The Big Questions Every Real Estate Investor Should Be Asking Sellers

Below is a list of power questions to ask every seller when you’re qualifying each lead and negotiating with them. By asking the right questions, you will be able to gather all of the necessary information to make an educated offer.  These questions will uncover their true motivation, give you all the info you need to make a creative offer, and will put them on the spot to give you a better deal.The Big Questions Every Real Estate Investor Should Be Asking Sellers

What is your situation?

This question gets at the heart of a prospect’s motivation. Often times, the person will just open up and tell you exactly why they are selling. This is very valuable information to use in your negotiations. Once you know a seller’s true motivation, you will know whether or not they are in a situation that you can help solve.

If the seller asks you what you mean, just rephrase it and say, “Well, why exactly are you selling? Are you moving out of the area or . . .” At that point, I usually just shut up and let them fill the void of silence with their reason for selling.

Are you just trying to get out from under the debt on the property and sell for what you owe?

By asking this question, you get right to the point. Even if they have a ton of equity, doesn’t matter . . . just ask anyway. You never know what someone will say until you ask. This also preps them mentally to know that we are the type of company that helps people that “NEED” to sell. If they are looking to get too much out of the property, we are on to the next lead.

If someone owns their home free and clear, this question wouldn’t make sense to ask. Use it in every other situation.

Would you be willing to receive payments for your equity over time?

Paying a seller for their equity over time is a great way to accelerate your wealth in real estate. This gets at the heart of being a creative real estate investor. Any time that we can get a seller to take back financing, we go for it. That’s less money we have to bring to closing, and you set up the terms. Usually we just say, how about $x per month until the full balance has been paid. By the way, that’s a 0% loan. Every payment goes straight towards principal. That’s how you build massive wealth quickly in this game.

Do not ever use the words “seller financing” or “owner financing.” Use this simple question that says the same thing and says it in a way that can be easily understood.

Is there a certain time frame that needs to be met with the sale of the property?

Maybe the seller is moving by a certain date whether the house sells or not. Maybe the property is going to foreclosure soon. Whatever reason someone needs to sell fast, you want to know why and what time frame must be met. When you go to make your offer, you craft it so that it meets the necessary time frame needed.

The ultimate big question . . . Is that the best you can do?

I love this question more than any other. It puts people to the test. You’ve been negotiating with them and you get down to the lowest price that the seller says they would take for the property. Then, you say, “Is that the best you can do?” Your nonverbal communication is going to say a lot here so look them in the eyes and say it in a very soft tone of concern. Almost like if they don’t come down on the price more, there’s nothing you can do.

Typically, even after a seller has given their final price, this question will get them down lower. Use it and prepare to be amazed.

Warning: Your Real Estate Investing Team Will Make or Break You

Real Estate Investing TeamWhether you like it or not, you should view real estate investing as a team sport. Going it alone is not an option. It’s not like you are going to be the Realtor, mortgage broker, attorney, accountant, contractor and everything else. You will be relying on other people almost every day. With that said, building a strong team is of utmost importance to any real estate investing business.

Building Your Real Estate Investing Team

Realtor

A Realtor is one of the first team members you will want on board. To evaluate any deal, you have to know what a property is worth. Realtors are a great source to help determine a property’s value. When we first got started, we found a Realtor that agreed to pull comps for us if we would list our properties with him once we eventually sold them. A win win relationship.

Realtors are a dime a dozen so be picky. If you can find a Realtor that invests, that’s best. Anywhere in the business that we can delegate, we usually do. When we go to sell a property, we want a professional to handle it for us so we hire a Realtor.

Mortgage Broker

Often times, when you find a good Realtor, you will also find a good mortgage broker. Every Realtor typically has a primary mortgage broker that they use and vice versa.

If you can find a mortgage broker that does what he or she says, you’ve struck gold! I have found that way too often, when I have approached a new mortgage broker, they tell me that they can do a loan before I even open my mouth. That’s not who you want on board.

We have two primary mortgage brokers on our team. One helps more with refinances and the other to get our lease option tenants qualified to buy from us.

As a side note, on the sell side of the business, we always suggest our mortgage broker to any buyers. They can choose whoever they want, but it’s nice when you know the person doing their loan. Then, you actually know where things are at during the loan process.

Attorney or Title Company

Depending on what state you are in, you will either close on properties through an attorney or title company. In South Carolina, where I’m from, attorneys are used to close real estate transactions.

As a creative real estate investor, you may have to search a little bit to find the right one. You want to find someone that is willing to learn. Most attorneys and title companys are used to doing things the traditional way. There’s nothing wrong with that, but you need someone that is willing to look at nontraditional ways of buying and selling real estate.

Asking for a good referral at your local REIA (real estate investor’s association) is a good place to start looking.

Cash Buyer

This is a valuable asset to the team.  Once you find a serious cash investor or investors, you have the ability to turn a contract into cash quickly. This can provide useful in many instances.

Whether your cash buyer uses their own cash or someone elses, doesn’t matter. You just want someone who is a serious investor and has the resources and experience to close a deal fast with cash. This will be the person you will wholesale or assign properties.

Look for cash buyers once again at your local REIA, classified ads in the real estate wanted section of your newspaper, or just call any investor that markets to buy properties in your area and find out what constitutes a good deal for them.

Contractor

This can be one of the more frustrating team members to acquire. We have gone through many a contractor over the years. Many of the ones that we have worked with failed in one of the three important areas: price, quality, and reliability. If the contractor did great work at a great price, we could never rely on them. If they were reliable and did quality work, their price was through the roof. And if they were reliable and priced well, their work sucked. You get the point.

Eventually, you are bound to find a good one though so keep at it until you do. We have a couple on our team now that I have 100% faith and trust. That’s exactly what you want.

Check out How to Find Good Contractors and The Contractor Success Triangle for more info.

Other Key Team Members

  • Appraiser
  • Home Inspector
  • Hard Money Lender
  • Private Investor
  • Bird Dog
  • Property Manager
  • Accountant
  • Credit Partners
  • Insurance Agent

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Recruiting Private Money eBook and Power Point Presentation

Did you download your FREE eBook and power point presentation on “How to Recruit Private Money Millions” yet? Click here to get your copy now!

What Are Real Estate Market Indicators and How Do You Use Them?

Here’s an article from Trevor’s real estate investing blog, theREIbrain: When professional real estate investors make a move, they do it based on how they predict the market is going. True investors don’t just make an investment or enter a new area on a hunch… they do it because they see strong indicators for future [...] Read more »

Two Vital Skills You Must Master in Your Real Estate Investing Business

To be successful at real estate investing, there are two skills that you must develop: Negotiating and Marketing. And to truly develop and master these skills, it’s going to take study, practice, application, testing, retesting, and knowing the difference between what’s working and what’s not. It should be your number one goal to become both [...] Read more »

I Won’t Make That $25,000 Mistake Twice : Real Estate Investment Tips

No matter how good you come out on a property, leaving $25,000 on the table leaves a slight sting. And that’s exactly what happened when our first lease option tenant buyer cashed us out. It all came down to a few sentences in our lease option agreement in the purchase price section. Ever since then, [...] Read more »