You Can Be Better

Hey all! Long time, of course, and this blog deserves a full update. But a bad interaction with a Zillow sales rep left me thinking. Despite the fact that we are ALL very hungry to close a deal, first thing comes first (and will make us more money): Be a decent human being always!

I know we’ve all felt like Alex from Zillow. He wanted to close the sale. He felt I wasn’t “getting it”. I didn’t like something he said and it offended him. He decided I was ridiculous and “trite” and told me so.

There’s a certain way of thinking that says sales is only a numbers game, and the point is to WIN.

I completely disagree.

Sales is first and foremost a SERVICE industry.  We are servants, who make money by serving the best interests of our current clients and our potential ones.  We should not set out to conquer anyone, or aggressively approach leads as if this is a sport. There is no winning – there are only people who need your service or product, and people who do not.

I’m assuming you are a professional.  Professionals are great at what they do, and they focus on doing that.  If you are a real estate investor, you KNOW real estate. You know the market. You can spot a good deal.  You are a creative problem-solver.  Be those things. Be truly excellent at them.  And then go serve.

By the way, if you are excellent at what you do, you have 80% of your job done.  You will speak confidently. You will provide your prospective clients with everything they need to make an informed decision and your current clients with the expertise to get the transaction closed. Alex had this. I could tell he was great at what he did: he knew the product and followed up with me consistently.

Service may represent only 20% of your activity, but as an attitude it’s the foundation of what you do because it shapes every interaction you have with your clients and sellers. Are you here for them or for you? Are you coming from contribution (as Keller Williams likes to put it) to add something of value to their lives, or are you there to close a sale and move on to the next one? Your prospects will know!

Being better at service is a practical matter.  Unfortunately, the sales rep’s lack of a service-minded attitude lost the sale for me. It made me question his commitment to ME. Service may only be 20% of your job, but without it you will lose clients and money. An aggressive, overly-eager, greedy or arrogant mindset is off-putting and people will go elsewhere.  (I’m planning to find another Zillow rep to help me.)

Approach each lead as an opportunity to serve.  This is called love, by the way: putting someone’s needs before your own. It takes trust in that principle to let go of the gnawing, anxious need for a “yes” and focus on the needs of the individual in front of us.  We need the affirmation…and we need the money! Without even realizing it, though, we become adversarial and treat sellers and prospects as if they are standing between us and what we want.  But they are not – we are there for them, not the other way around.

Be humble. Ask a lot of questions. Provide lots of answers. Get to the bottom of their needs. Don’t be offended. Don’t be superior. Be helpful. Be honest. Don’t sell them on “yes”. Accept “no” graciously.

So yes, you can be better! You can be better at your trade. Start by being a better person. Let go of the need to close the sale, and embrace being a servant who knows her stuff. This will result in a low-key approach that will actually end up attracting much more business your way, because it exudes kindness and confidence all in one.  And everyone loves that.

Is this how you already look at your job (my husband thought most people already do)? How do you handle bad service? Friend me on FB and you can join the conversation.

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Filed under Ethics & Etiquette, Fear, Marketing, Negotiation

About That Radio Silence

I closed on a property last fall and let you all down! I didn’t read you in, and it was a good one: an out of town wholesale transaction with a repeat seller.  It went smoothly for every single party involved and really hit home for me two things:

1) Networking works. Who hasn’t said that? But I have dug my heels in on this point.  I don’t like networking or schmoozing or talking to people when I don’t want to.  I can be very outgoing, but tend to be introverted in that I don’t want to chit chat with you – I want to get right down to things: either business or deep thoughts.

But networking is worth it.  And by networking I don’t think I mean what I’ve always had in mind.  In this case, networking involved my repeat seller. We bought a house from her through seller financing in 2012.  We’ve had a great relationship along the way, refinanced out of the note just like we promised, offered to help in any way we could now or in the future – and then she called.  So I would say that part of networking is maintaining healthy relationships with people you already know by being someone they can count on, who is pleasant and has integrity.

The buyer also came from networking.  I have dear friends in the property city who are also investors.  I called and reached out to them and they just happened to know someone looking for their first investment property.  It happened just like that – and of course I sent them a thank you gift for connecting us!

It was THE smoothest wholesale transaction I’ve ever had, and I believe that’s mostly because I have a history (a good one!) with the seller, and the buyer came from people I already know (which meant they were quality).

2) I came into wholesaling to make money (check!) but have realized I need to do real estate in a way that leaves me more fulfilled.  Offering a cash, as-is offer to motivated sellers, or sellers with run-down houses, is a GREAT solution for that sellers’ problem.  The issue, for me, is that wholesaling and creative financing are only good solutions for a very small niche of sellers.

And because for me it’s all about giving them the perfect solution to their real estate situation, I find myself frustrated that I can’t offer sellers a full gamut of resources to do that.  Only 1 in 20 of qualified leads need to sell at a wholesale price or for great terms.  The rest might want a quick sale but only at a retail discount (wholetail), or are only looking for advice on how to list a house that is not retail-ready.

My Myers-Briggs test says that making a difference and job satisfaction are HIGHLY important to me, and it’s true, so I’ve opted to get my real estate license.  For the record, I actually think there’s more money to be made by focusing on certain investment strategies (wholesaling, rehabs, etc.), but I’m hoping this is a great fit for me.

And that’s what I’ve been doing in this time of blog silence.  I should be finished up soon and (if my background check will go through quick enough!) take my test by the end of the month.

Everyone needs to do what is most important to them; what is most consistent with their goals and values.  This is my version – I hope you are doing well at creating yours!

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Filed under Ethics & Etiquette, Motivation, Planning

4 Questions with Sharon Vornholt

Hi all,

A couple weeks ago my friend Sharon Vornholt posted an interview she did with me. She asked me 4 questions about being a real estate investor – it’s part of a series she’s doing on successful women in real estate, which is fascinating to read since she’s interviewed so many wonderful women.

You can read the interview here.

Be sure to browse the other interviews she’s done in this series and her wonderful podcasts.  Great info!

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Filed under Education

Outsourcing: Scrubbing Leads

Outsourcing is a big topic.  It’s sort of a fad now, but it’s also just the way business is run. Us small-business owners have to leverage technology and time in a smarter way to make sales, build our business and still have time for being human: relationships, rest, eating, helping.

I actually don’t like outsourcing because it involves managing people, something I’m sort of terrible at.  Lock me in a closet with a book, pen and paper and some good music and I’ll emerge days later happy and well.  But I need to involve people in my business to honor the other obligations in my life and take good care of myself.  And in order to do that I must outsource, AND prioritize what I outsource.

I start with WHAT I HATE MOST or WHAT IS MOST EXPENSIVE (measured in time or money or both).

It just so happens that scrubbing leads hits every one of those criteria.  To buy a new absentee owners list to replace the one I have would be well into the hundreds and hundreds of dollars, and to do it myself would take hours and hours that could be better spent talking with sellers or doing marketing.  

I also HATE, HATE, HATE scrubbing lists.  Any repetitive task makes me feel dead inside; it drains the life right out of me.  And there’s no pressing need for me to do this one (unlike other repetitive tasks, like feeding my children!).

So I’ve made it a priority to outsource this consistently.  Here’s a look at the instructions I came up with for my VA.  It’s simple, and really all that’s needed since I have a good VA and will also do a quick chat with her to answer a few specific questions.

Screen Shot 2014-08-27 at 11.51.24 AM

I believe next up will be data mining for my probate leads!

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Filed under Absentee Owners, Planning

A Tip for Determining the Value of a Property

There are so many different ways to find comparable properties when you’re researching the value of a property.  But I wanted to share a quick tip I will use when I feel stuck.

When I look into how much to offer on a house, I start with the obvious: properties recently sold to investors.  If there aren’t many of them, I might look at other things, but if after searching high and low I’m still not sure, I will do this:

First, I’ll go onto Craigslist and search to find properties that are for rent in the same neighborhood as my lead. The fact that you can now search by map makes this even sweeter.  It’s so easy!  Pick 2-5 that are similar to yours, and note the address.

Then, go to the county assessor (or appraiser) website and research those properties.  On my county assessor’s site I can see what the owner paid for it and when.  It may not be terribly recent, but if it was in the last couple years, it gives me a ballpark idea of what active investors who currently own in that area will pay for a similar house.  It really helps a lot when you feel you’re going in blind.

(And having that same list can be the golden ticket if you get the property under contract!)

Happy investing!

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Filed under Comparable Analysis, Marketing

How to Talk to Motivated Sellers

Hi friends,

Getting involved in real estate investing promises at least one terrifying experience: talking to a motivated seller the first time (and even the second, third and fourth time…).  I remember the first few months I started getting calls, and how cold my hands and feet went, how shaky my voice sounded, and how tightly I held onto my script!

My friend Sharon Vornholt hosted a fantastic call with me on how to approach talking to motivated sellers, and we literally flew by the seat of our pants doing a role play call.  I was really nervous going into it, but it ended up being a blast.

I hope you enjoy it.  Write me an email or leave a comment and let me know how you liked it!

 

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Filed under Education, Fear, Negotiation

A Formula Doesn’t Always Work

I got word yesterday that a buyer is ready to move forward with a property I have under contract.  Always great news!!  But if I’d followed the typical wholesaler formula that is plastered all over the internet, I probably wouldn’t have this deal.

Here’s why.

The typical formula a savvy beginning investor would find out there for wholesaling looks like this:
ARV (After Repair Value) x .60-.70 – Repairs – Your Assignment Fee = MAO (Max Allowable Offer)

Take the neighborhood below, for a typical 3/2/2, following the typical formula:
$110k x .70 – $20k – $5k = $52k MAO

But look closely  at the properties that have sold in this neighborhood:
Screen Shot 2014-06-23 at 8.40.17 AM

First notice that I didn’t cross a major street for comps.  I also stuck to recent comps, no older than a year, putting more emphasis on the most recent ones.  So the average ARV is about $110k, and the average investor purchase price is in the $70’s.

Most of these sold comps had pictures or good descriptions of the condition.  The ARVs usually had replacement windows, but only basic upgrades; all had new paint and were fresh and clean. Most of the investor comps  were in decent condition, only outdated and possibly needing a couple major repairs like a new roof or heating and air units.

Based on this information, an end buyer could pay up to $75-77k for the house.  That’s over $20k MORE than my formula told me.  So in this case, you could get it under contract for $70k and still flip it for $5k. (Get it under contract for less and make  more! But $5k is a good average wholesaler’s fee.)

I’ve been outbid 3 times in the last two weeks and that’s frustrating!  But it reminds me to pay closer attention to the comps and hold loosely to my formula – the market determines what we can pay and nothing else.

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Filed under Comparable Analysis, Deals, Education

Deal Breakdown: Quick $1k in OKC

Hi all, I thought I’d check in to tell you about our first deal of 2014!  It was a thin deal (hence the $1k), but it’s pretty great it worked out, especially as I was a helpless sicky in bed during half the process.

The seller was part of a small probate campaign,  which was actually over a year old (something I know my friend Sharon would like to hear, since she often talks about perpetual marketing). I’d sent him only one letter, in January of 2013.  But last month I was going through old leads and decided to resend to my probates – and it was worth it! That campaign only cost me about $60.

Once he emailed me, things went quickly – I made an offer (by email) of $44k and he accepted. I used my free version of HelloSign to email him a contract that I uploaded, which he electronically signed on January 30. Due to (another!) snow storm, we had to delay the inspection a few days, but when my inspector-friend did go, boy howdy, it was worse than I thought.

It had been vacant for 3 years and there was more deferred maintenance than I realized.  I had to go back and re-negotiate the purchase price, and we almost came to an impasse.  I offered $29k, but he wouldn’t do less than $40k. I explained that I didn’t think it would sell for that, and that he had a much better shot at finding a buyer if he would at least go down to $35k.  He agreed to $37k, and I told him I wasn’t sure it would sell, but that I would try. That was February 6, and the next day I caught the worst stomach flu I’ve ever experienced – I was in bed for 5 days. 5 days! With a property under contract!

Thankfully, my husband was willing to try out dealing with buyers (something I don’t like anyway). I moaned out instructions about which buyers to call, what to say, and the selling parameters. That same day he got an acceptable offer from a buyer we knew, and it was under contract the next day!  I was so grateful for his help – and pleased to discover he has a knack for doing the job that I dislike.  🙂

We had a few hiccups with the contract, but the title company opened escrow on February 14th and we closed on the 24th – one of the fastest I’ve found so far in Oklahoma (one of the few remaining abstract states).

It was good to get some quick cash to help with marketing, confirm the value of follow-ups, and to see that the probate timeline can often be years.  Plus, I ended up with this testimonial, which not only helps my business, but is very rewarding personally:

“I want to also thank you and your group for working with me on the sale of the house in OKC. It was a pleasurable experience in a not so pleasurable time for me. The electronic filing was seamless and really helped to expedite the sale as well as the title group being on top of everything helping me to meet the close date. I wish all transactions were that easy. I would be glad to recommend you anytime for your future customers if you would like.”

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Filed under Deals, Inspections, Marketing, Probate

How to Scrub a List of Leads

What is “scrubbing”, other than cleaning tubs and toilets?

When you “scrub” a mailing list, you’re cleaning it up.  You’re getting rid of dead leads that are no longer viable, and updating leads with new information – making sure you have current contact information.

What are you looking for when scrubbing a list?

  • Properties that sold to someone else  – either an investor or a homeowner – should be removed.
  • Properties that don’t match your criteria.  For example, even though I only market to residential single- and multi-family properties, sometimes a condominium or apartment ends up on my list.  If I discover it when I’m scrubbing, I can choose to remove it.
  • Leads who have changed their mailing address.  A real estate investor’s leads move often, and having the correct mailing address is essential with direct mail.

How do you scrub a list?

If you’re doing this on your own, like I just did, then you do it painstakingly.  I went lead by lead, researching the property on the assessor’s page to confirm it hadn’t sold in the last 6 months (many had), and then cross-referenced the owner name and mailing address, updating as needed. It was not my kind of work.  But it did the job – about 40% of my old leads were no longer good.  What a waste it would have been to include them in my new mailings!

An Alternative: The Revolving Door

But, depending on your marketing strategy, you may never need to scrub your lists.

If you stick to purchasing general leads and researching targeted leads, then your leads can work like a revolving door: they go into a campaign (where you hopefully contact them at least 6 times), and then you forget about them.

For targeted leads based on an event (probate, eviction, vacants, divorce, etc.), you can research or buy leads every month and send to whomever is on the list. Be sure you schedule at least 6 follow-ups of some kind, but then you can forget that list and move on to the next list the following month.

For absentee owners, whose status remains the same for a longer amount of time, you can set up a campaign, then when your campaign ends (say, in 6 months),  you buy a new list and start all over.  The new list will leave off any leads who sold, and update the address of the ones who have moved.

Everyone does it differently, and the revolving door is just one idea.  There are a lot of factors to take into account, including how you deal with leads once they come in, what kind of database options you have available to you (less if you have a Mac), whether you want several people or just yourself to be able to access and edit it, and how much information you really think you need to track.

But my mantra for this year is something I read from Tracy Caywood: that the most effective marketing is implementation and consistency. You can’t perfect something you haven’t started yet – so let’s get to work.

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Filed under Absentee Owners, Evictions, Marketing, Planning, Probate

New Year, New Marketing Plan

Last year was a wash for me.  I switched to postcards and they performed miserably.  I struggled with a lot of personal elements in my life, and felt myself sort of go limp, like my toddler does in protest when she doesn’t want to do something.  I am a master at looking busy while doing absolutely nothing, and that sort of self-sabotage happened a lot last year (in the form of research and planning).

I don’t have a lot of regrets about last year.  Thankfully, I can have slow months or years because we don’t depend on this for our full-time income.  But we might one day.  And we also have financial obligations my business is responsible for, and my lack of diligence last year put us in a tight spot.

But we all have ups and downs, and those help with growth.  At least,they do for me.  It’s scary for me to do real estate – for all sorts of reasons – but building resolve and courage is what I’m shooting for (not for eliminating the fear).

So here’s how 2014 is looking:

My Resources

  • I still have my accountability partner.  She means more than I can probably understand, and I know of at least two times when I was actually resolved to quit but she talked me into hanging in there.  So I’m glad to have her help as I move forward this year.
  • My husband will be helping.  He’s already a big part of the business: he helps stuff envelopes when I’m behind, knows about every deal I negotiate and works out strategy with me.  But this year he’s officially coming on board to help.  He’s going to be in charge of tracking and mailing our marketing campaigns, maintaining our leads database, skiptracing, and basically anything related to data.
  • Last year I blew through the marketing reserves that had built up from previous deals. So we’re back to leaning on our Freedom Fund for all marketing costs.  A Freedom Fund is something I learned about from my friend Shae Bynes.  It’s an amount of money that comes out of our personal budget to go toward the business.  Right now we have it at $300.  Once we close on a deal, at least $1000 or more of the profit will jump start a larger marketing plan.

My Marketing Plan

  • For January, I scrubbed an existing list of Tulsa Absentee owners (by myself!) and I ended up with 101 leads.  We also scrubbed all of the probate leads I had and it whittled down to 77. They all got a yellow postcard sent through Click2Mail.
  • We created a follow up campaign so that all of these leads will automatically be sent another postcard each month for 4 months, and we created reminders to schedule 2 more rounds after the 4 months are over (Click2Mail only allows you to schedule 120 days in advance).
  • For February, we’ll research probates and create a campaign of up to 125 leads.  We send out a professional letter and create a follow up campaign of 6 yellow postcards.  (This totals about $300 – my max budget for the month.)
  • For March, we’ll see.  There’s a good chance we’ll have a deal by then.  If  so, we’ll consider implementing our $1000 marketing plan (still to be finished).  If not, we’ll probably repeat February’s plan.

It’s nice to have a plan.  Everyone tells me how important it is.  And I’m usually on board – I LOVE planning.  But implementing is more important than a good plan, so I’m excited that I’ve already touched 178 leads, and without doing any additional work they will receive 4 more postcards.

I hope you’ve had a hopeful, productive start to the year as well!

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Filed under Absentee Owners, Fear, Marketing, Planning, Probate