces, at the end of the day, a turnkey, we’ve seen it. Turnkey has evolved from truly turnkey. We do everything for you. We manage it. Yeah. That’s the dirty little secret is every. Turnkey operator that I’ve ever known or every investor that I’ve ever known, like none of them really want to be a property manager and they’re not very good at it, right?

And so I was like, okay, why am I putting myself out there doing this? And that’s not even my strength. [00:39:00] Like let’s find the right people in the market to do this, right? So,

Joe: [00:39:03] yup. Here’s the cool thing. Once you learned

Mike: [00:39:05] passing along value too, right? You’re like,

Joe: [00:39:06] you can get a better

Mike: [00:39:07] deal if you put these pieces again, I’m going to give you all the pieces, assemble it yourself.

Like Ikea.

Joe: [00:39:12] And I’ll be, but I’ll be your boots on the ground guy that answers the phone when nobody else is answering the phone. I’ll answer it, right? But here’s the cool thing. Now that you’ve got these buyers and you know they have money, you can start spreading the word around. In your market. I’ve got $1 million burning a hole in my pocket right now.

Bring me your deals, bring me your deals, and you’ll start getting other people to bring you their deals because you have such good buyers. So you should never stop marketing for buyers. But especially now as the market is shifting, it’s going to be become more important than ever. To have good buyers.

You should double down on your marketing for buyers. Always, always be marketing for buyers. Yeah.

Mike: [00:39:51] There’s so many people over the last few years, you know, they’re like built up huge buyers list, but it’s full of the people that just said, Hey, I’m building my buyers list. Drop your [00:40:00] email below, and yeah.

Every newbie and want to be not thinking they, that we were all newbies at one point. I mean, I get it, but they’re not real buyers and so you, you might have a big list, but there’s not a lot of substance behind it. So find those people that are, that are still buying or that are going to continue buying.

Yeah, for sure. Awesome. Joe, wonderful stuff, my friend. Thanks for sharing today.

Joe: [00:40:19] Yeah. My pleasure.

Mike: [00:40:20] Yeah. Yeah. Hey, if folks want to you, I know you, obviously you’ve got a, you, we talked the other day on your show. You, you inspired me when I started my podcast six and a half years ago. You were one of you and Sean Terry and a couple of others where people with podcasts out there.

So you’ve been doing a podcast even longer than this show’s been on. Um,

Joe: [00:40:38] and what’s that? Don’t you forget it. Yeah.

Mike: [00:40:43] Yeah. That’s why you start calling you granddaddy. But Hey, um,

Joe: [00:40:49] share a little

Mike: [00:40:49] bit about how folks can get ahold of you. You put a lot of great information out, a lot of great content. Where do they go to learn more about you and, and some of the creative things we talked about today?

Joe: [00:40:58] Well, my podcast is called real estate [00:41:00] investing mastery, real estate investing mastery. So just go look at it up in Apple podcasts or Spotify or wherever, and subscribe. I do three episodes a week. Not as many as you. That’s a lot. Three a week. Yeah.

Mike: [00:41:14] I don’t do that many anymore.

Joe: [00:41:15] Well, you used to do them every day, didn’t you?

I, yeah,

Mike: [00:41:18] we’ve, yeah.

Joe: [00:41:19] I’m a recovering, have more episodes than I do.

Mike: [00:41:23] I’ve done all sorts of stuff over time, but not a, I’m not doing, I do still have two shows, you know, so listen to the investor fuel show. I do a, an episode a week.

Joe: [00:41:32] Okay. I say that,

Mike: [00:41:33] and I’m actually recording two more shows. I actually am recording five this week, but you know how it goes.

Some weeks I didn’t record anything. Some weeks I record three or four, but yes, go ahead. Sorry.

Joe: [00:41:42] Well, anyway, my podcast, real estate investing mastery, I love doing it, man. I, I, um. I love doing podcasts. I love teaching and interviewing people like you, Mike on the show, and it’s just a great way to get out. I networked.

I talked to a guy today that, um, it’s got a huge [00:42:00] operation, a huge lending operation in Idaho lens on deals on all over the country. I’m not talking. Commercial. I’m not talking like bank or hard money, like he’s a private lender. And, um, so I had a great interview with him today and, um, so I love doing the podcast.

I love, yeah, teaching and helping people do deals. I also got a book, if you don’t mind me plugging real quick. This is called the wholesaling lease options. I wrote this a year or two ago and it’s perfect right now for this market because this is a strategy that I used when I quit my job in 2009. A year until the last recession, and I see this coming back in a big, big, big way.

And it’s called wholesaling lease options. Discover one of the fastest and easiest ways to make money in real estate today. And I just teach you how to flip lease options in this book. You can get it for free. Um, if you want the [email protected], w L O book.com, if you want the audio book, you can get the audio book for dollar 99 at w L O audio.

Dot [00:43:00] com w L O audio.com .

Mike: [00:43:04] Okay. I’ll write those links down in the show notes here. If anybody, uh, if you’re driving right now or you’re not able to, uh, we’re able to write that down, we’ll put it in the show notes for the show as well. So, cool. Good stuff, Joe. Great to see you.

Joe: [00:43:16] You too, Mike. Thank you, man.

Mike: [00:43:18] Yeah, and everybody, thanks for joining us today. Hope you’re getting some value. Uh, out of the show here, we’ve been doing this, like I said, for six, six and a half years now for this show and cranking out content. Guys like Joe and I do this because honestly, we love just getting together with old friends.

I interviewing people that we haven’t had on for awhile or interviewing new people that have some great value to add. So I hope you’ve gotten some value. If you haven’t yet subscribed to the FlipNerd podcasts, I’d love it. If you do, you can find us anywhere you’re listening or watching this right now.

ITunes, Stitcher, Google, play, YouTube, of course, flipnerd.com you can access all of our shows. I’d love it if you subscribed and give us a positive review. If you got some value out of it until the next episode, have a great week. We’ll see you next time. Thanks for listening to today’s show. There are three [00:44:00] ways I can help you start or grow your real estate investing business.

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