Best sell real estate investing author Larry Goins & Co-Host Kandas, will show you the many ways real estate creates the I.D.E.A.L. investment. Whether you want to Flip houses or become a passive investor making double-digit returns while others do all the work. You will learn how here on BRAG Radio.
Today's show is the first of a 2-part series on how to be a good negotiator. Larry and Kandas talked about the things you should ask sellers when negotiating deals. They also dissected a deal which they learned a lot of lessons from.
What they've been up to
Share Sponsor winner
Deal of the week: Fix and flip property
Things you need to ask the seller on the phone:
- Whose name is the house in?
- Why are you selling?
- Who lives in the house or is it vacant?
- How long has the property been vacant?
- When was the last time you went inside?
- How much are you asking and how did you come up with these number?
- Do you owe anything on the house?
- If they have a mortgage, ask how far behind they are.
- What will you do with the money when you sell?
- What will you do if you can't sell it?
- What's the condition of the house?
- Ask about any repairs or updates that has been made.
- How long have they been trying to sell it?
"Don't ever promise a buyer that you're going to have the house cleaned out before you sell it to him."
"It costs a lot of money to have a house cleaned out."
"If you're going to be a really good investor, you need to learn how to be a good negotiator."
Larry: What's happening? How are you doing? Welcome to Brag radio. We're really excited you're here. Thank you so much for being on. We appreciate you guys watching. So, a couple of housekeeping things. Right, Kandas?
Kandas: Right. So first, let's say that we hope all of our students, friends, family, everything on the coast that have decided to stay and ride out the storm are going to be super safe. We pray for your safety. Already this morning we've been praying for our week and we'll continue to do so as well. But just so you know, you're in our thoughts and prayers. We are wishing for the best for you.
Larry: Absolutely. For us, we're not even going to be in town for the storm, right Kandas?
Kandas: Unfortunately. Which we're having a hard time with.
Larry: I know. We won't even be with our families because we're going to Dallas, Texas. We're leaving as soon as this is over. We're like be lining to the airport. We have a 4 o'clock flight today so we're going to be this close to getting on the plane and we're going to go to Dallas. We've got a lot of people registered for our 3-day event.
Kandas: Right. If you guys, obviously, if you're watching this and you're not in Dallas, we've got another one of these type of events coming to the Charlotte area in October. It's the 25th, 26th, and 27th. You can go to Larry Goins' Live and register for that.
Larry: Exactly. I'll teach all three days of the event. So, the next thing is, get your free investors kit, right Kandas?
Kandas: That's right. Yes.
Larry: That's it? Awesome. Ok, cool. Next is, if you guys want to partner with us. We have a partner program. It's where we work with you one on one, and we help you get your first or next three deals. Our goal is to get you three deals in 90 days. It's not cheap. I can't do it for everybody, but if you would like to to apply to do that, you can just go to LarryGoins.com/apply, right?
Alright. So next is, what I want you guys to do is share right now for a chance to win a HUD Jumpstart course. Now, I wrote a book on HUD called HUD Homes Half Off and we have a home-study course. It's a $297 value. That's what we sell it for, and you can get it absolutely free if you share this video right now. Share it and we're going to pick a winner next week that will win the HUD Jumpstart Course. It'll show you how to dominate HUD in your very own market just like we do. You can buy HUD Houses for pennies on the dollar, right? You don't want to pay any more than 30%, 40%, 50% for a HUD House. Even right now in today’s market. Okay? So, share this video right now, right? For a chance to win that course.
Let’s find out who our share sponsor winner is from last week. Last week our share sponsor winner is Susan Russell. Yey!
Kandas: Congratulations, Susan.
Larry: We do. See, I’ve tried to do this before but you didn’t like it.
Kandas: ...like a celebration sound,
Larry: You didn’t like it before.
Kandas: We need an air horn.
Larry: I know.
Kandas: Cho-cho! Now, that did not sound right. Anyway.
Larry: I know, right? So congratulations to Susan Russell. Be sure and share the video, guys.
Kandas: Susan, if you’ll send in an email to firstname.lastname@example.org, let him know that you are the share sponsor for this week, you can get the access too before the HUD jumpstart course.
Larry: I’m so glad you said that. I didn’t even think about it.
Kandas: Alright. That’s what I’m here for.
Larry: I had it written down but did not… I had it written down.
Kandas: The details.
Larry: Big picture. Detail. Visionary. Integrator. Read the book. Traction and Rocket Fuel. It will show you how to run your business with the visionary and with the integrator.
Alright, so next we want to talk about the deal of the week. We had multiple deals every single week because we’re buying and selling and buying and selling a lot of properties. The deal that I want to talk to you guys about this week is a really, really cool fix and flip property. Right? I was actually going to buy three houses from this guy, but the first two we went to look at were literally dogs with fleas. They were falling down, holes in the roof, all that good stuff. Okay? So we could not do anything with those houses but he had another house over in Kannapolis, and we are going to buy that house. We’re paying a negotiated deal of $115,000 on this house. It’s a nice 3-bedroom 2-bath house, ranch-style house we’ll own. Probably about a half acre or maybe ¾ of an acre lot. Nice, wooded lot. Really nice area. The most recent sale sold for $203,000, Kandas. The only difference was it had a garage. It had a garage.
Kandas: This lead came from the direct mail.
Larry: This lead came from our direct mail. We mail out postcards. I don’t have any laying around here on my messy desk, but this lead did come from postcards. When they call in, we answered the phone. She and I answered the phone or it goes to our PATLive account. They answer the phone. This is a really cool, light fix and flip. We’re just going to wholesale it. We bought it for 115. We’re going to wholesale it for 125. It needs paint, carpet, and clean up, and that’s really it. That’s really all it needs. In fact there’s a lot of cool stuff that was left in the storage building, right?
Kandas: We’re finding these properties. Tenants that have moved out have left stuff or homeowners that have inherited the properties, their stuff left which is creating a unique opportunity for us.
Larry: You’re exactly right. I understand where you’re going now. You would think it was a good thing, right?
Kandas: You even think it was a good thing. Now, on one hand it is a good thing because there’s opportunity to pick through some of the stuff and get some really cool items, really cool things. Also we’re able to donate a lot of the stuff to organizations that needs stuff like this. Like one of the houses we just cleaned out had a bunch of plates and silverwares and stuff like that. Pam was able to donate that to an organization that needs stuff like that. It’s kind of two-fold in being able to help, we get some stuff as well. But we are not accustomed anymore since our last rehab was five years ago or something like that.
Larry: Yeah. The last one. The one we lost money on.
Kandas: Right. Liberty ...to do on anything, anything on these properties. So, what we’re having to go into a process of clean out, who’s going to contact the dumpster people, who’s going to set up the cruise to go out, who’s going to contact the city if we have to have like one of our houses has to have a permit to be able to put the dumpster in the street because the yard is not big enough. It creates a little bit more chaos.
Larry: Havoc. It creates havoc.
Kandas: A little bit more chaos. On the front-end with having to do that that we weren’t really prepared for.
Larry: But here’s what we’ve learned, don’t ever promise a buyer that you’re going to have the house cleaned out before you sell it to them, right? Don’t do that anymore. We stopped doing that. So this house that’s the deal of the week, that we paid 115 for and we’re selling it for 125. We’re just going to make a quick tail on it and move on, let somebody else make 20 or 30 or 40 or whatever. There’s only a few things in the house, right? I think there was bed and something else.
Kandas: Just a little bit.
Larry: But outside, there’s like a big cooler. There’s a washer and a dryer in the storage building. There are two storage buildings. There’s a washer, dryer. There’s a chipper like bush or wood chipper that looks brand new.
Kandas: A random racing tire.
Larry: Yeah. Some kind of a racing tire from NASCAR and a bunch of ceramic tile. There’s a huge stack of wood, lumber outside that’s covered up with a tarp. There’s a lot of backdoor furniture there.
Kandas: The ultimate thing here is we’re not promising anybody it’s going to be cleaned out.
Larry: Right. Now, whoever buys it? Whoever buys it, they can take the stuff and keep it or sell it or donate it and get to ride off whatever they want to. We just don’t want to be bothered with it, right? We even talked about this. We thought about, we know, why don’t you go over here. You want this, and I want this. But at the end of the day....
Kandas: Ain’t nobody got time for that.
Larry: Ain’t nobody got time for that. That’s hilarious.
Kandas: That is exactly what’s happened. The calls were like, okay when can I go out to this house to see if I can get that chipper. You know. I’d fuel my car or I’m going to have to drive a trailer, but then with a trailer, I might go ahead and take off this other stuff. I mean, there’s so many ifs and things that can be done when you start looking into that. As long as we don’t promise and as long as you guys don’t promise that you’ll have a house completely cleaned out before your buyer takes it, then you shouldn’t have a problem.
Kandas: Learn from us.
Larry: Right. Learn from our mistakes.
Kandas: We make them. It happens. It’s a cost to doing business. You know, you just do it and you move on but if you guys can learn some stuff from us or you don’t have to go through the same things then in the kind of what this is about.
Larry: That’s exactly right. That’s exactly right. Just to give you an idea of the last house that bought, that we promised we would move everything out, it had a piano in it. At first, Kandas was like, I got to have the piano. I’ve got to have it. I’ll put it in my house. She calls her husband, we’re can we put this piano? Let’s put it over here. We can move this, and then somebody else want it, and then somebody else. We ended up giving it away, right? There was all kinds of old China and silver. I mean silver in the silverware drawer, silver, real silver flatware that’s wrapped up in plastic. Wrapped up in plastic, right? Looked like I was rolling.
Kandas: It’s so funny that people can see you now versus when we were on WBT. He still did the same thing. He still made all the hanging and gestures and moved around as much in everything, but he just had it on. You guys can see him then, doing all that stuff.
Larry: There’s like five sofas over there, jewelry.
Kandas: Eight mattresses.
Larry: There’s all kinds of old antique China. The only thing I got was outside. You know how some people have like a rock for a door stop in the old times or whatever.
Kandas: The olden days.
Larry: The olden days. Long ago, these people had a quartz rock. I kid you not. It was about this big, right? It was about a foot and a half long. A huge quartz rock.
Kandas: How big that that fish?
Larry: That big right there.
Larry: So, I took that home to my son, Noel. I thought he would get a kick out of what because it had two, you know how quartz has those?
Kandas: He’s a big rock collector.
Larry: Things going out. It was a quartz rock like that.
Kandas: We’re getting off topic.
Larry: Alright. Anyway, so just be careful when you buy a house. It’s got a lot of stuff in it. If you have time, take the stuff, sell it, have a yard sale.
Kandas: Donate it.
Larry: Let me tell you something. It costs a lot of money to have a house cleaned out. Ask us how we know, right?
Kandas: We have an evidence.
Larry: I mean, some of the stuff is good stuff that people would want but we don’t have time for that, right? We don’t have time for that. So if you want to see this deal or any of the other deals, go to investorsrehab.com.
And now, what you’ve all been waiting for, some negotiating one liners. I am a firm believer. If you’re going to be a really good investor, you need to learn how to be a good negotiator. Right, Kandas?
Larry: So, you’ve got to learn what to say and how to say it. It’s just like talking to a realtor. For example, if you’re talking to a realtor and the realtor says, send over your proof of funds letter. You’ll know you’re not doing a very good job because they don’t think you know what you’re doing if they ask you for a proof of funds letter. If a seller asks you, well how long you’ve been doing this? How many houses have you did? That’s another good sign. So, this week, we’re going to talk about some things that you can do to talk with the seller to negotiate deals. Next week, we’re going to talk about the realtor, okay?
Kandas: Two part.
Larry: Two part. That’s funny. Alright. So, few questions. Now, first of all, a lot of people say, Larry, where did you find that deal? Where did you find that deal? Last standard answer is, when I found it, it wasn’t a deal, right? Remember this guys, if you don’t remember anything else. You don’t find deals. You create them. My standard answer is when I found it, it wasn’t a deal, right? I’m going to share some things that you need to ask every seller that you get on the phone, okay?
Number one, whose name is the house in? That’s very important. What if you get all the way down to the closing and they pull the title work and it’s in somebody else’s name that’s not even anywhere close to your seller and then you contact your seller and the seller says, Oh yeah. I forgot to tell you. You know my brother died. He didn’t have any kids and I just took over the house. What, did your brother have a will or no? Now, you got a problem, right?
Kandas: Ask us how we know.
Larry: Exactly. We have one right now. We ask that questions, we ask those questions, when we have a situation like that and we get it under contract, we have Andrea, our closing person that’s right inside that room. We have her pull title, first thing, right? We want to make sure that if there’s any problem, we got a little bit of time to work out those problems.
The next thing you want to ask your seller is why are you selling? Right? Why are you selling?
Kandas: Now tell them the way that you, because you word that a little differently.
Larry: You’re right. I think.
Kandas: Why don’t you tell them the way that you word it?
Larry: That’s really good, Kandas. You know, I just don’t come out and say why are you selling? Here’s what I say, so tell me Mary, what’s going on in your life that has you looking to sell this property right now? So, I’ll be a little personal with them and I want to know what’s going on in their world, in their life, that has them looking to sell this property right now. They might say something like, and this is all stuff I get. I’m getting older. I don’t want to take care of it. I want to cash out so my kids don’t have to deal with it. I’m tired of dealing with tenants.
Kandas: I inherited it. I don’t really know what to do with it. It’s been vacant. It’s just costing me money with taxes. Why am I paying taxes? I don’t us this property anymore.
Larry: Right. Exactly. Those were all really, really good answered that you hear.
Now the next thing is, who lives in the house or is it vacant? You want to know if it’s vacant. Now, the very next thing if it’s vacant, you got to know how long has it been vacant, okay? How long has the property been vacant because trust me. I know this. If it’s been vacant three or four years, you probably don’t want that house. The roof could caving in. The floors are falling in. The cod zoo is growing up over the house. I mean I literally went to a house the other day up in Hickory. It had concrete brick steps leading up to the door. There’s a tree this bigger, growing up through the steps. I had no idea how it got there.
Kandas: Where are the concrete steps?
Larry: I have no idea how it got there. I mean, how do they even take route and something. I don’t know. This tree was about 15 or 20 feet tall. I couldn’t believe it.
Kandas: They selling it now. Seller had no idea.
Larry: Seller had no idea. I took a bunch of pictures and I said, look, I can’t buy this house. In fact that was a house, the same owner of the house in Kannapolis we just told you about a few minutes ago for the deal of the week
Kandas: Sometimes, I would say seven to eight times out of ten, you’re not going to want one. It’s been vacant or vacant that long, but there a few like one of the other properties that we just got that has been vacant, but the guys kept the power on. He’s kept ther on. He goes over and cuts the grass. So, that type of situation. You just got to ask more questions. Vacant, ask him who leaves in it if it’s vacant right now. It’s very important, but if somebody is maintaining the property even though it’s vacant and keeping things circulating within it, then you might be alright.
Larry: That’s exactly right. In fact, that’s one of the things we ask them. If it’s vacant, when was the last time you saw it? When’s the last time you went inside, right? That’s another very, very good question to ask as well.
So I hope this is good stuff, guys. Give us a shoutout if you’re liking this stuff. It’s good.
Kandas: He needs constant validation, people. You all know this. I don’t give it to him.
Larry: Awesome. How do you pull the title? You have an attorney or title company.
Kandas: Depending on your state.
Larry: Yeah, Dave just said that. How do you pull a title? Some states are title states and some states are attorney. Like Florida, they have title companies, right? Some are attorneys like North and South Carolina, uses attorneys, okay? So great question, Dave. Thanks a lot.
So next is, what is the value and how did you come up with this number, right? Or how much are you asking and how did you come up with this number. Now, 9/10, they’re going to say I based it on tax value. Here’s my standard response, well I wish tax value met something when you went to sell your property but it really just has to do with being able to put a tax in you based on that. Of course, they want that number to be higher because you have to pay more taxes.
So, next question, how much do you owe and with who or do you owe anything on the house. You want to find out if it’s free and clear or do you owe any money. Here’s another thing, if they have a mortgage, always ask them, how far behind are you?
Kandas: This is a double-edge sword right here.
Larry: It is a double-edge sword. She knows. She’s heard me do it. She’s heard me get cussed out before, right? But that’s another thing. You’ve got to know how to handle it if somebody gives you a hard time. Like, I asked that question one time, how far behind are you? I had a lady say, how dare you ask me that. I’ve never been late on a payment before in my life. I can’t believe you asked me that question. I say, you know Ma’am. I’m really, really sorry but unfortunately, I worked with a lot of people who had found themselves in the situation where they can’t make their mortgage payment and I see it every day. If I had offended you, I’m really sorry. Will you forgive me? You got to smile with this one.
Kandas: You were sorry. That’s what he says, and just that charismatic as well. I’m sure that smile in his face.
Larry: So the next thing is, what will you do with them money when you sell. Sometimes, they’re going to say, it’s none of your blankety-blank business, right? But you’ve got to build a little rapport with them, right? What would you do with the money? If they say just stick it in the bank, the very next thing I’m going to say is, what are the banks paying now? What are the banks paying now? I think they’re paying about 1%.
Kandas: Or less.
Larry: Or less. You know, if you’re just going to stick it in the bank and you’re going to get 1% or less, I’m going to have to go to the bank and borrow the money when I buy this property. Now, whether I am or not is irrelevant, right? I’m just going to have to go the bank and borrow the money. You know, the banks are charging about 5% interest now, right? I’ll just assume I’ll pay you as I would with the bank, would you be interested in financing your property and earning 5% return on your money instead of 1% at the bank, because you put your money in the bank. I’m probably just going to borrow it from the bank and they’re going to make 4% on your money, right? So, when you put it to them that way, they understand. If they say, no, then I say something like, Oh no. Are you not comfortable with the security of your property for the loan? That makes them think twice, right? Then they’re going to sell you on. My property is worth that.
Okay, so a few more then we’re going to get out of here. What will you do if you don’t sell or what will you do if you can’t sell it. If they say I’ll just rent it out, that’s another opening for seller financing. We’ve negotiated a multiple seller financing deals just in the last few week, right?
Kandas: Right. We have four now.
Larry: I think we have four or maybe three, but I think four. What is the condition of the house? What about that one? I want to find out all the different stuff, all the different stuff, right? Tell me about any repairs or updates that have been made, right? I want to know about the big stuff, the roof, the HVAC. You know, if I know it’s a two-bedroom, I could look up on Zello while I’m talking to them, and say, now this is a three-bedroom, right? Now it’s a two. Oh, okay. Two-bedrooms are a little bit more difficult to rent and sell in today’s market. It seems like everybody wants a three-bedroom.
Kandas: The same thing with the bathrooms.
Larry: Now, you do have two bathrooms, right? You do have a sunroom, right?
Kandas: Say anything about the carport.
Larry: What about a garage. It has a garage. No it has a carport, oh, just a carport, oh okay. Right? So what we’re really doing is price conditioning the seller, right? That’s all we’re really doing. Then I ask them, you know, how long have been trying to sell it? Have you had many offers? If so, why didn’t you take it? Right? Why didn’t you take it? Sometimes, it’s not the money. Sometimes they’re going to say, well I wouldn’t sell my house to that jerk of a guy that called me even if he was the last person on earth, right? That’s why it’s always good to be really, really nice to people and treat people with respect. After I do that, I’ll say, something like we’ll let’s just pull up here and see what other houses are selling for because regardless of what tax value is or regardless of anything else or what you want or what I’m willing to pay, regardless to that, all we could really do is pay what other people are paying for houses in the area, right? So, I just look up for the houses that are sold in the lower amounts and I’m pulling them up. Right? I’ll say, hmmn here’s one right here sold for $12,000.
Kandas: He even tells people, this is something you can pull up on your own if you want to verify what I’m telling you. He tells them exactly where to go to pull it up and what he’s doing while he’s on the phone.
Larry: It’s just on Zello under sold.
Kandas: It’s not rocket science.
Larry: It’s under sold. Here’s what I say, I’m not looking at anything. You can pull up yourself. In fact, all you’ve got to do is google your Google your address, click on the Zello link, scroll down and look at the maps and boom! There they are. I’m not telling you anything. You can find out on your own.
That’s pretty much exactly what I do when I’m on the phone. Next time what we’re going to do is we’re going to go over questions you should ask a realtor in conversations with a realtor on the next show next week. So, guys, be sure and share this video. Also, if you want to work with me and my team, if you want to partner with us with our partner program, if you would like to apply, it’s not cheap. It’s like coaching or mentoring but we actually partner with you with deals, but our half goes to charity. We work with you on your first three deals to get you up and running and our goal is to get you three deals in 90 days. So be sure and share the video. Thank you, guys. JC is watching. Check him out.
Awesome. Thank you guys very much and we’ll see you next week, some time.
Kandas: Bye guys.
Larry: Some time next week. We got to go to the airport.