Many assume that leverage in your real estate business only refers to ‘financial leverage’. As Jordan Fisher explains, there are leverage points that you need to own in every part of your business. Check out this Flip Tip to learn more.
Mike: Hey, it’s Mike Hambright from FlipNerd.com, and we have a quick VIP tip to share with you from Jordan Fisher who’s going to share a tip on how to create leverage out of thin air in your next real estate deal.
Jordan: Hi, this is Jordan Fisher of Inspire Capital. Nice to meet you. I want to help you create leverage out of thin air.
I just see too many real estate investors leaving money on the table when they’re buying properties or leaving money on the table and paying too much interest in opportunity costs when they’re selling properties because they don’t have leverage in a transaction.
They have hope by calling the transaction. They let hope into their real estate business. They hope it sells for a certain price. They hope the inspector doesn’t find things wrong with the house. They hope someone’s loan’s closing who buys the property. And I think the way to get around this, to remove hope from your real estate business is to put leverage into play.
And I think the way to think about that is whatever you do, I don’t care if you’re buying a property or selling a property, I mean… if you broke it down into a task, what happens when you buy a property and you sell a property, and all these little tasks, so it’s probably a hundred different things. I know you think there’s four, but honestly, if you wrote them down, there’s a hundred different things you do, from if you’re selling your property, it would be from listing the property, taking calls, the price you put it at, when you have the open house, if you let people see it at their leisure, how you counter an offer, all these things…
You just have to think about how do I put leverage into play? How do I take control in every step of that transaction? Rather than just list it at a price that I think is right, how do I list it at a price that I think will create leverage in the market to come to me so I have their full attention?
How do, when I allow, when I put a time for people to go see the property, like I’m going to show it at an open house, how do I not just say Saturday, 2:00 to 4:00, and every Saturday for the next month, or a certain time? How do I create a time or create interest and create a buzz, create leverage so everyone sees themselves there, everyone sees all the people there at the same time and it’s a feeding frenzy? How do I create havoc? I like to say it… real estate agents hate it. How do I create havoc on the other side of the transaction so everyone in the world is uncomfortable but it’s not personal? They’re not upset at me. I just put leverage into play and they’re upset.
So when someone says, “Well, Jordan, what’s it going to take for my buyer to get this property? Come on. If you just tell me the number, just tell me the number,” and I say instead of me giving in and saying, “Hey, I think your buyer should just make the best offer you can,” or “I think it’s this number,” how do I put leverage in that?
So that would be examples of, like, you know what? If I just say, “Look, it’s priced ridiculously low. You can see my phone’s been blowing up. You can see how many people were at the open house. You can imagine the offers we’re getting. I would just do whatever your buyer’s comfortable with and go from there.” And that way I didn’t make a personal statement. I just said this market is this big beast and I’m just kind of like controlling it and you see what I see. So I’m just making you aware of, really, the circumstances in the market, what’s happening, for you to do what’s best for you. And that way I’m putting leverage in every step without being personal. And I’ll tell you, when you do that, you’ll have so much more fun in your real estate business.
Mike: Thank you for joining us for another Flip Nerd VIP tip.
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Mike: Please note the views and opinions expressed by the individuals in this program do not necessarily reflect those of FlipNerd.com or any of its partners, advertisers or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.