Marketing For Tenant Buyers
Marketing For Tenant BuyersFinding Tenant BuyersThere are three different ways you can work with tenant buyers. 1. You can find tenant buyers first, and then find a home that meets their needs. 2. You can look for tenant buyers for a home that you already control. 3. You can consult with a tenant buyer and you can show a tenant buyer how to find their own rent to own home with little or no money down. I am going to start with my favorite method of connecting buyers and sellers, using a concept I refined called the home finder program. In a nutshell, tenant buyers call your home office wanting to know more about the rent to own program. After you qualify the prospect for a down payment and monthly rent range, you tell them about how you can find them a home that will meet their needs. We charge a nominal processing fee to get them enrolled so that we know we are dealing with serious tenant buyers. Then we find a property within our tenant buyer’s criteria. ___________________________________________________________________________ Not bad! Here is how we enroll our tenant buyers into our home finder program. 1. Run great rent to own ads to attract buyers. These ads can describe the program with- out any property, an ad for a home that you currently control or controlled, or you could always run an ad with a fictitious property. I always like to tell the truth to my tenant buyers, so if they call on a fictitious prop erty, I let them know we do it to advertise for the program, and if they are interested I tell them more. 2. Prequalify your tenant buyer to see what they have available for up front option money. I would not consider enrolling anybody into the program who has less then half of what you want to collect as an option fee. For example, if they want a home with a price of $200,000 and you plan on collecting a $6500 option fee, make sure they have at least $3000-$3500 in the bank before proceeding. 3. Charge your tenant buyer a processing fee to enroll in the home finder program. You can charge anything you want. I have seen some of my students charge up to $10,000. However, I like to keep my fees extremely reasonable. I want to screen out buyers who will waste my time, but I don’t like to scare away good tenant buyers either. I suggest a nominal processing fee of $29. Don’t let me stop you if you want to charge more. 4. Have the tenant buyer fill out the “home finder form” in your materials, and collect payment via check, credit or debit card. Don’t be scared to take a payment right over the phone. 5. Lock up the property with the seller. 6. Call the people enrolled in your home finder program first and give them first crack at the home, and then send it out to the rest of your tenant buyer database. 7. If then tenant buyer loves the home, col- lect payment. If they don’t have the full op- tion payment you would like, consider tak- ing a portion down and financing the rest in a monthly payment plan. 8. If they don’t love the home, market the property using strategies I talk about later in this manual. 9. Consider making your processing fee refundable if you are not able to locate a home for the tenant buyer in 90 days. However, it’s your choice. This is great. You now have additional money to market for motivated sellers. In addition, you will be in a stronger negotiating position when talking with a seller when you already have a tenant buyer who is ready and waiting to move into a home. ____________________________________________________________________ Finding Tenant Buyers, Sample Ads Rent to Own: 2 bed/2.5 Bath Townhome, Ga- rage, Private Patio, Fireplace, $1495/MO 100% rent credit! Call 24 hr Rec. Msg (866) Rancho San Diego 2 bed/2.5 bath Town- home. Gar., Pri- vate patio, Fireplace, $1495/Mo, 100% rent credit, Dwn Pymt assistance Tired of Renting from your landlord? Rent to Own! All areas and price ranges. No banks. No Qualifying. 50% Rent Credit! (866) 555- No Banks No Qualify- ing. Rent to Own 3/2 50% rent credit. $1695 Mo Call (866) 555-1212 Rent to Own 3/2 $1995 Mo 50% Rent Credit (866) 555-1212 Rent to own homes. All areas, all prices ranges. Low Down, huge rent credits, price protection (866) 555-1212 Are you tired of renting? Would you like to own your own home without all of the hassles of banks and qualifying? You have come to the right place. We have beautiful homes in all areas and price ranges. We also offer a generous credit of your rent towards the purchase of your new home. If you would like to learn how you can stop making your landlord rich and enjoy all of the benefits of ownership, then click here or call us (619) xxx-xxxx You can also visit our website at www.yourwebsite.com. Thanks for your interest and have a fantastic day. ____________________________________________________________________________ Finding Tenant Buyers, More Sample AdsHere is a different ad I use on craigslist to make my ad stand out. And another: If you are thinking this last ad is ridiculous, consider this. This last ad outperforms my other ads 2:1. Think about it; people who can’t qualify for a loan are not looking for the same old realtor ads. As people contact you about your rent to own program, remember to put them in your data- base and send them out some information. I put out a publication called the “Rent to Own Reader”©. It tells them all of the features and benefits of renting to own without my having to take the precious time to do it myself. It will also direct them to my website where they can get even more information and enroll in the home finder program online. Put together a newsletter or, just as effective, a tri-fold brochure that you can get from your local print shop or vistaprint.com. ________________________________________________________________________ Following Your Leads Okay, we have a wonderful property we have just locked up on a lease purchase contract. Now what do we do? First we call the people in our home finder program, then we call or send emails to people in our database. If you don’t find a taker, it’s time to energize your marketing powerhouse! You are going to use cutting edge methods to market your property. In addition, you will also fatten up your buyers list from people who call you on properties you already control. Here is a list of of marketing strategies to get your home filled in record time. I would consider implementing them in the order they are listed here. 1. Within 24 hours, I would get a “Rent to Own” sign in front of the home. It should have a phone number that goes to a 24-hour recorded message with the ability to take messages. (See the form at the back of this course.) You can have a sign made at your local sign shop. Just make sure it’s big and gaudy. It should say the words, “Rent to Own.” It should not look like a realtor sign. I put it on a stake or in the front window of the property. Attach a flyer box with infor- mation about all the great benefits of the property. Do this within 24 to 48 hours of locking up the property. 2. Send the info on the property to your database via email or phone calls. Do this within 72 hours of locking up the deal. 3. Get your property out on craigslist or backpage. Consider other websites such as www.irentoown.com and www.ownerwill- carry.com. Post your properties as often as these websites will allow. 4. Within the first week of locking up the deal, place 20 road or “bandit” signs on the side of the road. This will be your best form of advertising. You can use Coroplast (the plastic sheets that look like corrugated cardboard), or you can use poster board from your local office supply store. I like to use wooden stakes that you can get from your local home improvement centers. Put these out every week and have the calls go to your 24-hour recorded message. Be sure to check your local city ordinances on plac- ing signs. These should go in busy intersec- tions and exit freeway ramps. If you see a neighbor with great traffic, ask him if you can put a sign in his yard for a small rental fee. Offer him $5 a day on Saturdays and Sundays. Remove the sign from the neigh- bors’ yards at the end of the weekend. Do not even consider picking up your signs at the end of the week. You want these out all week, and trying to save a few bucks by collecting signs is a waste of time. You want these signs out always. Here is my general rule of thumb when placing signs. If I don’t get at least one angry phone call about my signs, I know I haven’t put out enough. 5. If you haven’t filled the property within 14 days, put your listing on eBay under “houses for sale.” Just make sure to high- light that your property is a “rent to own” property. 6. Optional: Place an ad for your proper- ty in the newspaper under the “for sale,” “for rent,” or the “rent to own” section of the newspaper, if it is available. However, I have found that the return on investment in the newspaper is not as great as the other methods I mention above. If the potential profits from the deal warrant your full mar- keting efforts, consider a newspaper ad. _________________________________________________________________________ Mortgage Brokers and Realtors Mortgage brokers and a good buyer’s agent are great sources of tenant buyers. Do you think these professionals ever run into people who don’t qualify for loans? You betcha! I would approach these professionals and tell them what you do. Offer them generous referral fees and follow up. Be certain to include these professionals in your database. Two things will increase your success. 1. Whenever you get a lead that does not result in a payout for your re- ferral, send a thank you card with a small gift, like a $5 Starbucks card. You don’t need to send a gift card, but it is always a nice touch. 2. Put them on your mailing list and constantly remind them of what you do. Out of sight, out of mind. I have included two examples of follow up letters. One letter targets an individual who would like a referral fee and another targets those who would rather just accept a “thank you.” For example, an attorney who sends a referral may think that taking payment from you may be a conflict of interest. In these instances, we just send follow-up letters and thank you cards. Bonus Marketing Source: Send out a mailer or place flyers on the front doors of the homes in the neighborhood of the property you control. Let all of your neighbors know about your rent to own property. Offer them a referral fee or some kind of monetary gift. Go with what is hot and what people want. Sometimes other incentives are more sexy than cash. ___________________________________________________________________________ Take a look at the examples on the following pages Mortgage Brokers and Realtors, Sample Letters Your Company, Address and Ph and email Dear ___________ It was a pleasure speaking with you the other day regarding your (insert brokerage, practice, client base). I am looking forward to offering your clients a win-win solution to their real estate challenges. I will treat your clients with the utmost respect and integrity. In addition, I have attached a copy of a letter from one of my satisfied clients. As a reminder, we can work with anybody who is looking to sell their home that can be flexible on the terms. For example: they are willing to lease the property for a period of time, and then sell during or at the end of the lease. If you know of one of your clients who would like to get into a home, but cannot qualify for a loan, we can also help them. If you have any questions, please feel free to call me at (619) 464-2232 or you can visit my website at www.yourwebsite.com. Sincerely, Your Name Your Company ——————————————- Mortgage Brokers and Realtors, Sample Letters Your Company, Address and Ph and email Dear ______________________________ It was a pleasure speaking with you the other day regarding your (insert brokerage, practice, client base). As we discussed, I will be glad to send you a 25% referral fee of any money I earn on a lease purchase transaction from one of your referrals. I will treat your clients with the utmost respect and integrity. I have also attached a copy of a letter from one of my satisfied clients. As a reminder, we can work with anybody who is looking to sell their home that can be flexible on the terms. For example: they are willing to lease the property for a period of time, and then sell during or at the end of the lease. If you know of one of your clients who would like to get into a home, but cannot qualify for a loan, we can also help them. If you have any questions, please feel free to call me at (619) 464-2232 or you can visit my website at www.yourwebsite.com. Sincerely, Your Name Your Company ————————————————————– Sample Ad $500 Gas card to find your new neighbor! Rent to Own Spring Valley Home Beautiful 3 Bedroom, 2 bath with front and back yard, Brand new updated kitchen, brand new appliances, 2 car garage, and all in a great family neighborhood! NO BANKS! NO QUALIFYING! NO HASSLES! • Simple-No banks or loan qualification • Stop throwing away rent- up to 100% Rent Credit Available! • Credit is not an issue. Free Credit Repair Available. To Find Out how You can own this Home Call 24 Hr. recorded Message: xxx-xxx-xxxx Only $1595 a month ————————————————————- Tenant Buyers, Sample Letter Here is another example of a marketing piece that we send out to tenant buyers. The Rent to Own Solution! O.K. lets dream for a second. What if you and your family could move into your dream home today without having a large down payment? What if you could tell your Landlord that you are going to start funding your child’s college education instead of his retirement? What if you could stop throwing away your rent money and have it actually credited to- wards the purchase price of a new home? What if you could move into a house and “try it” before you “buy it?” Stop Imagining! The time has come to discover the rent to own solution. Rent to own, AKA Lease Purchase, is THE way to get into a home with a small up front payment that is applied 100% toward the purchase price of your home. In addition, you can have a large portion of your rent actually going towards equity in your home. Try asking your Landlord for that! Most rent to own agreements are for a pre-set term where you can lock in the purchase price today and can buy anytime during the lease. You can shop around for the best loan, clean up your credit, “try out” the house, and decide on any improvements before you make the purchase. Any improvements that you make and any appreciation in the price of the home are yours to keep if and when you purchase the property. With uncertain times, renting to own will give you total flexibility. You will have the right to buy the property with large rent credits and a locked-in price. However, you are not obligated to purchase! The choice is up to you! Don’t forget to ask your local lease purchase specialist about different financing options on the up-front payment and a price protection guarantee! -Your Name Lease Purchase Specialist ____________________________________________ Craigslist and Backpage Ads Hello, and thank you for inquiring about the rent to own home on 123 Main Street. Perfect credit and bank qualification is not necessary. Just one of the homes that we have available is a 2 Bedroom, 1 Bath home nestled in Mission Valley. This home has a cozy kitchen, a spacious floor pan, and is located close to Fashion Valley Mall. The rent for this home is $1795 a month and 50% of your monthly rent will be credited towards the purchase of this home. To find out more info about this home, click here to immediately contact us. Feel free to browse the website afterwards as there are additional pictures of the property and other properties that we may have in your price range. Thanks for looking and have a great day! If you don’t like this home or this is out of your price range, we also have a consulting service where we could show you how to find your own rent to own home with great terms (with no bank qualifying). Also with this home is the Price Protection Guarantee! You will be protected if the value of your home drops during your rent to own agreement! ________________________________________________ Rent-to-Own Signs I would not put out signs unless you have a property. I would put one in front of the property and the cheap Coroplast signs around the property. The signs on the side of the road should look cheap and homemade. _________________________________________________ Rent to Own Flyers You can use generic flyers like this one: Mt. Helix Dream Home Beautiful 5 Bedroom, 5 bath with Granny Studio. Completely remodeled with new appliances and a pool. Lots of space, Huge Kitchen, Stunning Views, safe and quiet in one of San Diego’s most desirable neighborhoods. This home is in an award winning School District. Rent to own this Amazing Home today! • No Banks! No Credit Checks! • Stop making your landlord rich- 50% Rent Credit • Down Payment assistance available Call 24 Hr. recorded Message: 866-202-xxxx Ext xx ————————————————————————-- Rent to Own Flyers Are you tired of making you landlord rich? Stop Renting! It’s time to Discover Rent to Own -You can go into your home with no banks and no qualify- ing - Low Down Payments - All price ranges and areas Rent to own an amazing Home today! • No Banks! No Credit Checks! • Stop making your landlord rich- 50% Rent Credit • Down Payment assistance available To find out more call or visit our website for a free newsletter: Call 24 Hr. recorded Message: 866-202-xxxx X22 www.yourwebsite.com ————————————————————————- Getting a Tenant Buyer Okay, the phone (or your voice- mail) is ringing off the hook with tenant buyers. How do we get these people to give us a check? There are two schools of thought when it comes to finding tenant buyers. You always want to create a sense of urgency and com- petition with your buyers. The first method I use, I have nicknamed “The Feeding Frenzy Group Appointment.” In this method, we conveniently get several groups of people to see the property at the same time. This urgency and excitement will increase the likelihood that somebody will take action the first time they see the property. It is amazing how much people want something when they feel like somebody else is going to get it. Let’s look at an example. Did you ever have a girlfriend or boyfriend that you broke up with? What happened when they started to date somebody else? Admit it, you kind of wanted them back, right? Even if the relationship was completely dys- functional, something inside you just couldn’t stand the thought of somebody else taking what you had. The same theory applies to a home. Here are the steps we take to get a mega-feeding frenzy at the home. Step 1 Market the property using the methods previously described. Step 2 Have all calls go to a 24-hour recorded message. Step 3 First, make an appointment with the person who has the most money. Do not call this an open house or a showing. If you make “an appointment,” they will feel obligated to show up; if you set up an open house or a showing they will show up any ol’ time they want or not at all. Step 4 Call everybody else regardless of how much money they have. Set appointments for the same time that you did with the orig- inal tenant buyer. Step 5 Confirm with everybody the morning of the appointment. Step 6 Arrive 15 minutes early to make sure the property is clean, bright, and smells good. Use scented products to cover up nor- mal “home smells.” Step 7 Have a sign-in sheet with name, phone number, email, and down payment to work with. Pre-sign in the person with the most money with the amount of down payment they have. Other tenant buyers will see this and try to out-do the other tenant buyers. Step 8 Tenant buyers will tour property. Give those ready to do business an application and charge an application fee. Step 9 Collect a deposit. This should be as much as you can get, but should be a minimum of $1,000. I have collected as much as $30,000 on the first appointment. Don’t flinch when talking about money, and people will trust you. You are trustworthy, so don’t be scared to take their money. Collect multiple de- posits if possible and cash checks right away – the same day if possible. Step 10 Check credit using services such as National Association of Independent Landlords or verirent.com. Step 11 Select the tenant buyer you desire. Call the tenant buyer, congratulate them, and collect the rest of the option money within 48 hours. Once you get the rest of the option money, re- turn the deposits of the tenant buyers who were not selected. Enroll the other tenant buyers who applied in the home finder program. ________________________________________________________ 24 Hour Message Here is the script I would use on my 24-hour recorded message. Hello, and thank you for inquiring about the rent to own home on 123 Main Street. Perfect credit and bank qualification are not necessary. Just one of the homes that we have available is a 3 bedroom/2 bath home nestled in one of Springfield’s most desirable neighborhoods. This home has a cozy kitchen, a spacious floor pan, and is located close to Center Town Mall. You can stop throwing away your rent money because 50% of your rent will be credited towards the purchase of your new home. Optional: This home comes with our price protection guarantee. To protect you from this ever-changing real estate market. To find out more about this home and renting to own your own home, please leave your name, phone number, and the down payment you have available and we will call you back. Remember to leave your name, number and the down payment you have available. Thanks for calling. _______________________________________________________________________ Making the Appointment Call everybody else back and do the same thing. Call the people back with the most money first and work your way down from there As you can see, this method is very effective. However, there is one disadvantage, which is that you have to leave your desk. The second method, the DDD method (Doing Deals from your Desk), works well if you are working in another part of the country or you just don’t like to leave your desk. Here are the steps to market the property from your home office Step 1 Market the property using the methods I describe above. Step 2 Have all calls go to a 24-hour recorded message Step 3 Call back people who have a down payment and have them drive by the property. Try not to get into the program too much as this can be a waste of time if they have not seen the property. Tell them if they love the property, they should call you back. Step 4 For the people who have done a drive by and have the cash you want, explain the program. You should have a “lock box” at the property with a key. Step 5 You should have pictures of the property on your website or have them available through email. Have the tenant buyer fill out an application with a $29 application fee. Use Paypal to take credit cards or get a merchant account so you don’t have to wait for a check. If somebody won’t give you an application fee after driving by the outside and seeing pictures, they are not serious. Don’t give out the key box info to looky-loos. Step 6 Give them the code to the lock box and have them go look at the property. Step 7 If they want the property collect a deposit ASAP. Step 8 Check credit and accept or reject. Usually the amount of money my tenant buyer has greatly influences my decision A great lock box for a great price is SHURLOK. Check them out on eBay for less then $15 a piece. I don’t even go pick up the lock boxes after I move a property. I prefer the feeding frenzy method, but if you are a decent driving distance from the property, or you just have a lot of properties, the DDD method is also highly effective. ____________________________________________________ CASH FLOW and Sales Negotiation Strategies There is a reason thousands of people go to real estate seminars every year and very few become successful investors. The problem most new investors experience is they have no formal education on sales and negotiation. I don’t know about you, but I sure don’t remem- ber taking any classes on sales and negotiation in high school or college. I don’t care what industry you are in, learning how to sell and negotiate more effectively will only increase your income and quality of life. In college I worked for my dad selling sales incentives to car dealerships. There was no handout; he paid me 100% commission. I “ate what I killed,” and if I didn’t sell, I didn’t eat. I saw the power of effective negotiating and sales. I made more during my senior year in college, working part-time, than most of my friends did after they graduated. Did you know that the top 20% of salespeople in this country make more than the other 80% combined? It’s true, and there is a method to the madness. The key is to have a system that works and makes you feel great while you are selling and negotiating every day. You should practice every day, trying to get better with every phone call, seller meeting, vendor negotiation, or when trying to collect a check from a tenant buyer. I am going to introduce you to my CASH FLOW negotiation and sales system. I refined concepts and ideas I learned over the years. Anybody interested in making more money should consider mastering the principles in these written course materials. The philosophy behind the cash flow is simple 1. Make a great living 2. Do this in a way to maximize your time and energy 3. Negotiation and selling should be an enjoyable activity for you The CASH flow negotiation and sales system is an acronym. Calling. Yes, you must get on the phone to make it happen! A Ask Questions. Control the negotiation! Sorry, I can’t see us doing business today- qualify your prospects before spending any real time with them. Have fun. Floor your prospect with your honesty. Laugh at yourself. O Open your ears. W Work smart! ________________________________________________________________________ Calling Here is an example of an excited new lease purchase investor who has just returned from XYZ seminar: New Investor: Hi, Mr. Seller. I want to do a lease purchase on your home. Seller: Well, I am not sure I want to sell my property. New Investor: A lease purchase is a great deal for you. I can get you a great price for your home and outstanding rent. Seller: What is the lease purchase thing about? New investor: Well, I could lease your home for three years. (Investor goes on for four or five minutes. New investor spends a ton of time giving out free information.) Seller: I would have to think about it. New Investor: Well, your home is vacant and you better do something soon. This lease purchase is a really good deal for you! (New investor goes on for another ten minutes.) Seller: I’ll think about it and call you next week if I am interested. New Investor: Okay, I’ll be waiting by the phone. How do you think our lease purchase investor feels? I’ll tell you how he feels. He feels like he got trampled on by the school bully. Would you want to go back to work letting people walk all over you all day? I don’t know about you, but this method is not for me. It’s time to implement the CASH FLOW negotiation and sales system. The first letter in the CASH flow acronym is “C” which stands for Calling. I know it sounds simplistic, but most people are scared to pick up the telephone. Don’t worry. After a little practice with these strategies, picking up the phone will be a blast Although getting on the telephone is my favorite way to generate business, this represents the need to supercharge all of your marketing. You can be the best negotiator and sales person in the world, but with- out prospects, your business is dead. Email, send letters, network, use internet marketing, or buy creative advertising. However, if you want to do business today, you have got to get on the telephone. _____________________________________________________ Asking Questions The next principle in the CASH FLOW system system is Asking Questions. When you get on the phone, your motivated sellers and tenant buyers will be eating up your precious time and energy even before you have any idea if they are capable of doing business with you. Do they have a pressing reason to sell or buy a property? Do they have a down payment? Do other people need to be involved in the decision? What is the time frame for making the decision? Is the deal even worth the time? Can you actually help this client? All of these questions must be answered before you spend any real time with a client. When talking to prospects, find out their needs and find out if they have the ability and willingness to do business with you today. I don’t care whether you are talking with a tenant buyer, seller, investor, vendor, or your mother-in-law. Ask questions first. If a prospect tries to get a ton of information from you by asking questions, control the flow of the conversation by responding with a question. Let’s take an example: Motivated Seller: How much could you give me for my property? Investor: I am not even sure I want to buy this property, sir. Do you mind if I ask you a few more questions? Do you see how I pointed the seller in the direction I wanted to go? I don’t spend time negoti- ating until I have the information I want and need in order to decide if this is a viable prospect or a time waster. Let’s take one more example: Tenant Buyer: Can you tell me about the home that you have on 123 Main street? Investor: I would love to, but first do you mind if I ask you why you are looking to get into a rent to own home? Again, before going into presentation mode, I need to find out more info about the people we will be doing business with. “Sorry, I just can’t do business with you today.” The next principle in our sales strategy is “S” which stands for “Sorry, I just can’t do business with you today. I love this principle. Why? Because it gives us “walk away” power. When we ask prospective questions, we need to find something out right away. Does this person have the ability to do business with us today, and is this person willing to make a decision today or, at the very least, in a pre-determined amount of time? If the answer is “not yet” to both of these questions, then it’s time to get off the phone. Don’t be scared to tell a prospect, “Sorry, I just can’t do business with you today.” This is starting to get fun. Let’s take two examples: Tenant Buyer: Wow, I love the home on 400 Maple Drive. We want the home. Can you show me the home? (He’ll probably arrive 20 minutes late or not show up at all). Smart Investor: I would love for you to see the inside of the home. Sir, do you mind if I ask you how much money you have as an up-front payment? Tenant Buyer: I have plenty. Smart Investor: How much is plenty? Tenant Buyer: Like a $1,000 dollars. Smart Investor: This home requires at least $6,000 down. Could you put the rest on a credit card or borrow it? Tenant Buyer: Maybe. Can I see the home first? Smart Investor: Why don’t you see if you can come up with cash first, and then call me. If you’re interested, we have a consulting program which may fit within your budget. Motivated Seller: Why don’t you write up a proposal and send it to me? I’ll think about it and get back to you. Smart Investor: Sorry, we don’t do business that way. If you like, I can write up a proposal and charge you $500. Motivated Seller: What? You can do that? Smart Investor: Well, do you want a written proposal or are you serious about doing business? If it’s not a fit, let just shake hands and say it’s not a fit. Sound fair? Look how I direct everything. I am not begging for business and I am getting to the point very quickly. Sorry, you just can’t do business with everyone. I love this stuff! Have fun! The next principle is the “H” which stands for “Have fun.” If you can’t tell already, I have a ball when I talk to prospects. Say, do, and ask things that other people would never dare to, and you can have a bank account that will exceed your wildest dreams. You will make mistakes, and it’s okay to laugh at yourself. You will go on appointments that you should not have gone on. Learn from them and move on. Although most prospects are extremely nice, some are rude. Don’t let anybody treat you like their personal punching bag. Life is too short! And it will cost you money! Get off the phone or cut off communication immediately with anybody who is playing games or trying to be adversarial. Here is a sample of an actual call I got yesterday. Tenant Buyer: I want the home, but I only want to put down $5,000, not $10,000. Smart Investor: If I did take the $5,000 down, can we do this deal today? Tenant Buyer: Well, I want you to lower the price, and then I want to have my uncle, who is a real estate agent, analyze the deal. Smart Investor: Great! Tell your uncle it’s $10,000 down Tenant Buyer: I thought you said $5,000. Smart Investor: I suggested I would consider it if you were willing to deal today. I don’t have time to play games. Are you in or out? Tenant buyer: I’m in, but I have to go to the bank. Smart Investor: Do you have a debit card on you? Tenant Buyer: Yup! Smart Investor: Great! We can take that without you having to go to the bank! Congratulations! You’re a tenant buyer. ——————————————————————————————- Motivated Seller: I heard you consult on lease purchase properties. I have a home I would like some help with. I don’t want to pay anybody, I just want to ask you a few questions. Smart Investor: Well, sir, the cost for the consultation is $2500. How does that fit within your goals and budget? Motivated Seller: No way! That is a rip off! Who the heck would pay that? Smart Investor: Alright, I’ll give you a special price. $2900. Motivated Seller: That is more than $2500! How dare you! Do you treat all of your potential clients this way? Motivated seller: Nope, just the ones who don’t respect my knowledge and time enough to compensate me for my services. Have a nice day, sir. Goodbye. Floor your prospect with honesty Don’t play games with sellers. Let them know what you are up to and they will respect you. You are in business to make a profit. Once you let them know this, they will appreciate your position. They will be less suspicious and they will know you have no emotion regarding the property. It’s purely numbers, and they will respect the fact that you will need to make a profit to make the deal work Let’s do a quick role play: Motivated Seller: I need $10,000 option money from you to do this lease purchase deal. Smart Investor: I can’t get you that much because I will probably collect the same from my tenant buyer. I have to make at least $8,000 to make this deal worth my time. Motivated Seller: Could you get me $2,000? Smart Investor: Are we ready to do this deal today? Motivated Seller: Maybe I could. Smart Investor: Well, is it a yes or no? I don’t have time for a maybe here. Motivated Seller: Okay. See how easy it was? I just let them know I need to make a profit. It will either work or it won’t. Simple as that. Open your Ears! This is simple. Open your ears and listen to your prospects’ needs. Take notes while they speak and your prospects will appreciate your efforts. Listen to their problems, (not their life story), and come up with a win-win solution. Take a look how I offer a solution. Smart Investor: Would you be interested in doing a rent to own? Motivated seller: I don’t know what I want to do. I got this property from our parents and now my siblings won’t leave me alone about the property. They call me every day about this thing and I just don’t want to deal with them. Smart Investor: So if I am hearing you correctly, you want to handle this property while getting your siblings off your back. You also don’t really want to deal with them anymore, correct? Motivated Seller: That’s about it Smart Investor: Why don’t we get them all on a conference call? I will do all the talk- ing and deal with all of your siblings. We will find out if we can handle this once and for all for you. How does that sound? Motivated Seller: Finally! Somebody who listens to me. You will be amazed at what you can accomplish when you tailor-make solutions. One size does not fill all. Work Smart Have a database, market like heck, listen to people, give tailor-made solutions and have fun. Spend time with people who have the desire and the ability to put together a deal today. If somebody needs to think about putting together a deal, fine. Get off the phone or get out of the negotiation and move on to your next prospect. The person with the check or contract is waiting for you. Spend time with those who will make you money. Treat your prospects who commit like gold, and move on from those who don’t have the ability or desire to do business with you. There you go – my CASH FLOW sales and negotiation strategy in a nutshell. This technique is one of the cornerstones of our one-on-one mentoring program. Master these concepts and you can create the lifestyle you desire, whether it’s a house on the beach, a two-year mission trip to Honduras, or paying for your kids’ college education CASH FLOW in Action You now have a great sales and negotiation philosophy that you can put into practice. I am now going to show you how to implement it in an actual deal with the motivated seller. While marketing for motivated sellers, you will find three kinds of people: A. Those who are not interested in doing business. B. Those who want more information but are not ready to make a decision. C. Those who are ready to put a deal together today. You should get off the phone with people who are not interested in doing business right away. Your initial phone conversation may be 1-2 minutes at the most. Don’t try to convince anybody who doesn’t want to be convinced. When you find a motivated seller, you will know it. ________________________________________________________________________ CASH FLOW IN ACTION: Seller: I am not sure if I want to sell the property. Investor: Okay sir, have a great day. The next group is the people who want more information. These are the most dangerous prospects because they will keep you on the phone forever and turn you into a walking brochure. You charge money for consulting with sellers, so don’t do it for free here. If somebody won’t commit to doing business with you in the next day or so, be polite, get off the phone, put them in your database, and mail them out some info. If they get “ripe” enough they will call you back. You can call these people back later if you have time, but don’t beg for the business Use your CASH FLOW sales and negotiation system ____________________________________________________________________________ CASH FLOW IN ACTION: Investor: Sir, I am not sure if we could make the numbers work, but if we could come together, could we put a deal together in the next day or so? Seller: I don’t know, I would have to talk to my husband. Can you tell me how you will find a tenant buyer? Investor: I’ll tell you what, ma’am. I can send you some information, and you can also go to my website when your husband comes home. You guys can call me later. I have an opening at 2:15 p.m. tomorrow. How does that work? Seller: Great, talk to you then. The final group is our kind of people. These people are ready to do a deal today, or at the very least, in the next couple of days. You can spend more time on the phone with these people after you have qualified them. Once we do spend some more time with them, you can talk some preliminary numbers. Don’t drive out to the property unless the seller is willing to move forward. I define this as signing agreements on the first visit to the property. Investor: Sir, if I had a tenant buyer who was ready to move into your property, and would help cover your payments in the amount we discussed, what would you like to see our next move be? Seller: I don’t know, you tell me. Investor: I guess we could do the paperwork, but I am not sure if we are taking on any more houses this week. Let me check my schedule….I guess we could take you on, but we don’t have time to waste. Is your wife going to be at our appointment? Seller: Yes, she will be there. Investor: Great! In the interest of time, I would like to have an understanding between us before I come out to the property. If this deal works for both of us, I want to be able to move forward. If it doesn’t work, that’s okay too, but I would rather know this up front. What I don’t want to see happen is for us to walk away without a firm idea of where we stand. Sir, can we agree that if I come out to the property that we will either move forward at our appointment, or if the deal is not a fit, we can shake hands and walk away? Sound fair? Seller: That sounds fair. See you at 6 p.m. Alright, we are on our way to our appointment. Once you get going, you can even fax your contracts over. However, you will get a much higher closing ratio when you go out to the property. DO NOT HAVE A FRIEND OR FAMILY MEMBER OF THE SELLER SHOW YOU THE PROPERTY. THIS IS A COLOSSAL WASTE OF TIME. At this point you should know what your strategy is going to be (Sandwich, Teamwork Assignment, Cash, Option, Coaching, etc..). Have all of your contracts in your bag or briefcase just in case you decide to switch strategies. You do not need to have the contracts filled out before you go. Once you get to the home, reconfirm that all parties on title are present. In some states a spouse is technically on title even if the title has only one person’s name on it. Step 1. Build some rapport with the sellers. You don’t need to hear about uncle Harry’s dog’s gastric bypass, but you should get to know the sellers a bit. Ask some questions, get to know them, let them get to know you. After all, you will probably be doing business. Be genuine, but don’t spend a ton of time. I would say 3-5 minutes is appropriate. __________________________________________________________________________ WARNING: Don’t try to build rapport with people over the telephone before you have qualified them. This will be a waste of time. Step 2. Make the seller feel pain. No, this is not the latest World Wrestling Federation promo. Make sure the seller is feeling all of his pains about the property. You are getting to know the seller’s needs and getting him or her to repeat them many times. By the end of this step, they should be starting to really get excited about doing a deal with you. Investor: Wow! This is a nice property, sir! I am sure if you just left it on the market, you would probably get an offer. You can probably hold out for another six months or so, can’t you? Seller: No, I can’t. My job transfer was last month and my wife is already out of state. These double payment are killing us. Investor: Hmmm…well, I am sure you could rent the place, right? This is a nice house, and you could probably get a tenant to rent it from you while you are out of state. Seller: I guess I could do that, but I don’t want a tenant to ruin my place and I don’t want to have to deal with repairs while I am across the country. I need to take care of this today! Investor: Wow! You need to take care of this today? Okay, let’s see if we can possibly pull this together. This may be a tough one, but I’ll try. Do you see how we have the seller motivated to do a deal today? Step 3: __________________________________________________________________________ CASH FLOW LEAD TRACKER IMPLEMENTATION: You should be taking notes on the cash flow lead tracker and know all the information on the homes. You should know the seller’s needs by asking questions during the rapport and “pain” process. At this point, you formulate an offer with the seller. My favorite way to do this is to have a pad. We negotiate the rent, price, term, and option money. If I am doing a sublet deal, I never bring up option money. If I am doing a teamwork assignment deal, I explain my minimum fee and how it will be credited towards the option money. Every 15-20 minutes, revert back to step 2: “Pain.” Keep the seller’s eye on the prize. Investor: Sir, so if could get you close to your asking price of $200,000 and get you $1700 a month for payments, that probably wouldn’t be a fit for you, huh? Seller: No, that would be great. That would work for us. Investor: Are you sure? Don’t you want to wait a couple of months to see if you get a cash offer? You can probably handle the payments for two or three more months can’t you Seller: No, I can’t. I have to take care of this today. Investor: Alright, how do you suggest we proceed then? Sellers: Didn’t you mention paperwork earlier on the phone? Investor: Oh yes, are we ready to get the paperwork done? Sellers: Let’s go! _______________________________________________________________________ Millionaire Tip If the seller starts saying he can hold out for his price or rent, you may be on an appointment you shouldn’t be on. Quickly clarify and, if you were wrong, cut your losses and bounce out of there while you can still make it home for supper. Sometimes, people will invite you over be- cause they are interested in doings these deals themselves. Watch out for the warning signs, like asking you where you find your tenant buyers, how you structure your deals, wanting you to leave behind you con- tracts With these people, offer to coach, but don’t give away the information you paid for. |
What to Tell Buyers
Scripts to Use
Here is the script we use when calling people back using the group showing feeding frenzy method.
Investor: Hello, this is _____________________. You had called about the rent to own home. Tenant Buyer: Oh yes, I saw your sign on the side of the road Investor: Wow, I have had a lot of calls on this thing today. Would you like to see it? Tenant Buyer: Yes I would. Can you tell me about the program Investor: I would but the program is so flexible I can’t give you exact numbers if you haven’t seen the property, and I don’t have the time unless you love it. Let’s see, I am really busy, but I could probably show you the property around… hmmm…let’s see 4:30 p.m. Friday. Does that work? Tenant Buyer: Yes, that works Investor: Great, I’ll be right on time. Can you make sure you’re also on time? Tenant Buyer: Yes, see you there. ______________________________________________________________________________ Script------------------------
DDD (Doing Deals from Your Desk)
Here is the script we use with tenant buyers for the DDD method after they have driven by the property. If they have already received the marketing material in the mail, you may not have to go through this. You want to keep this initial conversation as short as possible. These are prospects that have already listened to my 24-hour recorded message or have been to my website, which I think is very important. If they drive by and love the property, then have them email or fax you an application along with a $29 application fee. Investor: Hi, this is ______. You had called me about the rent to own home? Tenant Buyer: Yeah, what is the rent to own home all about? Investor: Is it okay if I ask you some questions first? Tenant Buyer: Sure, go ahead. Investor: Why don’t you just go ahead and buy a home? Tenant Buyer: Well, our credit is kind of bumpy because my husband had some medical bills he didn’t pay a few years back. But we really want to get into a home right now. Investor: Okay, well there are three main components to the rent to own. Here we go. First every single month 50% of your rent will be credited towards the purchase of your new home. There is a catch to this though. Your rent has to be received by the first of the month. If it is received on the second, you lose the entire rent credit for that month. Sir, can you handle paying your rent on the first? Tenant Buyer: Yeah, no problem Investor: Next, before you move in, you can inspect the property to make sure everything works correctly and is up to your standards. Since this is going to be your property, you are going to be responsible for the day-to-day maintenance and re- pairs on the property. Is this something that you are comfortable with? Tenant Buyer: Sure, my husband and I are really handy! Investor: Finally, there is some kind of up front payment that is required to move into the property. You need to put down something to be able to commit to your future home. This payment is 100% ap- plied towards the purchase of the home if and when you buy, but non-refundable if you don’t. How much do you guys have to work with? Tenant Buyer: I have $8,000 to work with. Investor: Hmmm…that is a little less then we wanted for the property. I really need $10,000 for you to move in, on top of the first month’s rent. What if you could put $8,000 down today and take care of the rest in monthly payments. How would that work? Tenant Buyer: That would be great! Investor: Great! I’ll email you the application. The application fee is $29. Fill it out and fax or email back. Once we get that, I will give you the key box code to get in. Tenant Buyer: Thanks. Will do. Ad Posting Schedule Excel Sheet ( I use this to keep track of which websites that I am posting Ads to..
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