You can see how you’re conditioning them to follow your instructions, follow your lead and follow your guidance.
You’re controlling the scheduling. They’re controlling which properties they select. The bottom line is you’re the driver of the bus, not them.
Once you view the properties, you should have a list of four or more properties that you will fill out the MAO (maximum allowable offer) and Cost Sheets for. This is a critical step. On flips, you’re going to fill out the MAO sheet. Essentially you take the market value of the house relative to the neighborhood. Let’s just say it’s $200,000. Knock off 30% for profit and overhead. That takes you to $140,000.
Then you knock off the cost of rehab from the $140,000. Let’s say it’s a $30,000 rehab job. What that means is now $110,000 is the most you can offer on that property. Would you start off offering $110,000? Most likely not.
In an emerging economy, I probably would. If prices are on the run up, I would be a little more aggressive. If prices are falling, then first and foremost be flipping. If your client is a gutsy person, you want to go down a little more.
That’s how that works. That’s the MAO, and we’ll talk a little more soon. In any case, tell your clients to fill out the MAO and have it back to you that evening. Then you’ll go over it with them.
Here’s why. What you’re trying to do with them at this point, between steps nine and ten is to categorize final properties. It could be the 1-4 most likely to profit from or 1-4 least likely to profit from. You create the expectation that an offer is going to be made. Because guess what, an offer is going to be made.
You wouldn’t be out with these guys if they weren’t ready, if they weren’t prequalified financially, if they didn’t have the money. They’re hungry, they’ve done a good job analyzing properties online, analyzing them in person. They want to make offers, and you’re the person to help them does it. What you do is get rid of the properties that didn’t make the top cut. Keep the top 1-4 and discard the rest. They’re just going to take up space. Get rid of them. Your client is not going to buy them.
Let’s say your client comes up with two or three properties but is only going to buy one. Here’s an opportunity for you to make more money. This client is going to buy one of them. You can take the other one or two and tell the client, “I want your understanding that if you don’t buy this property, I’m going to recommend it to another Investor.”
All the work has already been done. You can easily make someone else happy by saying, “I went out with an investor, found three great deals, but we’re only buying one. Here’s one of the other ones. Want to take a look? ”This is an example of leveraging your time (based on work you’re already doing) to make more money without more work.
Here’s another approach that works well:
Before you leave the scene of your property search, throw down your tailgate or use the hood of your car or stop at a local coffee shop. Lay out the 5, 6 or 7 properties you saw. Go through them and say, “After our initial review and our initial notes, which ones do we determine are the ones that we want to go after? Let’s get rid of the rest. That’s a powerful psychological tool that keeps them engaged. The expectation is we’re going to make an offer after we do our analysis, our number-crunching. That’s why you have such a high-percentage shot of making offers and getting offers accepted and getting paid.
That is the nut in the shell right there, if you follow this procedure. You now know how I was able to make so much money and do so many transactions. Literally, it was not unusual for me to do 50 or 60 transactions per year. One year I did 110 transactions. With no assistance. No admin help. I did it myself. All of this. And you can do it, too. I didn’t work Sundays and I didn’t work every night. I still had my free time.
In any case, you’ll step through this process, and determine which property (or properties) the client is going to make an offer on. Your commitment is to write those offers up and have them sitting in the client’s email inbox first thing the next morning. You’re going to write up the offer that same night you visited the properties with your client. The client is going to receive the offer in the morning, sign it, and send it back to you so you can present the offer to the seller.
The client also needs to give you a photocopy of the check. You should already have proof of funds. That’s how the deal is done. That’s how you make money working with Investors. Hopefully, your jaw is dropping and your eyeballs are popping open. You can see how this approach is so much better than what other Investors are trying to do to you.
Their approach is horrible. You spend all the time, energy and money and they sit back and get to pick and choose. That’s crazy. When you and your Investors use my approach, you’ll also both make more money. You and they will also spend less time – because this is the high-percentage shot routine, not the shotgun routine. That’s the big difference.
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