Using Classified Ads To Find Motivated Sellers
I just finished reading David Finkel and Peter Conti's e-book on Lease Optioning. Has anyone used their "scripts" for contacting motivated selers? Do they really work? I tried contacting a few aged classified "for sale by owner" ads yesterday and was extremely disappointed w/ the results. Every seller I spoke to was defensive (and occassionally rude) when they found out I was an investor and would not be offering them a traditional deal. I know most sellers will reject this method, so I'm not surprised I struck out, but I am surprised at the level of hostility I encountered. Is this common? This method seems extremely inefficient for finding motivated sellers...any suggestions on how to improve my hit rate? Thanks.
First, don't offer anybody anything over the phone. I would be offended too if you offered to buy my house and you never took the time to see the home. The scripts are really designed to just get to the motivation and situation of the seller, you do have to tell them in some way that you are an investor, otherwise you will have to sidestep questions or you won't match who they thought you were when you show up. The scripts are a base starting point for weeding out who to talk too and who not too.
Also before I talk to anybody or go on an appointment I put any ideas or concept of how I think the deal will go before I show up. That way once I learn the specifics and when I offer something that might be creative it seems like a custom tailored solution to thier situation.
Thanks for the response. Actually, I think the word "investor" is the problem. That's when they balk:
"Wait a second...you're an investor?? Oh, I thought you were a real buyer..."
After that, they won't even let me explain that I could provide a creative solution to their problem. They just try to hang up immediately. I don't even get a chance to explain myself. I don't want to lie to them, but I don't know how to prep them to accept creative financing w/o telling them I'm an investor.
Now your title of this thread is using classifieds. I have heard over and over that the post cards is the way to go. I was starting in L/O but these multis (buy and hold) fell in my lap. So I need to refresh my self with the whole L/O thing. But when I was learning about it, everyone said that the classifieds are so packed with ads for Rent to Own. But that could just be here. I know the guy who taught me about L/O just does post cards and he does 2 or 3 deals a month. Sounds good to me....
Voguegirl,
This is a tough part of REI. The best way is to have the sellers to call you. I use to call FSBO ads and used their script, and I did get a few homes. I did use a company that used my script, and if they passed, told the sellers to expect a call from me that evening. That way, the sellers already know when you call that you are an investor, and that you are looking to add to your portfolio, not to live in their beautiful home......Hope this helps..
Prosperous investing,
td
Well your right you don't want to waste time with someone who just doesn't want to deal with an investor.
If the seller is motivated and is in a situation to deem a creative deal then it really wont matter if you are an investor or not.
You don't really want to prep them for any deal on the phone, I do less qualifying on the phone just because it's been my experience that no matter how much info I get on the phone it changes once we sit down and have a good raport going.
Just yesterday for instance met with a seller from the classifieds who on the phone told me he only would accept a cash offer. Well long story short he is 2 payments behind, we talked for a bit worked things out and once I get verification back from the bank here in about an hour we will have worked out a subject to deal. Not a knock it out the park deal but I should have no problem filling the property.
I'm a brand new investor myself and, like you, have just finished this same book. I meticulously categorized the real estate ads, let them "age" for about 4 weeks and then bravely phoned the owners using the scripts. My experience was the same as yours. It was so painful that I hope to avoid ever making a phone call again! I must admit that immediately asking if the home they advertised was still available did take away some of the defensiveness. But once that dirty "Investor" word pops out, you can almost see them frown over the phone! I even tried rushing through that part of the sentence and getting to the "because I buy nice homes in nice neighborhoods. Can you tell me, is your house a nice house in a nice neighborhood?" but it didn't work for me either. I would also love to hear suggestions from folks who are successful at cold calls.
Happy Investing!
I read the same book, and tossed out the idea of calling aged classifieds. Talk to anyone that has their house listed FSBO and they are inundated with calls and mailers from realtors AND investors, they are getting it from both sides. If you are to call, I would stay away form the word "investor", all they need to know upfront is you are interested in their house, which is the truth.
Guys,
The cold calls are good for gaining experience and confidence. I remember a few years back, I was doing the same thing. This lady flatly told me she would never l/o her home. I politely said thanks, gave her my number, and asked could I call back in 30-45 days to make sure the home had sold. 2 months later, she called, and I still have this home on a 10 yr l/o. They are there, but they a few and far between. The best way to find motivated sellers is to have them call you from signs, flyers, business cards,etc.
Prosperous investing,
td
I'm a student of Conti/Finkel and have used the phone scripts successfully. The trick is to master the art of "the reluctant buyer" and just get the appointment without giving much detail. I never say the word investor and it rarely comes up if you position yourself well.
I have no probs getting the appt and signing up L/O's - it's the renting them out that I struggle with.
First, let me say that I think very little of Conti and Finkel. They are the classic example of "upsell" gurus. Their advise in most cases is poor at best.
That said, While having sellers call you is the best method for finding deals, cold calling is good for the newbie investor for three reasons. One, it gives you a chance to talk to actual sellers, and practice your techniques for closing the deal. Two, it gives you a chance to actually go look at real homes for sell and do walk-thrus, and talk to sellers face to face. Three, you may actually get a deal closed.
Almost all cold calling "scripts" that I've seen, plainly speaking, suck. Unless the seller is completely unrealistic in his price or manner, you main goal should be to see the property and get a face to face meeting with the seller. You cannot effectively determine motivation level by talking on the phone.
When I call FSBO, I really ask only the basic questions that almost any other buyer would ask. Depending on how they are asked, you can get alot of information from them. Questions like, how much are you asking? # of beds, baths, heated sq ft, etc? How are the schools? What's the address? and the most important question, why are you selling? It may, or may not be a truthful answer over the phone, but you'll get an idea of motivation. Of course, you'll also want to setup a viewing if you liked what you heard so far.
As you learn your market, you'll become better at knowing value, but generally, the two most important phone questions are what is the asking price? and why are you selling? These two questions can really determine a possible deal.
A seller asking $100k for a property in an $85K neighborhood is either not motivated, or completely without a clue. Either will be hard to overcome. But, if just the opposite is true, then you might have a deal, right?
If someone says they're selling because they got transferred, downsized, loss of job, found a new house, got 2 house payments, etc. well, they're a candidate. Someone says, my wife wants to move (I don't), just wanted to see if it would sell, everyone is trying to move out if this area. Doens't necessarily rule them out, but they likely either won't be too thrilled with a real creative offer, or you won't want the property anyway.
Roger
LassiterMarketing,
I'm interested to learn more about your technique. Once you get the appt, how do you get the sellers to accept the L/O deal? Don't they still want a traditional deal? Do you have a lot of wasted appts w/ sellers that won't L/O?
Raj -
how much of Conti and Finkel's material have you seen? It seems like you must have a good deal of it because this isn't the first time I've seen you give an opinion on them such as "their main strategy is L/O" and that the material is "outdated".
Thanks,
Ryan J. Schnabel
Voguegirl,
..work / farm "my area". When calling, do like "rjwarrior", get the seller's reasons for selling. IF I'M interested than I meet the seller, walk the property with my "check sheet". Pointing out ALL problems to seller . Ask again " why are you selling?" Now, at this point I have a better feel for the seller's "needs" and move accordingly with to structure a "transaction" that will be great for all concerned.
This has been my approach( alittle from all the "guru's"
MY FIRST time out I shot myself in the foot.. now I approach the sellers this way, ..IF "they" are not motivated and "IT'S" not " win / win" I say NEXT.
Just my 2 $'s worth ( and still learning)
mcldavid
Quote:
On 2004-03-05 09:54, VogueGirl wrote:
LassiterMarketing,
I'm interested to learn more about your technique. Once you get the appt, how do you get the sellers to accept the L/O deal? Don't they still want a traditional deal? Do you have a lot of wasted appts w/ sellers that won't L/O?
First I call aged for rents only. Then after looking around we sit down and I say "I'm not saying that I can do this, but if I could cover your mortgage payments in full for a period of time and cash you out at or close to your full asking price at some point in the future, is that something we should talk about or not?"
If they say yes, I continue. If they say no way, then I'm outta there.
During my initial phone conversation with them I ask if they are open to selling at the end of a successful, 3-5 year lease term. This is how I weed most before I ever get to the appointment.
I sign up 6 out of 10. Now, as I said, filling them is a different story altogether. I suck at that. I guess what I need is a partner who is an expert at filling props.
Back to the Conti/Finkel deal. I agree with Raj. Every conference has more content about their NEXT course than the one you're attending. Read books, hang out here and join your REI club. If I had it to do over that's exactly what I'd do.
most FSBO`s are looking for full price ,otherwise they would have listed with a realtor.I have had more success having sellers call me through an ad and having a answering service take the calls ,they have one script for sellers and one script for buyers. I have them ask about 7or 8 questions from either script then they fax me the filled in scripts and I see who is worth my time and who goes in the trash can . most end up in the trash ,but you get akeeper now and then and just part of one deal pay`s all my expenses, the biggest bonus though is I don`t have to talk to any of these people unless I think it`s worthwhile. stay away from cold calling >>it only gives these unmotivated sellers the upperhand from the beginning. this is just the way I do it and it seems to work .good luck 8-)
Hi LassiterMarketing
Great post. I took notes and will try it. My problem is the opposite. I always get a lot of calls on my 'rent to own' ads. I try to keep the rents fair and take a serious deposit (3 TO 5% of value). The houses go inside a few weeks. Some keep my ad and call me weeks, and sometimes months later! Keep up the posts and thanks for the ideas.
Good luck
Joe
Another way to get motivated sellers is to have a sign on your car - park it in various different busy locations.
I have had a few calls, and they say they saw the car sign. But you do need multiple ways to get the word out. Car signs, classified ads, web site, business cards, flyers etc. Plus tell everyone one you meet that you offer a finders fee for any properties they bring that you aquire too.
good luck.
[addsig]
I'm a real estate newbie that recently read Conti and Finkel's L/O approach to real estate investing.
The concept sounds good, but can anyone tell me the reality? What were your real life experiences with using their ideas, scripts, techniques?
Is their 3-day intensive training of any value? Did you try their coaching? Any luck with their Question and Answer sessions? What are the pro's/con's.
I would greatly appreciate ALL input before I plop down $5K for this course.
Chris
Sojourner, I think Conti and Finkel's info is good (I have a problem with their teasing negative 'takeaway' approach, but...). Paying big bucks for mentoring would surely jump start you, and they sure have tantalizing stories about beginners buying sleeper little condos from flight attendants (their 'bonus' website at www.fortunesinforeclosures.com has some inspiring info but is mostly geared to recruitment).
Their guy who pitched me fessed up to not owning a single property (yet), and seemed to know less than I did about investing. I kinda felt sorry for him; maybe he was working off his tuition by calling their prospects; we all have to start somewhere. Conti and Finkel do seem to be building a small empire, but experiences can be deceiving and, like all gurus, I wonder they're not just quietly investing if they're so smart. I guess for some the payoff is fame or notoriety. Their names do get dropped a lot here.
Gurus always claim that you can shave years off of the learning curve by watching the pros in action and making deals under their watchful eye, and it may be so. Some of their methods are surely applicable to your area. But ultimately, you've got to study your own market, prepare your paperwork, ask questions (on this site, of course) make the contacts, advertise, learn the ropes, and most of all figure out your own parameters and thresholds involving time, frustration, comfort, profit, risk, excitement, etc. Plus that $5k (not to mention the $25k for those Hawa'ii junkets!) could go a long way towards making your first few deals fly!
loon, Thanks for the feedback. I'm always skeptical about self-proclaimed gurus. I agree with yout that if (when) I were as good as they claim they are, then I would likely be out there quietly amassing a huge pile of dough. The optomistic part of me says that maybe they are sincere in "giving back" by helping others. Not sure if the cynic, the realist or the optomist will win this $64K question.
Thanks again.
Lassiter,
I love your approach when talking with the seller. That's great. I also agree with Raj. I don't feel any one needs to know that you're an investor over the phone. We're just calling to find out about the property - and to find out if they're motivated. I think the word investor construes a lawyer type person in a 3 piece suit trying to swindle people out of their money. Once the seller sees you in person and realizes you're not a threat, they'll be more at ease.
I guess my question to you would be How do you get sellers to commit to subleasing their properties without balking? I think once you tell them that you're not going to be the one renting don't they run?
Thanks
Robert
During my initial phone conversation with them I ask if they are open to selling at the end of a successful, 3-5 year lease term. This is how I weed most before I ever get to the appointment...............................................................believe it or not, that's one of the most informative suggestions that I have read....................thanks! 8-)
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There are admirable potentialities in every human being. Believe in your strength and your youth. Learn to repeat endlessly to yourself, 'It all depends on me.'
Andre Gide (1869 - 1951)[ Edited by CQQL on Date 03/31/2004 ]