One of the things you need to get good at in real estate investing is sales. And when I say sales, I am not talking about selling your property. I am talking about selling people on what they can do for you or what you can do for them.
For example, in the case of a motivated seller, what you are trying to do is you are trying to sell these people on selling you their property for the price that you need it to be. And you have to do this in such a way that they understand your position, right? So, it is not just, “Hey, I need to buy this property. I need to buy it for this price. If you don’t want it fine, I’ll just move on”.
I mean, certainly you could do that if you are trying to do a numbers game, but ideally what you want to do is you want to position it in such a way that I’m here to help you. “I understand your situation, but I’m a businessperson. Here’s what I need the house to be because here’s what the renovations are going to be” in the case of a fix and flip. And also in the case of wholesaling where you are looking at making changes or making modifications or improving the house, which you should be doing with all motivated sellers.
You look at the house and you say, okay, this is what the fair market value is. You do the math in your head or you do the math for yourself and the most I can offer for this property is, let’s say, $260,000. Because that is where I needed the price to be. Because by the time I put it in my renovation of $100,000 I need to make a profit. And I may have to give my wholesalers some money.
So, you put in all your fees and then you understand what the after-repair value is. The after-repair value is what you are going to be able to sell it for and that’s what you present your motivated seller with. And then you try to sell them on selling you that house at that price.
The other person you have tried to sell a lot is your joint venture partners.
What you want to do is you want to put together a pitch deck and you want to present to them the opportunity. You can do this a couple of ways. You can present to them a sample opportunity where you put together numbers on a typical deal that you’ll be doing. And these are the types of returns they’ll be getting.
Or you may have a specific deal and you send it over to them saying, “here, I’m buying this property on this street. I’m going to do these renovations. Here’s the risk.”
You always make sure that your investors understand the risk.
A lot of investors go into real estate thinking this is the profit they are going to make in a real estate deal. Great. But you have to make sure that they understand that we may run into problems doing these renovations or the renovations may take longer, or the sale of the house may take longer. So, there’s always risks involved whenever you’re doing a real estate transaction.
The point here is that you want to sell the investor on investing with you right now.
Then ultimately what you are going to do at the end of the transaction, or if you still have the property, you will want to sell that property. I don’t really consider that selling in real estate because I never sell my own properties. I always get a real estate agent and I let them do the selling because …
selling in real estate is not really sales
It is more of a marketing process, right? And the house sells itself. Certainly, as a realtor, you are not trying to convince people to buy that particular house. All that real estate sales are, or at least real estate transactions are, are showing the house, making sure the house is marketed property, and making sure the house presents itself really well. I guess those are forms of marketing versus selling.
So, it is important to have an autoresponder to do your email marketing campaign.
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