20 Years Wholesale Experience Explained In 75 Minutes | Flipping Mastery

(upbeat music) - Hey, it's Jerry Norton. Welcome to the Whole Still Hotline podcast and the Flippie Mastery Breakout. We wanna know how we're doing, so please leave a comment and give us a rating. - Can we give it up for the one and only, Mr. Jerry Norton? (upbeat music) - Thank you. What I wanna share with you now over the next hour is gonna be very much on the technical side, which I love. I love really breaking down and getting to the steps and the processes of how we do things. So this is really my element. I love the high level mindset stuff, that's great too, but where I feel like I can really bring something to you is to take one component or one aspect of what we do and really deep dive it and really give you some value. So, sound good? I'm gonna be talking about what I think is one of the most important skills you can acquire as a real estate investor. And that is the ability to close deals. Negotiate and close deals. Now, that skill is not mandatory. You do not have to learn how to negotiate and close deals and you can be a highly successful real estate investor. Somebody else can do all of that and you can just get into the deals. You could be on the finance side. You could be buying those deals from somebody else who negotiated and closed that deal. So it does not have to be what you learn to get good at, but having said that, this skill transfers over into every area of your life. It transfers over into everything. And I'm gonna show you this framework, I like to call it, of how to negotiate and close deals. I mean, I use this to convince my wife to have sex with me. I mean, like, you use it everywhere. It's great. But I wanna break this down. And when it comes to sales or I'm not gonna use it, 'cause that's pretty broad, I'm gonna use it as negotiating close or just close deals. This framework or that ability to do that, that skill set to do that is very much an art and a science. And so what I'm gonna do is I'm gonna try to show you both. I'm gonna show you the science, meaning how and also why. The why part of it is the art of it. It's understanding why are we following this process? Why is this step before that step? What is it that I'm trying to accomplish by doing insane these certain things or following this certain order, fair enough? But honestly, it's the art of this that is the most, it's the hardest thing to learn 'cause it's the nuance of it. But it's also, and it's hard because it takes time and practice to get good at it. But first, if you don't have the right framework, if you don't have a sales process, we call this, then you're just floundering. You're out there talking to sellers and you're trying to put deals together and there's no real congruency to what you're doing. Whereas when you have a framework, what does that allow you to do? Consistency, predictability, yeah, you've got guardrails up, you know where you're going, you know what you're doing. It allows you to overcome objections more effectively. It just allows you to do the whole thing so much better. So let's get into this. I've broken this down after talking to over 10,000 sellers in 21 years of doing this. These are what I would call the eight steps to do this. So I'm gonna actually show the steps. I'm gonna give you the exact language that I use. Now you're gonna need to what, with this script, let's call it, what are you gonna need to do? Adopted into your own, right? But it'll give you a really good baseline, I hope. You can copy it verbatim, but you've got to make it at least, you know, in your own way. Because here's the thing, guys. Closing deals is about asking the right questions at the right time and with the right tonality. That's sales, that's closing. Right questions, right time, and right tonality. So let's go through these eight steps. And then I'm gonna hopefully have some time at the end to answer questions. We have to end it at 12, right? Okay. All right, so step one, right out of the gate, and where I'm gonna take this guys is I'm gonna start from the initial conversation with a seller, and this is mostly with residential real estate, but I think very much this transfer's over into commercial real estate. So you guys that are doing, you know, RV parks or whatever, this transfer's over, but it's very, very specific to direct the seller, residential property, and from the initial conversation that I have with a seller. Now I'm gonna assume that there's been a pre-qualification, and the only pre-qualification I want you to assume is the seller said they're interested in selling. That's it, okay? So assume that the seller said I'm interested in an offer, and that's where this is picking up. You with me? I'm beautiful. Okay, so the very first thing I wanna do is I wanna get the seller to give me their initial ask price. Now why? No where to start, why else? Find out if they're serious. Those are all great ideas. Okay, there's an old proverb that says he who names the price first loses. Very much true, but why? We're gonna get to that, so he said motivation or pain. That's not why. We're gonna get to that though, that's one of the steps. Pardon? That's a ceiling, that's true. Here's power from being the price. Okay, you're in the right direction now. Okay, this is a psychological move. Okay, because right out of the gate, I need to set myself up in the conversation as the authority figure. I need to be in charge of this call. I need to lead the conversation. I need them to know that I am the person of authority in this conversation. And when you ask the seller what price do you want for this property, you are positioning yourself now. It changes the entire dynamic of the conversation. I don't care what they say when I ask them this question. It does not matter what they say. This is a power move. This is a chest move right now. And you have to get the seller to name their price first. It puts you in the right position in the conversation. It sets up the sale to happen in your favor. - Aren't you also saying that you're giving them the power of my saying that though? - No, because here's why. When you lead out and you say to somebody, what price do you want for your property? They are now responding to you asking them a question. And you're setting the tone. I ask the questions, you give me the answers. I'm in charge here, not you. You're chasing me, I'm not chasing you. I'm the buyer. I hold all the power. I don't know if I'm gonna buy your stupid property. It's a piece of crap. You convince me why I should buy your house. That's the, the message is you sell me on why I should buy your house. The other way where everyone messes this up is you come across desperate. I need this deal so badly. How do I force a deal? That's not the message we want to have in the sale process. See the difference? Okay, so here's what this looks like. Mr. Seller, I'm excited to see if we can help you out with your property. Before we take a look, tell me what price are you hoping to get. Now I haven't looked at the deal, I haven't. Have I done any underwriting? Zero underwriting. I don't even know where this is, what it looks like. I don't know if it's a three-bedroom, two-bath. I know nothing and I don't care at all. All I care about is what price do you want? Let's take a look, okay? So step number one, get the seller named the price first. Which by the way, going back to that, what percentage of sellers will give you their price? Literally right out of the gate in the first 30 seconds. It's not 90, I wish it was that high. About 70, yeah, about seven out of 10 times, they're going to give you the price. What are they going to do the other three out of 10 times? You tell me. You tell me, what price are you willing to offer? Okay, because they also know that old proverb, he who names the price first loses. Right, now what do we do when that happens? How do we overcome that objection? >> We can make a joke and make a reason like concretely low on it. >> Well, we're not going to make our offer yet, but I like where you're going, okay? >> It doesn't just like that, that type of thing. >> Say that again. >> Change the subject. >> Change the subject, yeah, I'll often go. So I'll make a couple of attempts, and then if they still won't give it to me, I'll leave it alone, I'll move on, and I'll come back to it. But I am getting them the name the price first, no matter what, okay? So I might say something like, if they say, well, you name the price first, I'll say, or if they say, well, what price would you give me? I'll say, well, I have no idea, I haven't even looked at it yet. But surely, Mr. Seller, you have a price in mind, and I'll tell you what, we can take a look right now, and we can go down that rabbit hole, if you'd like. But we might end up wasting a whole lot of time, Because if you're way off from where I'm going to end up. need to be we could say both of us a lot of trouble and just you know and the call right now surely you have a price in mind and does every seller have a price in mind of course they have a price in mind yeah they're just they just don't they're just a little afraid to reveal it just yet you know they're feeling a little worried about that but again that's only three out of ten times if I follow up with that question and they say well I don't want to name the price you know they give you other reasons I'll say okay well let's take a look at what's going on and and then we'll look at stuff I'll ask a couple more questions and then I'll go you know I'm sure that you got an idea of what you'd like to get for this and I go back to it see what I mean okay so step number two is now I need to do what I call discovery now I need to uncover motivation I have to understand what's going on now the discovery process the discovery process a lot of people overcomplicate this they make it this long drawn out process you know this doesn't have to be this deep dive analysis of what the heck's going on I've noted down to just four questions for me to do discovery here's what it looks like question number one is this tell me a little bit about what's going on what has you wanting to sell right now now what am I hoping they're gonna reveal pain exactly I inherited this property and don't want it I moved out of state and now it's vacant I'm trying to retire and I don't want to be a landlord anymore that it's going to foreclosure in a week whatever the issue is I'm hoping they'll tell me something revealing about pain going on now what if they say something like well I'm just price shopping to see what people will pay and I'll say well I'm not an appraiser I'm a buyer you know if you want to know your value then you know go look at Zillow or hire an appraiser okay so tell me a little bit what's going on question number two oh this is another way to ask the same question I love this question this this is trying to get to the same objective is I'll say I'm curious why haven't you listed this property with a real estate agent I mean you said you want to sell why not list it with an agent now why is this question revealing it's not that they don't have an agent all retail sellers list with agents don't they why why does a retail seller not a distressed seller a retail seller why do they list with agents still paying for property data prop wire gives you unlimited property data cops and more for free download the prop wire app on the app store or Google Play Store today because you're going to get the market value for your property you're going to get the highest price the market will pay you'll pay commissions but you'll get the highest price the market will pay with a real estate agent so the fact that they're talking to an investor and not a real estate agent tells us there's something else going on why they don't want an agent yeah so it's a very revealing question that is a non-threatening way to get to the bottom of things that makes sense okay next question is assuming we agree on an acceptable offer now why do I say assuming we get to an acceptable offer this is a positioning move this is a power move we're going to get to that it's that's along the lines I don't know if I'm going to buy your property you sell you tell me why I'm going to buy your property it's putting you in a position of authority yep you're not desperate here are you like not buying a crappy deal you're gonna buy a good deal so it's that message that we're sending assuming we agree on an acceptable offer how sooner you're hoping to close and get cash in your pocket now when I talk to distressed sellers I love to talk about net net net I love to talk about the cash you will get in your pocket after everything else after you pay off the bank loan cash in your pocket how sooner you looking to get cash in your pocket now that's urgency that's an urgency question isn't it how urgent is this if they say well when my son graduates high school and he's 12 right now you know not very urgent that tells us a lot about what's going on this is the story behind how we're gonna set up our clothes okay number three tell me a little about the condition have there been any updates done in the last five years now condition is the kiss of death in my opinion in closing deals meaning this is abused more than any other thing in the sales process people go down this condition rabbit hole and they say well how old is the roof how old is the furnace and and you have a half an hour long conversation around the condition I could care less about the condition why because I'm already factoring in that it's gonna need work done I don't care what they say they're lying to you that it's all fixed up and brand new and move in writing all that it's not it's always needs a rehab even if it's livable a flipper is gonna come in there and rip out that 1980 kitchen and put a new one in right yeah so we don't need to know all of that this is this is more of a conversational thing it's given me sort of a high level and by the way I haven't even seen this property yet and if I'm on appointment I'm there so I can get my head around that if I'm on the phone closing then I'm gonna have a contingency my contract anyway that's gonna allow us to do a walkthrough and find out exactly what needs done so at this point in time do I really need to know all the details about condition no I need a very basic understanding that's it so don't screw this up and spend forever talking about condition okay fourth question in order to make a decision about selling your property is there anyone else that you need to get on board like a spouse okay now why do I ask this question I want all the decision-makers in the room right now and if they say well yeah I would have to talk with my spouse about whatever case your spouse there let's get them on the phone right now so we can have a conversation with them too okay or the errors or whoever is part of that okay that's it these are my four discovery questions nothing more nothing less this is gonna tell me enough about what's going on okay step number three what happened oh you're writing this down got does everybody want this the exact framework I'll give it you for free I'll give it you for free yeah totally all the steps all the scripts yeah yeah you don't have to write it down just step number three get the seller to commit to sell this is the pre-close we call this so I think about it like this imagine right now that you're filling out the purchase and sale agreement and everything we're doing is just filling out the terms of the agreement and the last thing I'm going to put in the contract is the price but I'm assuming right now that we're that they're selling their property to me that's the energy that's the vibe I'm having and I'm showing up that every single one of these conversations I'm closing the deal now what happens if you bring that type of confidence and mindset to every conversation you're having are you gonna close more deals you better believe it so I want the seller to commit the sell it to me before we've even talked about price and here's what this looks like I'm not saying I can what is that doing again authority I'm not saying I can but if I could get you an acceptable offer would you be opposed to putting together an agreement today now notice how the question is framed what is the correct answer no no they're not opposed which means yes they will put together an acceptable agreement now why is it in sales where we want we want to get the seller to say no which means yes what cycle yes psychologically the there's a wall that says whatever this guy says say no right that's that's the psychological defense mechanism when people are in a sales process so I like to frame questions where no means yes notice a couple other things here I want to give you guys a couple of vernacular terms that will change everything for you I never say sign a contract why sign and contract mean to a seller I need a lawyer to look this over it means legally binding and I better have a lawyer review this approve an agreement how does that feel so I say approve an agreement now after they approve the agreement now they signed a contract that's legally binding you know what I mean like yeah I'm just kidding but before then it's approving an agreement so you'll hear me say that approve an agreement I don't use the word contract I use agreement I don't use the word sign I use the word approve okay do words matter words matter okay so I'm not saying I can but if I could get you an acceptable offer would you be opposed to putting together an agreement today now when they say yes they've just pre-committed to sell their house guys follow me okay step number four I go back to price now again I'm assuming they already gave me an initial ask price but I'm going back to price but this time what am I doing I'm reframing the question showing the benefits and the solutions I'm solving. So it'll look like this. If I could get you an offer that was as is, so you don't have to make any repairs for all cash, so no appraisals are financing, with no commissions or any cost to you, and if I could close on your timeline, what would you be willing to take for an offer like that? Now how powerful is this? And guess what? All the fill in the blanks there is what you uncovered during the discovery questions. So whatever you found out is important to them is what you put in here. But these are the basics as is all cash, no cost, and close on your timeline. Those are generally speaking, those are the most important things to a motivated seller. Okay, now again, what I'm trying to do right now is get them off of the pie in the sky number. And by the way, what number do most people lead out with in that very first question? What number do they lead out with? Zillow. Yeah, of course they do. What would you do? I'd be thinking maybe this guy's an idiot. I'm going to give him the full retail Zillow number and see what he says. That's what I would do if I was the seller and somebody asked me that question. Okay, so what do you think they're going to do? They're going to do the same thing. Now here's what a lot of people do. They make this, they make the massive mistake of assuming that the seller's initial ask price is their bottom line. Not true. In fact, never assume that's true. Oh, they're not motivated. They want retail. Hang up the phone. Not true. I could tell you stories of numbers where the seller let out and at the end of a 20 minute conversation where they end up and it's hundreds of thousands of dollars off from those two. Isn't that wild? Okay, and biggest rule in real estate never put yourself in the seller's shoes. I ask myself all the time, why in the world would the seller sell me their house at this price? This makes no sense at all. In fact, I'll tell you a story that happened in, is there may know where Viter Texas is? Okay, how far away is that from here? That's up by Houston, East to Houston. Okay, so I bought a deal in in in Viter, Texas and on the phone with the seller, the seller had gotten into a really bad experience with another wholesaler who had tried to do a novation and it failed miserably. Worse wholesaler ever. I mean, they just messed the whole thing up all along the way and sellers now talking to me and they said, look, I inherited the home. It's gone through probate. I'm living here with my brother who's deaf. We want to sell, but whatever these guys tried to do before with like showings and stuff, I don't want any part of that. And I said to her, I said, you know, Phyllis is her name, I said, you know Phyllis, if you would just list this for sale with a real estate agent right now on the open market, you could get way more than what I'm willing to pay you. Do you understand that? And she's like, yeah, I get that. And I said, okay, the price I'm going to pay is going to be significantly lower than what you can get retail. And she's like, I'm okay with that. I want these things. I want as is. I don't want to have to move the stuff that we have in here. I want to close in two weeks. I'd like it if you could release some funds early so we have money to move. I said, no problem. I can do all of that. And then I said to her this, I said, Phyllis, can I tell you what I'm going to do when I buy this? She's like, yeah, I said, once we close, I'm going to send someone over there and I'm probably going to spend less than a thousand dollars. I'm going to trash it out. Then I'm going to send a cleaning person there for a couple hundred dollars and clean it. Then I'm going to hire a real estate agent to do exactly what you could do right now. And I'm going to put it up for sale. And guess what I did? All of those things, I bought it for 34,000. I just went under contract yesterday for 52,500. Yeah. And I told her exactly what I was doing. Okay, zero sales process, just honesty. But guess what? Did I solve a need? Did I solve a problem? Could the real estate agent have solved that problem? They could have, but not in her circumstance. Because why? She's living in the home. She doesn't want anybody to come in the home. And it wasn't a great living situation, right? So she's embarrassed. And she needed money up front. Is a real estate agent going to give a seller money up front? I do it all the time. Now I make sure I have clean title and all of that. But I release funds early to sellers all the time because it's such a value add to a seller who is in a bad, desperate situation. Makes sense, guys? Okay, so it's understanding how to solve these needs and structure things in the right way. Okay, so I'm going to ask price again. This time I'm going to say under this type of situation, what would that look like for you? And I'm hoping that they come off of the pie in the sky zillow number and they come down to a more realistic number. But I don't really care what they do or what they say because I'm following a process. I just follow the process. Okay, don't get emotional about it. Just follow the process. Next step, determine the maximum allowable offer. What is that? That's the ceiling on what you can pay for the deal. Now, right now this is going to be the most complicated part if you're new in real estate because it's the analysis part. But I think I figured out how to really dumb this down. You guys want to see the most dumb down version of analysis you've ever seen? I think this is absolutely brilliant. I created this tool a couple years ago and it is an absolute game changer because what I'm going to show you right now is I do zero comping and I do zero repairs to get to my offer price. Who wants to know how to get to an offer price without comping and without estimating repairs? Oh my gosh. Yes, please. Okay, here's how we do this. I'm going to tell you big picture and then I'm going to show you an example. Can everybody see this? Okay, the first thing that I'm going to do is I'm going to determine the as is value. Now, not after repair. Throw that out the window. In fact, Jamil might have taught you all of this so maybe don't throw it out the window but set it aside. Okay, this is a different way to do this. Set after repair value, which is the fixed up future value of the property. Set that aside for a minute. What is the as is value in its current condition? That's what I'm looking for right now. Okay, in fact, I call it the adjusted as is value because I want this number to be the fire sale price. Like if I was on the market today, how do I get multiple showings and under contract and under a week? That number. Because if I'm on the market, I'm competing with everything else on the market. I don't want to sit on the market for a long time. I want to sell it fast, right? So I want to adjust it. I call it the fire sale price. What would be a price to wear if this house right now was on the open market and all the investors and their brother saw it that they'd be fighting over this deal because it's a good it's priced right. Ready with me? Now, how do we get to that as is value without comping? No comping. Here's how I do it. Whoops. I take the zillow realtor.com and redfin numbers and I get the average. By the way, I'll give you guys this tool. You guys want this tool? Yeah, you don't have to do the math. I'll give you this tool. It's a super complicated thing called a spreadsheet with formulas. Okay. But hey, I don't like to do the math with my calculator. Do you? No, I just want to plug the numbers in. Here's what's fascinating to me. If you take zillow redfin realtor.com and there's a fourth one here. So if you're using, you know, my software prop wire or any other comping tool you have, you could put a fourth one in there. But here's what's fascinating. I look at these stats every quarter or however often they put it out. Zillow has invested millions into their algorithm to value properties. It used to be kind of a joke. How many of you used to joke like the zillow number was like, oh my gosh, they're so unrealistic and so far off. I didn't think that way anymore. In fact, they put out a report that tells how accurate they are on their estimated values. And it's within like 10 percent. It's really close. They're really good. And I don't just take one. I do want to be in lazy. But I look at what, what, what, uh, realtor.com. Now, realtor.com, when you look at their number, they call it real number or real something, they actually give you three numbers. They use like core logic and a couple other tools. And they give you all three on realtor.com. Now, I take the average of the three on realtor.com. So I'm actually looking at six numbers. So I take the average of the realtor number. I take the zillow number and I take the red fin number. And then I take the average of that number. Now, that is a pretty dang good close number to value. Because all of these people are putting their millions of dollars of algorithm behind figuring these numbers out for people. You can bank on that number as going to be pretty dang close. Now, could there be some outliers like, you know, it has a foundation issue or some kind of weird things going on with the property. Sure. But for the most part, I bank on this number. I will take this number to the bank on the as is value. Okay. Everybody with me so far? So first thing I'm going to do is establish what? As is value. Without comping, I'm just going to use their tools to get me to a number I feel good about. By the way, let's say that, let's say that, what do I have on here? Let's say that zillow is 249 realtor.com is 275. And then let's say red fin is like way out there for some reason, like way off. Like, let's say it's 320. Well, I'm really looking for a pattern here, aren't I? So I might throw out the one that's way off and go with the ones that are a little closer together. Because really what I'm looking for here is, is there some congruency here? Does everybody kind of think that it's worth the same thing? I'll throw out the outlier that's going to throw off my numbers. Okay, make sense? Okay, step number two. If I'm going to wholesale this property and I'm going to take this deal to a buyer, which by the way every deal I ever do, I always want to have the option to wholesale it. Why? When you have the freedom to keep what you want and wholesale what you don't want, man, you have the ultimate business ever. That's why I believe every single real estate investor should know how to wholesale. Here's what I do. I keep the home runs and I wholesale the triples, doubles, and singles. Most of you guys are what most people do is they throw them away. They're like, oh, it's not the deal that fits for me. I don't want it pass. Not me because here's what I've learned. My single, like my single deal is somebody else's home run that I can wholesale and make money. I've gotten this far. I know how to negotiate and close deals. Why am I throwing these away instead of making money with them? That's how I look at the business. Okay, all right. So the next step we're going to figure out is the exit. The exit is the cash buyer price. This is the price, right here, that if I got a deal worth, I can't see it from here, 263, a buyer would gobble that up for 157. They would eat that deal live. That's 60% of the as is value. They're going to take that deal at 157. Now I'll show you how I got to that 60% in a minute. But that's the exit price that my buyer's paying. So what do I still need to factor into the deal? My fee, which is right here, wholesale fee, to get to my buy price. But my buy price is different than my offer price, isn't it? Because we're going to negotiate. Okay, guys, with me so far, this makes sense. As is value, what's the exit number, what's my wholesale fee, what's my offer, what's my buy price, what's my offer price. Those are the things that I need to understand. And I can do this in literally 10 seconds without using any brain power whatsoever. Who thinks that's cool? Because here's what I've learned. If you're comping and estimating repairs, you're using a lot of brain cells and you guys don't have enough of them. You just don't. Sorry, you don't. You have enough brain cells to do that until about from like maybe nine to noon and then you're toast. Seriously, you're fried. And you're going to be so exhausted and so tired because comping and estimating repairs requires a lot of brain activity. I don't like to use up those that many brain cells. I don't have that many either, just like you guys. So I want to be efficient with how I do this. Using this tool, I can literally get to my offer number in five seconds because all the green cells are formulas. So to get to these numbers, all I need to do is put in these three right here. In fact, if you guys want, I'll give you this two for free. I built a AI tool where you just give it the address and it grabs the Zilla Realtor and Redfin number and does it all for you. Come on. Isn't that cool? Yeah. You don't even have to put those numbers in. Look how lazy you guys are. Unreal, you guys are so lazy. Okay. So now we've figured this out. Now, how did I get to this number, the 60% exit number and the 25,000 whole sale number? I didn't just pull this out of thin air. Here's how I got to this. And again, I'm just helping you understand this. You don't need any of this to do the formula because it's already built in. What I found in 21 years of whole saline is these numbers here, the exit percentages are equivalent to the price of the home. Okay. You with me so far? So if the average value, as is value again, is under 100,000, buyers want to exit at about 35% of that on average. Okay. These are safe numbers. Like if you get numbers that fit this, you'll find a buyer every single time. Okay. If it's between, what does it say, 100 to 200? Yep. It's 50%, 200 to 360%, 300 to 465%, 400 to 570%. And once you get into luxury stuff, it's going to be a little more custom. You might go all the way up to 80%. It could. Okay. Now, my profit is also in direct proportion to sale price. So notice here, 10, 25, 20, 25, 30, 40. So if I'm going to wholesale, you know, a $400,000 house, I want to make a $40,000 wholesale fee. It's going to be pretty hard to get a $40,000 wholesale fee on a $50,000 house. Wouldn't you agree? It's just because it's all economies of scale, right? It's a proportionate to the price for the most part. Now, you can. So I'm not saying you can't, but as a rule, right? We want, we want to, we want guardrails here, don't we? Again, I'm trying to dummy this down to where I can do this again and again 10, 15, 20 times a day without using brain cells. Can't do that. Does this make sense? Yeah. Okay. Now, you can adjust this. If you get my tool, you can go in there and manipulate these numbers and it'll recalculate everything. But I think these are super safe numbers. You're not going to go wrong here. Okay. It makes sense. Now, there are a couple exceptions. If you are super rural, like in the middle of the freaking nowhere, adjust all of this like way down, okay? Because I can buy stuff rural all day long and I can get into it at 10 cents on the dollar. Good luck selling it. And I do that. I've learned that the hard way every time. I've gone in the middle of nowhere. I got something that literally 10 cents on the Zillow number and can't sell it because only four people live in the town, you know? So be very careful about rural. That would be one exception to this. But if you're in a primary or secondary market, or here's my rule, if you're within an hour of a metro market or a secondary market, you know, you're going to be pretty safe. As soon as you start pushing outside an hour away, then what happens is you can no longer get the buyers that focus on the Metro to come that far away. And now your buyer pool just shrank down to almost zero. The only way I really win rural is I actually buy the thing and put it back on the MLS. And then I'm hoping that the, you know, three people looking for a house in town are going to want it. But good luck finding a buyer. Like a cash buyer. Make sense? Okay. So here's what this might look like. I don't know if you can see this, but these are kind of that example here. So it's 263, 60 percent exit. You got the gross wholesale fee. Get you all the way down. So my max buy, my ceiling is going to be on this example 132. Everybody see that? Now that's the most I can pay to get the deal. But what's my goal in every single transaction? Make the most money I possibly can to bless my life, my family's life, and everybody else on my team. That's my goal. To get the best deal I possibly can. Yes? No, it's just it's going to tell, it's going to tell me the numbers. And then now I know what I got to work with. Find deals faster with prop wire. Search properties, skip trace owners, and get lead alerts. Download the prop wire app on the app store or Google Play Store for free. So, you know, if I can't get it for at least this, then it's going to turn red like already, like automatically, you know what I mean? Yeah, because listen, I don't put in the seller's numbers. I'm just putting in what I need to be at. Now now it's my job to see if I can get there. Okay. This is where things are going to start to get super fun for me. Now we're going to get into the negotiating. Up until this point, I haven't even given a price yet. Have I? Remember, I'm building my contract, filling out the contract, filling out the contract. Last thing I need to do is price. They've already told me they're going to sell it to me. Assuming we agree on price in terms. Now it's time to get there. So, what we're going to do here is what we call the anchor. And man, guys, if you learn how to do this well, you will make so much more money because I guarantee every single one of you are leaving money on the table. There's more in the deal you could have gotten. Had you followed a better process. There's the seller's asking price. There's my M.A.O. and there's my anchor. And what's the anchor? It's the floor, right? If they're pying the sky, then I'm way down here. That's my anchor. And I want to land somewhere where? In between. Well, what's my goal to be as close to which one? Anchor. I want to be as close to the anchor as I possibly can. And this is one of the problems why I actually hate M.A.O. Because if I tell my acquisition people, hey, here's the M.A.O. Go on appointment or go talk to the seller. What do they do every single time? They get the M.A.O. Yeah, tell me Jerry what number I need to be at and I'm going to go do a crappy job negotiating. And as soon as I get to the M.A.O. I'm going to say yes to the seller and we're going to lock up the deal. That's why I hate M.A.O. I wish I could take this out of it. But as new investors, you guys are going to lose your minds if you don't have like a number to work off of. You're just going to go crazy. I'll walk in appointments with zero M.A.O. I'll start at the absolute rock bottom and I'll work my way up to a number that I know is a a good number. With no AMAO, I won't even use this stupid tool I showed you. I'll just go in there, rock bottom, and see where I can land. Truly. Okay? Okay, next step. Let's talk about the anchor rules. Rule number one, it has to be unrealistically low, like offensively low. Not offensively low. Here's the thing, guys, if you haven't done the first whatever steps, those are seven steps, six steps. If you haven't done those well, then when you give your anchor price, it's going to be offensive. They're going to chase you off, they're going to hang up on you, they're going to be offended. Why? Because you haven't built trust. Okay? Everything I'm doing up until this point is building trust. Now, they may say go pound sand, you know, but they're not going to be offended because why? I've created a relationship of trust. I've positioned myself as an authority figure. I've done all the right things. They're not, they're, I never have a seller offended at me when I do my anchor. Because I do such a good job of creating proper expectations and building trust with that seller. Okay? That's why we don't do the anchor right out of the gate. If right out of the gate I gave my anchor number, what would happen? Click. Yeah. Okay. So rule number one, unrealistically low, rule number two, it should solicit a no. If they say yes to your anchor, what did you do wrong? You didn't anchor low enough. They should never say yes to your anchor. They should say no every single time or it wasn't low enough. We want the no because it sets us up for the next step and it's not a firm offer. It's not a firm offer. It's an idea. Because let's say that I anchor and I say hey, seller, the most I can pay is $100,000 and then you go up to 110. What did you just do? You lied. You lost credibility. So here's how we do this. There's two ways I like to do this. I like to say in the perfect world, it would be great to be in the low 100s. In the perfect world, it would be great to be in the low 100s. Now, what's not firm about that? What does that mean, low 100s? Or my favorite way to say this is I say, imagine if you got other investors from those other low ball guys, they would probably be in the high 200s. Now, who's the bad guy? The other investors, not you. They would be at 200s. But see what I'm doing here. It's vague. It's a ballpark. It's an idea. It's not an offer. You know what, guys? I do this exact same process with agents, by the way. So you guys have learned intensely direct agent, right? I do the exact same thing. I'll tell an agent, you know, I know you have it listed for $4.99, but honestly, I would probably need to be somewhere down around the mid 200s for this to work. Now, what do I just do? I just gave my low anchor to the agent, and I'm looking for a response. Okay, so what kind of response are we hoping to get? There's no way I could go that low. When they say that, I'm like, yes, God, I mean, maybe. And here's your response to that. What do you say? I totally get it. That's my price in the perfect world. Now, here's the key. But how close to that can you get? Oh my gosh, this is just magic. Now, what do they do? Boom, you're going to see a massive price drop. How many of you were at squat up summit 25? Did you guys hear the live seller call I did? Do you guys remember? I got them from, I forget what the numbers were, but it was like $150,000 off of their initial ask price is how far they came down when I got to this step. And it's crazy. In front of 4,000 people that seller just was like, well, you know, I could probably do boom, boom, boom, they come down. Okay, now, when they give that number, think about our, think about our, where's go back to that graphic? Think about this. I anchored, they said, no, I said, how close do you, can that, can you get? They come down. Am I done? Do I take it? Let's say they're in the profit zone. Do I take it? No, I don't take it. But Jerry, they're in, they're at the M.A.O. or they're under the M.A.O. Dude, let's, let's take the D. It's agree, we, it's a profitable deal. Nope. Because what's my goal? Make the most money I possibly can to bless my life, my family's life, and my team's life. Guys, if you're not making a profit, who are you helping in the world? And I assume every single conversation I have with a seller that they're of sound mind. Now, if they're not of sound mind, don't, don't buy their house. But if they're of sound mind, my job is to find the lowest they'll take on every single time. That's my job. And they'll, they'll stop when they're at their lowest they'll take, won't they? So, am I taking advantage of anybody? I'm not taking advantage of anybody. I'm just finding the bottom that the seller is willing to take for their, to sell their house for me to solve their problem. I'm solving a problem. What's the lowest they'll go for me to solve their problem? That's my job. And I own that job and I embrace it. There's nothing icky about this for me. Now, if you have, if you have an issue with that, you got to really work on your mindset because you're going to be horrible at this business. You are. If you're like, I just don't feel like I just don't want to take advantage of anybody. So, I'll overpay. What? That ain't how this works. Okay. Okay. Let's go back to where are we? Right. Is that where we were? Okay. So then, now the step seven is I'm going to close the gap, close the gap between the anchor and the MMO. So, I'm going to go right back to the exact same process. I'm going to counter slightly up from my initial anchor price and repeat the process. So, I'm going to say something like, you know, if I could get closer to like 115 range, how would that sound? Now, remember, I said low 100's the first time. They came back at, let's say, 180 or who knows what? I'm going to go right back and I'm going to anchor again slightly up from where I anchored initially. And when they say, there's no way I can go that low. What do you say? Okay. Well, how close to that can you get? Guys, if you watch me do this, just sometimes it's like five, six times back and forth. They're coming down a little bit, a little bit, a little bit. I'm coming up a little bit the whole time. I've got my MMO in the horizon and I'm slowly inching up. My goal is that they come down exponentially and I go up incrementally, right? Okay. Once we've landed where I feel like I've closed the gap as much as I possibly can, and guys, if I can get the deal for a thousand dollars cheaper, that means I can sell the deal for a thousand dollars more. That's a thousand dollars I just put in my pocket. Is this worth doing the extra step? Now let's say you were able to carve out an extra five grand on every deal you did because you actually followed a sales process and you're doing 20 deals, 30 deals, 100 deals. How much money is that? It's significant, isn't it? Okay. So now we're going to provide a firm offer. It looks like this. Hey, I appreciate you working with me. I would love to put a deal together with you. If you would be willing to put together an agreement right now today, I would be willing to come up to 138,000. Can we make that happen? Now it's my firm offer because I've closed the gap. Now I'm going to come in kind of hot and heavy and I'm going to lock up the deal at what I feel like is the best deal I could get out of the situation. Okay. So let's walk them through again. We're going to get the seller to give the initial ask price. We're going to uncover sellers motivation. We call that discovery. We're going to get the seller to pre-commit, pre-close. We're going to ask price again this time showing benefits and solutions. We're going to determine what our M.A.O. is. And let me let me stop here for a second. If you're using that tool, could you feasibly do this on the fly right while you're in the conversation? Do you have to say to the seller, you know what? Let me go back to my underwriting team and I'll call you back in two hours after I've poured over comps and got bids from contractors. I'm doing this while I'm talking to the seller. In fact, if I need to buy myself some time, guess what I do. I say, you know what? Tell me a little bit more about the condition. While you're rambling on and on and I'm not listening, I'm filling out my Zillow redfin and realtor number. What if you're door knocking and you're in person and you can't be like doing work while they're rambling over the phone and you're actually talking to them. Great question. If I'm door knocking, I know what neighborhood I'm in and I already know my number before I go up to the door. You're in the neighborhood. You're M.A.O. number. Yeah. Yeah, you better already know the value. If I'm in a neighborhood, I could before I knock that door, I can be like, okay, this whole neighborhood, three bedrooms, two baths, bricks, whatever it is, I need to be around this number. number as my max. And I'm like, don't even need to worry about it. Yeah, so this is where we're closing the gap, you know, and let's say that like my last anchor number was like 120 or 125. They're at 140. And I've kind of gone back and forth. I feel like I've squeaked every last dime out of the cellar. Then I want to give my firm number. So this is where I want the hard commitment from the cellar. So this is where I say, if you'd be willing to put together an agreement today, if you're not willing to put together an agreement today, then what we're done, you know what I mean, like why are we talking? If you're willing to put together an agreement today, I would be willing to come up to because what's happening here psychologically? It's sort of like with kids. We'll tell our kids like for bedtime. Let's say that I want the kids to go to bed at eight o'clock, but I want to give the kids, I want the kids to feel like they're going to win in the deal. So I'll say to the kids, I'll say, hey, would you rather go to bed at seven or eight? And they're like, look at me, I got so much choice in my life. It's kind of like that idea. And they walk away going, I can't believe it. We got another hour or out of bed time. That's what I want the cellar to walk away with. If the cellar walks away thinking that you work them down, they're not going to sign the contract. They have to feel like they worked you up. You want them hanging up the phone going, man, I got that sucker. I got that sucker. I showed him. He thinks he's a sales guy. Look what I just did. I got him all the way up to 138. That's the mindset we want to have happen, okay? So that's why we structured this way. So I was just looking at the whole structure so far, the whole process for on the seven. Where is that actually played out on the phone call or as he was saying in person at a site visit? Great question. So there's two ways to close deals on the phone in person. Now in my business, I do both. I have an in-person business model where we're in a very specific backyard market and we go on appointment. We do not close on the phone. Every phone conversation is a little bit of qualification and then we make the appointment and we go do this in person face to face. So the exact same process works in person or on the phone. Now which one's better? In person every single time. Oh my gosh. If you can set up a business where you're not virtual and you're in your backyard, put it this way in my multi-million dollar operations where we're in a backyard market and we go on appointment. We close one and four appointments that we go on and we'll walk into an appointment and on the table they'll have five contracts printed out all on the table from virtual and we'll walk in there and we'll walk out of there. Our average appointments are an hour-and-a-half. We'll walk out of there with the contract for $25,000 less than their lowest offer. Why? Because I throw everybody else under the bus and I say to that seller, I'm here. Here's my 100 Google five star reviews. We live here. We do this. I'm a real buyer. By the way, let me show you these contracts. See here how it says the seller, the buyer has all the way until closing to back out of the contract. See here how they have a $10 earnest money. These are crap offers and why are they crap offers? Because it's a virtual guy in another state and he has to have all of that flexibility in the contract in case he can't move the deal. He needs to be able to back out of the deal. Well, I'm here. I know the neighborhood. I'm looking at the house. I'm belly to belly face to face. I can come in with a firm, hard contract with solid terms and I can make that seller feel so good about Jerry Norton that why in the world would you chance it with these other people? That's how powerful in person is. If you can do an in person model, you will absolutely kill it. So to tie into his question back there while you're talking to them, if this was in person, you could say, you know what, as a matter of fact, and then work out the calculator, couldn't you just say, hey, give me a second, click it in. You could work that in, couldn't you? Well, yeah, but I'm going to do that on my drive to the appointment. Because I don't want to tell the seller, hold on a second, I'm going to get up Jerry's AI tool. I mean, I could, but I have a 20 minute drive to the house. Why not walk in there already with your number in your head? Yeah. Oh heck, yeah. One for you, one for me. Oh, yeah. Because every door I knock, I'm closing this deal. Think about it this way. One of the downsides to an in person model is scalability. People tell me all the time, they're like, well, I can scale so much more virtual. Well, maybe, but if I can close one in four appointments and I can have my lead gen so dialed in that I have four appointments today, nine, 11, one, and three. And I can go on four appointments today. How many deals am I doing? One a day. How much more do you want to scale a business? That's as big as I'll ever want to be. You know what I mean? Question. Does this also work for direct to agent? And if so, like if you're doing it in your hometown, do you still want to do it in person? No. Just with agent or just. I hope Jamil told you this. Don't go on appointment with agents. Okay. Don't go look at houses with agents. Yeah, there's because I shouldn't say that. I shouldn't say that. I feel like with agents, you can build connection without having to meet them in person. Sellers, it's a lot hard. It just doesn't work as good. There's so much animosity towards you from the seller direct to seller because in their mind, you're going to steal their house from them and wrap them off and you're you can't be trusted. So you you right out of the gate have to overcome that objection with sellers. You're a big bad investor. You're here to screw me. That wall is up. Now agents are also tainted towards wholesalers quite a bit. So you still have to overcome that objection. But it's B to B, right? It's it's investor to agent. So I feel like you can build that connection in relationship on the phone without having to meet them in person at properties. So if you're doing the direct to agent model, then you're just negotiating with the agent in a similar way or it's a different. Well, it's in a similar way, but the problem is just going to be there's a lot more nuance because you say that agent, the agent goes back to the seller, the seller tells the agent, the agent comes back to you and it's a bunch of nonsense, right? Like it's so annoying. I wish I could just say to the agent, can you just get out of the way? I'll pay you your commission and let me talk to the seller. You know much more deals I would do because who screws it up every single time? The agent. Because I don't know their tonality. I don't know how well they're selling this to the seller. Like most most agents are not good at sales. You know, when you get your real estate license, the three most important things they should teach you is business, marketing, and comping. Guess what they don't teach you at all at real estate school? Any of those, they teach you meets and bounds, how many square feet are in an acre, and so on. Stuff you'll never, never use ever. Yeah, so agents, I have to teach agents the sale process. Okay, thank you. Great question. Other questions? We're about out of time, but let's, do we have to go right this minute? Question? Yeah, so if you're doing this direct agent and they have to go back and forth, I mean, is there, they're legally obligated to give your offer to them? Not necessarily. Okay, so did Jamil teach you guys the double-dip strategy? Okay, so the double-dip strategy is where you go directly to the listing agent and you let them represent you as the buyer's agent in the transaction. So they're dual representing. They're already represent the seller because they have the listing. You're offering them the represent you as the buyer. Now they have a choice in that. So if you say to them, "Hey, will you dual represent this deal and represent me as well as the buyer?" And they say, "Yes." Now they have a fiduciary duty to present the offer to the seller, but if they say no, go find your own agent, then they could not make the offer if they don't want to. Does that make sense? Now, what I do with agents is I don't push for a written offer, I push for a verbal. So for example, I'll say to the agent, I'll say, "Hey, remember my low anchor? Hey, you know, in the perfect world, I'd be around the mid-200s. I know that's way off of your ask price, but would you mind going back to the seller and giving them my verbal?" And then let's see what they do and we'll go from there. And so I convinced the agent to go low anchor for me because I'm just looking for the seller to engage with me. And when the seller comes back and says, "No way, go pound sand," or they're countering you at this, I just kind of go through the same framework of, "Okay, we'll go back at this, go back at that." And then I would love if they put it in writing, but they won't because they're lazy. So I get them to do verbals until we get to where we should put it in writing. Sir, it just takes you longer to get there. It's just way longer because there's one more cog in the wheel. Yeah. I called the double dip because they're getting the listing side and the buyer side. It's called dual representation. Did we understand how that works? There's two agents in the transaction. The listing agent representing the seller and the buyer's agent representing the buyer. Those can combine. Same agent gets both sides. Question back here. I slip in Maryland and I actually have tried to do that with [BLANK_AUDIO] and they're telling me that it's illegal to do that now. - Okay, I was wondering if someone was gonna bring that up. 14 states have where you can't be dual agent, but I'm telling you, Florida's one of 'em and Texas is one of 'em. We do it like crazy. Don't worry about the structure 'cause what they could do is become a transaction coordinator in the deal, meaning they don't represent either party. So trust me, just offer it to the agent. They'll figure out on their end how to stay compliant with everybody. We do it in Florida and Texas every single day and both of those don't allow dual agency. Okay, they could say, "Hey, I'm a, there is no buyer agent commission, but let's make your side 6% instead of 3% and I'm still bringing the buyer to the table. Will you do that seller?" And the seller says, "Yes," or whatever. Or you pay the other 3% and you factor it into the deal. Like there's so many ways to deal around that. The point is, you want the agent to get double paid so they go to bat for you. And there's, so don't worry about that part of it. That's a nuance. Just offer it. Yes. - All right. You mentioned at the beginning that you most of the time give money a front to the seller. When will you not give money a front to the seller? - I never do it until I have clean title. So here's where this comes in important. What a lot of people do is they do post occupancy. What does that mean? That means after we close and you're funded, I'll let you stay in the property for two more weeks because now you have money, you can pack and move. I hate that, I don't like to do it that way. Why? Because let's say I hold back $5,000 but they got the other $80,000. Now they're flush and cash. What incentive do they have? - None. - They're less motivated. Instead what I'll do, as I'll say, how much do you need? For a grand. Okay, once we have clean title, I'll give you the four grand now, but you don't get the other $80 grand until closing. Now how motivated are they to get out? Because the bulk of the money's coming at closing. And I feel safe and protected because they're not gonna not close 'cause they got a couple grand out of me. They want the rest of the money. So that's what I mean by that. It's a super big value ad. - So it has to be a clean title. Other than that, you don't give money. How about you see if it's a pre-forclosure? - Pre-forclosure, I have to feel super confident that we're gonna close. If there's any doubt whatsoever, we might not close. I don't want to give money up front 'cause then I'm at risk. - All right, all right, thank you. - We have a question right here, too. - Right, where? - Over here. - Oh. - I just want to make sure I understand you correctly. Did you say that agent does not have to offer a written offer? - No, if it's a written offer, they'll have to present that. All I was saying is, people say to me all the time, they're like, well, the agent has to present your offer. No, they don't. They do if they agree that there's representation in the transaction. Now, if I went and got another agent and we presented a written offer to the listing agent, yes, they would have to present that. But if I'm asking the listing agent to represent me and make a verbal offer, they could say, no, I'm not going to represent you. Go get your own agent, make your own offer. - Got you, okay. - That's all. - Thank you for clarifying. - Yep, question back here. - Hi, back here. I'm just wondering, what is your favorite a way to get direct to seller leads rather than having to cold call? - Oh. I don't have that time. Well, so to answer that. - Here we have it for free. - Yeah, and for free. (laughing) Yeah, okay. There's inbound marketing and outbound marketing. Outbound marketing, like cold calling, is cheap, but it takes six months, smaller fees, a ton of work, but it's cheap, okay. Inbound marketing is gonna get the highest intent seller, highest motivation, you're gonna have a 30 day window, you're gonna get the biggest fees, but what's the trade off? It's expensive. That's your Google ads, that's your paper lead providers. So what do you want? Do you want cheap, longer, less money? But it's cheap, or do you want expensive, but I'm getting bigger deals and I'm getting them done faster? Everybody has to make that decision. Usually it's developmental, right? You start out with the free, then you go to cheap, then you go to expensive. Like that's the progression usually. Unless you have a big fat marketing budget, you have to start out with the free, which is why I'm such a big teacher of direct to agent, 'cause why? It's free, it's a lot of work, but it's free. What I'd rather do is run Google ads, get a seller who's super hot and motivated, we close it for a $40,000 profit and we close in two weeks and I made my money back. And I can close one in 10 of those, versus one in 50 cold calls. See what I mean? So there's just a place for everything, where do you fit in the equation? Okay, and so you would say Google ads over Facebook ads if you're willing to invest in me? Yes, okay. Facebook ads aren't intent based, people are scrolling and your ad pops up. Google is they typed in, sell my house fast for cash and you pop up. See the difference? - Yeah. - Way more effective. - And just one more question, what is your closing rate on the phone? - My clue, okay, so here's how I look at the entire business. I have leads, which is anybody on a list that I think might be in distress. I have opportunities and opportunity as someone who said, yes, I'm interested in selling, I'd entertain an offer. I have an appointment, which in this case would be the closer framework, whether it's on the phone or in person. That's an appointment. I have a contract and then I have a closing. Let me say it again, lead, opportunity, appointment, contract closing. I track those numbers meticulously. I know exactly what my ratios are all the way down. So I said earlier, my appointment to contract ratio is what? One and four, guess what my opportunity, yes, I want to sell to appointment ratio is. Well, industry standard that's good is about 25 to 30%. So out of 10 people that say, yes, I'm interested in selling, people will go on two or three appointments after discovery, they'll be like, you know what, I'm not going to go on appointment, they don't seem super motivated. We've changed our policy, we have two rules now. Yes, I want to sell and they have equity. So we look them up on prop wire, do they have equity? Because I don't want to go on appointment if they don't have equity. Because I want to be able to buy deep. And then we go on appointment. And what I found is that on appointment, they're going to tell me everything and anything now that they won't tell me on the phone, right? Because the guard's up, I don't trust you. Now I see you in person, you're a real person, you're a nice guy and I'm a nice guy. So it's, you know. And so then now I end up getting way more deals. So we have a 50% from opportunity to appointment ratio, a 25% ratio from appointment to contract ratio. And then I want my contract, the close ratio to be three out of four, 75%. So three out of four contracts, we get to the closing table. - Thank you. - Is that helpful? Okay, now, if you tracked all your stats in your business and I could lift the hood and look under the hood of your business, I could tell you in 10 seconds, the health of your company, where the problems are, where the holes in the boats are, and what you need to fix. But see, most people don't what? They don't know. So then you guess, you just guess. Oh, we need to fix this. Most people think it's a lead problem. That's where everybody thinks, oh, I have a lead problem. No, you don't. Most people don't have a lead problem. They have a conversion problem. I'll keep going till they kick us out of here. Do we have to stop? Otherwise, we'll keep going. - We've got time, Jerry. 130 is when they'll have to be back here. - Oh, sweet. - Let's go. - Are you using. - Just stop me when I'm too far. - Are you using something specific to track here? Your numbers, like a specific system, are. - Yeah, I mean, we use a CRM. Yeah, we call it the low-ac, L-O-A-A-C. Lead opportunity, appointment, contract closing. But you could do this on a spreadsheet to begin with, right? But yeah, a CRM's really nice. But I'm just, it's mandatory in my company that we track all of this, all of this data. Because how do I know what's going on if I don't have the data? I have to have the data to know where we need to improve. And every week, we pull up the low-ac, and I'm looking at that with my team. Where are we at? How are we doing? Where do we improve? - Actually, team just said one more question. One more question. - Terry? - No. - Where? - For a site over here. I'll run this over to you. - There you go. (audience cheering) - Terry, when you were mentioning that when you do in-person and you were using the credibility with your documents versus somebody that's not near them, what were the things that you pointed out on their documents? - Yeah, great. So, we often think that price is the only thing that matters to a seller, it's not. In fact, for a retail seller maybe, but for a motivated distress seller, price is actually way down the line. Terms are usually way more important, meaning speed and certainty. A distress seller is selling to you for certainty. They want to know you're going to perform and solve their problem. That's most important. You have to understand. So if you guys are. have lived in a retail world. This is why agents have a really hard time transitioning to an investor, because they're so trained to think like retail. That ain't how motivated sellers work. So what are the things that give a seller certainty? Closing day, contingencies. The more contingencies, the less certain the seller is, right? 'Cause you can back out now. So what I wanna do is I wanna close all those loops. Now, there's nothing wrong with contingencies, like I'll have contingencies too, but I'm using that as a negotiation tool. Now, if I'm on the phone, I have to have contingencies. Why? I haven't seen the dang thing yet. Yeah, so I have to have an inspection contingencies. But here's what I do. On the phone, I'll say this to the seller. I'll say, look, based on everything we've talked about, I think this is a great number to make this work. We need to put an agreement in place. I can't do the next step, which is open title, until I've got eyes on the property. So in the agreement, I'm gonna send over to you. You're gonna see a little thing there that says inspection contingency. That's my due diligence period. All I need is five days or whatever. I'm gonna send someone out. We're gonna walk the property. I'm gonna make sure nothing weird's going on, like a foundation or a roof issue. As long as it checks out, and it's exactly what you tell me it is, then we'll move to the next step, which is open escrow and move to closing. But if I get on that appointment, and I find out that there's a hole in the roof, that you're not telling me about now, then we may have to revisit all of this. Now, is that honest? Is that transparent? Yes, I don't bury it and hide it. I was just looking at another wholesalers contract, and guess what it said in there. It said, buyer has all the way until closing to perform due diligence, and at the buyer's sole discretion, they can postpone closing another 30 days. It's horrible. Now, if they told that to the seller, and the seller was okay with that, fine. But they don't tell the seller that, and they build that, now why does the wholesaler have that in there? I gotta have more time to find a buyer. I don't know if I can do this deal, and I need to be able to back out of it. And so here they are stringing along the poor seller. So, though all those things earn us money. So your biggest things right now are closing date. Your other biggest thing is earn us money. Your other biggest thing is any type of contingency. Like inspection contingencies. So, when I'm comparing myself to another wholesaler, I'll tell the seller, say, hey, if it'd be helpful, I'd love to look at your other offer, and just give you my advice on what to watch out for. 'Cause there's a lot of people in this business that don't treat sellers right, and I don't want that to happen to you. After that, if you decide to go with them, totally get it. Would that be helpful, seller? And guess what they say to me? Well, sure, tell me what you think. And I'll point out all the things in their contract. And then I'll come back strong with mine. I'll say, listen, I know my number. I'm here looking at it, so I don't need to do that. I'll come in with a $5,000 earn us money deposit. You don't have to go that high, but you know what I mean? And I can close whenever you're ready. We can close in two weeks if you'd like. And I'll give you $5,000 before closing, so you can move if that would be helpful once we get clear title. See what I'm doing? All of a sudden, now I'm walking out of there with a $25,000 better deal than everybody else because of certainty. Hey, thanks for listening to this podcast. To get more free tips, check out my YouTube channel, just search flipping mastery TV on YouTube, where I have over 1,000 videos teaching you how to make more money with real estate. On my channel, I also give away free stuff like my quick start kit with everything you need to flip your first house in the next 30 days. Or my deal-finding software called Data Cruncher, which finds discounted houses in any zip code in a matter of seconds. You can get those for free at myquickstartkit.com and my data cruncher.com. (upbeat music)