What do I mean by overcoming real estate fears?
Calling home sellers can be a scary idea--or it can be a lot of fun.
I have a question for you...
When you have got a prospective seller's phone number and you're picking up the phone to call and "test the waters" for a first contact or to present a verbal offer, does it sometimes bother you?
Do you get freaked out?
Do you start thinking about exactly what you're going to say, how you're going to say it, how to deal with any and every possible contingency, how to "convince" or "sell" the seller on doing a creative real estate deal with you... etc.?
Do you ever get NERVOUS when you're dialing the phone?
You know that feeling when you just start getting anxious for no logical reason, and you just CAN'T control it?
Have you ever had to actually HANG UP because you were so darn freaked out... and you just couldn't follow through with it?
OK, now another set of interesting questions...
Have you ever called a seller back after a first chat/offer, and started talking to the person, only to realize that he/she was in a COMPLETELY different mood from the last time?
Have you ever had a seller "turn cold" on you all of a sudden and be "not interested" in your creative real estate offer?
It's almost like you're talking to a different person from the person you built rapport with-- hopefully ;)-- and it makes no sense to you... right?
And finally...
Despite some weird feelings, have you ever worked up the nerve to call a difficult prospective seller, gotten the seller on the phone, had a great conversation full of all kinds of possibilities...but when it came time to get some agreement over something hammered out, you froze up because you didn't know what to say?
Or even worse, have you ever gotten to the end of a conversation on the phone or at the house, after a long time investment of exploring the seller's needs and the house itself... only to have him/her answer with:
"Well, maybe... call me Friday afternoon... OK?"
or...
"That really doesn't sound like what I want to do,
but thanks for asking... (silence)"...?
Have you ever had one of those conversations where you could just TELL that something wasn't right... and that, even though the SELLER had a problem you were offering to help SOLVE, he/she wasn't going to be taking you up on your creative real estate offer, or calling you back at all anytime soon?
Me too.
So why all the problems?
What is it about these particular few minutes just getting the information and finding out the motivation of the seller that constantly ends in problems for beginning real estate investors?
I mean, you are calling someone who wants to sell their house about SELLING their house! Hello, where does all this anxiety come from?
I personally think that this issue comes down to a few key DEEPER ISSUES.
And I think that if you don't have these other issues "handled", you're going to keep running into problems... and NEVER even know WHY...
...which sucks.
I mean, it's bad enough to keep having a particular problem and not figure out how to solve it... but the idea that the solution is in doing something you would never think of is a little bit maddening.
In other words, I think that this is all about understanding the problem, and actually PREVENTING it from coming up... rather than trying to "solve
it" in the moment.
Let me put it this way...
If you're dialing the phone, and you're starting to feel nervous, then it's already too late to solve the problem.
No quick fix will help you.
Or if you're on the phone with him/her and you have just fired across the bow with something like, "Well, Susie...I understand all that you're saying, but if I were to pay cash and close quickly what is your bottom line to sell this house?"
OR
"Well, Susie, now that you understand what an Option Agreement is and we've established that you no longer want to be a landlord but ALSO want to get full retail value selling your house, and want to do it yesterday with no headaches and no real estate commissions...I think I can help-- do you now feel ready to make a deal with me?
and she says "Um, well Mr. Investor, I do need to sell the house BUT...X,Y,Z...let me call you back in a few days/weeks/next Christmas and tell you my answer then"...
And you start to get that sinking feeling that what should be a GREAT deal because you KNOW you can help her out and get this thing done, is dead in the WATER because you know she's blowing you off.
You confused the seller or worse you sounded so "slick" she was ready to run for the hills.
At this point IT'S TOO LATE.
There's no "magic pill" now.
The answer is PREVENTION.
Let's get this handled.
So, let's take a few minutes and talk about the issues and what CAUSES them.
Here are some of the "root causes", and how I see them...
1) Having no other options.
If you're sitting at the phone with ONE seller's phone number in your hand, and you haven't ever bought an investment home (or it's been a long time; or you really are trying to buy quickly so you can gain momentum and go full-time into the "real estate investor lifestyle"), and you are feeling DESPERATE, you're probably going to get VERY nervous.
When you have no other options, the solitary one in front of you becomes VERY valuable.
Translation: You want it TOO badly.
This AUTOMATICALLY triggers your emotional system, because at some level you realize that if you screw this up, it's all over. And we both know that there truly are TONS of ways to KILL a real estate deal-- even IF you truly CAN structure a win-win agreement with the seller.
The pressure is too much! Without options, your judgment could become clouded and your neediness communicated to the seller will turn them off.
In this world, the hungry fish does not get fed. Such is true in real estate investing as well.
2) Putting too much importance on a single deal.
Now, if you have a deal that you've been working for three months, and you've decided that it's one heckuva rare find with a GREAT spread, a motivated seller and a CLEAR exit strategy, really a one in a
thousand scenario, it makes sense to put a lot of importance on your completion of this deal.
After all, you've invested a LOT of your time and sure there might have been obstacles but now you are running with the ball and you can see blue sky and five-figure checks.
But, if you don't have other things going on, other deals in the works, other proverbial "irons" getting hot then you are only setting yourself up for major disappointment by putting too much importance on ANY one deal.
3) Thinking you need to IMPRESS the seller.
This is a HUGE issue.
If you're like many investors, you might "subconsciously" behave and communicate like you're trying to IMPRESS the seller of a house you're considering buying.
With me, when you think about this, it only makes sense... of course you'd want to impress the seller in a "creative real estate" deal that has everything
going for it... so he/she'll think you're a professional, can do what you say you can do and want to work with you.
But have you ever thought for a moment how a desperate, motivated seller sees it when an investor is TRYING to IMPRESS him/her?
Well, here's the INSTANT and SUBCONSCIOUS response that sellers often have:
"He's trying too hard. There's something wrong.
This guy must have something he's trying to
hide...better keep my mouth shut."
In other words, the INSTANT you do something or say something that is an obvious attempt at impressing a seller, his/her radar system screams:
"Con man!"
Can you blame them? With the world we live in today? When doing creative real estate deals, when you KNOW you can help the seller, it is 100% more effective in the long run to use a strategy of EDUCATING people and not trying to "sell" them.
Remember, as a real estate investor, people often want to do what you do for a living. It seems glamorous and fun and highly lucrative, all of which it can be. But in the real world most of what works to build wealth in real estate is JUST PLAIN NOT UNDERSTOOD by "average Joe" Johnny LunchBucket types. This is where you must EDUCATE your sellers and you can only do that by actually caring about them, building trust and comfort and not coming off as a smooth-talking con man.
4) Being attached to your expectations of a deal.
You might think of this one as a variation of "wanting it too much"... only slightly different.
When you start getting your hopes and expectations up, you begin to get ATTACHED to them.
Then you run the risk of HOLDING ON TOO TIGHT to your little "get rich quick" fantasy.
Bad idea.
Of course, you should run your numbers and do your due diligence and throw some projections around to see what you could be making if a deal goes through.
Nothing wrong with that. In fact, it's essential! Many a new investor has jumped straight into "investing" by buying a property in a stupid deal and ended up a glorified housebuyer with a house that they come out of pocket every month to own.
Except in some instances, this is just not sound investing!
Remember, as professional real estate investors:
We buy properties that PAY us to own them!
Back to the being attached to the deal thing.
I want to elaborate on this concept because it is SO important in SO MANY WAYS for those of us who want to enjoy success in real estate investing and be Good Stewards.
Of course, when dealing with a seller or any kind of deal issue you want to be PERSISTENT. Persistence is a key to success in ANYTHING. But you don't want to be ANNOYING!
Sellers don't don't often want to work with investors who come across as arrogant, are obviously only motivated by a lust for dollars, who assume too much, act too comfortable with them, or blow smoke up their chimney.
Remember, motivated sellers have investors often literally pounding down their door (well, once their reason for motivation is in the public forum anyway). They are getting daily calls and letters from people who, in effect are saying "I want to steal your house!"
In fact, with few options they almost EXPECT to get a short-handed stick at closing but what can they do... they gotta sell, right?
I mean, they're "motivated" sellers right?
It says right there in BLACK and WHITE that Johnny's mortgage is in arrears and Johnny told you right out of his mouth that he just got laid off at
the factory and you KNOW none of Johnny's friends/relatives/boss can or will bail him out. His inability to pay the mortgage is temporary until he finds work but he just can't catch up the rears.
Logically, you know that he can't refinance either. Plus he actually TOLD you all his troubles trying to refinance and how the banks are ignoring him in his time of need.
Logically...you KNOW he HAS to sell-- doesn't he?
Logically, yes it makes sense to do whatever it takes to avoid foreclosure and avoid a potential bankruptcy.
Logically, you KNOW these things.
But REMEMBER three things, please, dear investor.
1) You have SPECIALIZED KNOWLEDGE:
Chances are, what makes sense to you as a seasoned -- or even just well-read ;)-- real estate investor, might be highly CONFUSING to others who are
not real estate insiders. Examples? Try the Lease-Option Purchase or Seller Financing or Taking over Payments or any one of a hundred other techniques investors know and use but most people have no idea about.
Hint: Like, for instance the SELLER you're trying to help.
2) This is not a LOGICAL situation:
Oftentimes when talking to a motivated seller it is an EMOTIONAL situation. Even if the person is just a FSBO this is often their home, a place of all kinds of emotional references and attachments.
Regardless of how LOGICAL it is for a distressed seller to take you up on your win-win creative real estate offer, they are not likely to deal with a person they DO NOT LIKE, they CAN NOT TRUST and who does not make them FEEL GOOD.
Period.
But, you keep thinking...they gotta sell, right?
Maybe, maybe not.
One thing's for sure--they don't HAVE to sell to YOU!
In fact, here's number three to keep in mind...
3) They don't HAVE to do ANYTHING:
Believe it. I've seen people FORECLOSED on because no one who came to "help" them took the TIME to explain what their options were and clearly articulated what each party's responsibilities and rewards would be for selling the house by using creative real estate strategies.
They were determined to hope and pray for a miracle because they could feel the sharks circling out there waiting for the feeding frenzy--all those so-called "investors" who low-ball offered to buy their house and insulted them and told them to, basically, "take it or leave it dummy."
These people lose their house and their equity because no one was there to give them a hand and treat them like a human being. No one was there to point to the pile of unopened mail and bills on the kitchen table and, with love, say:
"I can see you're in a tough spot,
but honestly folks ignoring the problems
like an ostrich with your head stuck in
the sand isn't going to save your house
or your credit. It's time for you now to
do something about it. I'm here to help!"
Just like appearing desperate can destroy your chances of structuring a creative deal with a seller, liking a deal's profit potential too much and creating an expectation leads to crazy, stupid mistakes as well.
Like forgetting the #1 Rule of building wealth through good stewardship:
"Wealth is the accumulation of problems
solved and people helped."
Now, think over what I just said...
