Prepare Yourself to Make a Hundred Offers a Week, Every Single Week
We say that with this one caveat…
Understand that less than 5% of the offers you make are going to be accepted.
People ask us all the time, “How do you do 20, 30 plus houses every single month?”
Well, it starts and ends with making enough offers to fill that pipeline. If you are sitting on the sidelines and expecting that some way, somehow you are going to just magically have 20 to 30 great deals fall into your lap without having to work real hard, or without having to go out there and do some things to create those opportunities, well you are sadly mistaken, and we are probably talking to the wrong person here. The reality is that you have to very disciplined and you have to make a conscious effort that you will make a minimum of 100 offers every single week. Now, with that being said, there are certain things that you can do inside of those contracts especially when you are starting out to make that a pretty risk-free type situation.
That always tends to freak people out a little bit because they are thinking, “What happens if I get a hundred offers accepted?”
First, you are not going to get hundred offers accepted. Second, every offer that you make, as we said earlier, is no more than fifty cents on the dollar. We know there are some people that again are going to say, “Well, my market is different.” Well, this is where you need to start. Make offers at fifty cents on the dollar, hundreds of them a week for several weeks, and then if you find that you are getting absolutely nothing accepted, then you might try to reevaluate your market, bump up the price a little bit, figure out exactly what investors are paying and where you fit into that equation. But the point is you definitely have to make offers at a price that allows you to put your own assignment fee in it and ultimately sell it to another investor.
You heard us say make hundreds of offers a week, then you heard us say make hundreds and hundreds of offers a week. That’s literally what you have to do. How in the world does anybody make a hundred offers a week? Well, that’s one of the secrets that we are going to show you how to do.
Do you fill out a hundred contracts? No. Do you have to fill out some contracts? Yes. But, depending on who you are working with and we show you how to do this, we can show you how to make 300 offers in the next two hours.
And again it comes back to relationships, this comes back to your networking. We show you how to work smarter and not harder. And we’ll show you how to get a Realtor to take your thirty cents on the dollar offer and present it to somebody without being embarrassed. Some Realtors will look at your offer and say, “Oh, they are not going to take that,” and balk at even presenting your offer. First, that is NOT your Realtor. That is not the person you want on your team. So, we’ll show you how to train your Realtor to put those offers in. This is very important because you make your money when you buy the property, you don’t make money when you sell it. That’s where you are going to make your profit, going into the deal.
So we have certain standards, certain conditions, certain profit analyses that we run on every property. We’ll show you how to do that inside of our system to show you what to offer for the property, what the comps are for the property, what the comparables are in that particular zip code, what is it going to do to your price? We show you how to do that to justify your offer.
We talked earlier about the spreads and how to increase your margin, and you have to be aware of those numbers, those percentages when you make your offers. When we talk about literally millions and millions of dollars in profit here, please be very clear: we are not talking about $150,000 a year, $200,000 a year. We are talking about millions of dollars in profit here, and we’ll show you how to do that, but it all starts back with the offer and you literally have to make hundreds and hundreds a week. We show you how to streamline that, work with 10-12 people and do it very effectively, very efficiently every single day.
We always get the same two questions from our coaching students when we talk about making offers and you probably have the same two questions in mind, especially if you are a new investor. How do you make hundreds of offers and what happens when an offer is accepted?
We’ll talk about acceptance during Step Number Ten, but you need to write offers with a couple of conditions. One, every offer that you write absolutely has to be assignable. The contract has to be assignable. If someone that you were trying to purchase a home from will not allow the contract to be assignable, then you simply walk away from the deal.
Your contracts also need to have an inspection clause in it. We use a clause that says buying the property is subject to a 14-day right of inspection. The reason why you would do this is simply because that 14 days gives you time to go out and market the property. If in the event, you are unable to sell a property inside of that 14 days, you at least want the option to walk away. This is a big ‘if’, and doesn’t happen very often, but it eliminates risk.
If somebody has accepted your offer of fifty cents on the dollar and they have allowed you to assign it, and they’ve given you a 14-day right of inspection, the reality is that you have got a very good deal unless it’s in a war zone. You have absolutely done everything we’ve told you: Fifty cents on the dollar, in the right areas, with the assignment clause and with the ability to walk away from the deal subject to right of inspection.
The reality is, you are probably not going to walk away from that deal because you have got something that is highly, highly marketable. This is what we come back to and why you have to make hundreds of these offers because all you are trying to do is get 20 or 30 accepted.
Imagine if you will for a minute that you have 20 properties every month that you have secured the rights to contractually purchase them at fifty cents on the dollar. Now, put yourself in this position. If you’ve done your due diligence and created your buyers list, you’ve got properties at half price. There is absolutely a market for that out there, especially if you are in a cash-flow market, there is absolutely a market for that property.
Do you think you can sell a house if you’ve purchased it at fifty cents on the dollar?
The reality is, yes, you can. The ones that you can’t sell are going to be so few and far between they are not even worth discussing.
Now, if you don’t follow what we’re saying here and make offers at sixty to seventy cents on the dollar and get them accepted with all these conditions, all the rules are off. I am not going to tell you that you have something that’s marketable at that point. But I will tell you, if you follow what we are saying here, you will absolutely have a marketable product that you should, and in most cases will, be able to sell in a very timely manner.
Again, the more offers you make, the more experienced you become.
One of the big concerns that our students have is, “If I make all these offers, what do I do about the earnest money?”
Most times people want a show of earnest money with offers. If you have to have $1,000 for every house, you are going to run out of money real fast. We’ll show you how to work through that, and it’s a very simple process. But, start making the offers and becoming relaxed in that, and not worrying about what you are going to do if you have an offer accepted. That’s a great thing – having your offer accepted. If you’ve followed our system, you are going to make a lot of money on that property.